Under-construction vs ready-to-move homes from a builder

1.5.1 What is the difference between an under-construction and a ready-to-move flat?

An under-construction flat is a flat that the builder sells before the building is complete. You book it from the approved plan, the brochure and the site, and you pay in stages while work goes on. A ready-to-move flat is a flat that is already built, so you can inspect the exact home before you pay. In law, the line that matters most is the completion certificate. The local authority issues it when the building is complete. Section 11(4)(b) of the RERA Act makes the builder get the completion certificate or the occupancy certificate, or both, as applicable. The builder must also make them available to buyers. Schedule II, paragraph 5(b) of the CGST Act uses the same line for GST. So “ready” in an advertisement is a sales word. Ask for the certificates before you treat a flat as ready. Both types of flat come from the builder in this chapter. The chapter does not cover resale flats.

Point	Under-construction flat	Ready-to-move flat
What you inspect	The site, the approved plan and a sample flat	The exact flat you will own
Main risk	Delay, changes to the plan, builder money trouble	Defects, missing certificates, pending work
GST	Payable on the price (see the GST section)	Usually not payable if the entire price comes after the completion certificate or first occupation
Payment	In stages, as per the agreement for sale	Mostly at registration of the sale deed
Move date	The date in the agreement, which can move	After registration and handover
Where to check facts	The K-RERA project page and quarterly updates	The OC, CC, approved plan and the flat itself

1.5.2 What protection does RERA give an under-construction buyer?

The RERA Act gives an under-construction buyer five main protections. First, Section 13(1) limits an advance or application fee to 10 percent of the cost of the flat. A larger payment needs a written, registered agreement for sale. Second, Section 13(2) says the agreement must state the payment dates, the possession date and the interest rates for default by either side. Third, Section 4(2)(l)(D) says the builder must deposit 70 percent of the money from buyers into a separate account in a scheduled bank. The builder can use it only for the land and construction cost of the project. Fourth, Section 14(2) says the builder cannot change the plan of your flat without your consent, except minor changes. Changes to the building or the common areas need the written consent of at least two-thirds of the buyers. Fifth, Section 18(1) applies if the builder does not hand over the flat by the date in the agreement.

Under Section 18(1), you have two choices. You can leave the project and get back the money you paid, with interest and compensation. Or you can stay and get interest for every month of delay until possession. Section 18 says the rate is “prescribed”, which means set by the Karnataka RERA Rules, 2017. Chapter 2.2 explains the rate. Section 11(4)(h) also says that after the agreement for sale, the builder cannot mortgage your flat, and any such mortgage does not affect your rights.

These protections apply to projects that register with K-RERA. Section 3(1) makes registration necessary for a project in a planning area. Section 3(2) exempts a project with 500 square metres of land or less, or 8 flats or fewer inclusive of all phases. Each phase registers separately. Search the registration number yourself on rera.karnataka.gov.in before you pay anything.

1.5.3 What should you check before you book an under-construction flat?

Check the K-RERA project page before you book an under-construction flat, because the page shows the builder’s own filings and the completion date. Under Section 4(2)(l)(C) of the RERA Act, the builder declares the time period in which it will complete the project or the phase. Open the Project Details tab and read the Registration/Extensions table. If the completion date has moved, read the order for each extension. Delays are common in Bangalore. Sachi analysed K-RERA filings in a snapshot of 29 August 2026. Of 3,165 Bengaluru Urban residential registrations, 1,196 (37.8 percent) showed at least one completion-date extension. Many of those projects are now complete, so the number describes history, not current risk. Next, read the last two quarterly updates. Compare the work percent with the time left to the completion date. Then visit the site and compare what you see with the filings. Last, have a lawyer read the title documents and the agreement for sale.

Use this order:

1. Find the project on the K-RERA Project Status search with the registration number from the brochure.
2. Check that your tower and phase are inside that registration.
3. Read the Registration/Extensions table and every extension order.
4. Read the last two quarterly updates and the Complaints tab.
5. Match the bank account in the demand letter with the account on the K-RERA page.
6. Compare the proforma agreement on K-RERA with your draft agreement.

Chapter 2.2 explains each tab of the K-RERA page in detail.

1.5.4 What should you check before you buy a ready-to-move flat?

Check the certificates and the flat itself before you buy a ready-to-move flat. First, ask for the occupancy certificate and the completion certificate. Section 11(4)(b) of the RERA Act makes the builder responsible to get them, as applicable under local laws, and to make them available to buyers. If the builder cannot show them, the flat is not legally ready, whatever the advertisement says. Second, inspect the exact flat, not a sample flat. Test the doors, windows, taps, drains, switches and wall finish. Check the light, the air flow and the noise at two different times of day. Third, compare the flat with the approved plan: the carpet area, the room layout and the position of the flat on the floor. Fourth, ask for a written list of pending work in the common areas, such as the clubhouse, lifts or landscaping. Last, a lawyer must check the title, the encumbrance certificate and the draft sale deed before you register it.

The RERA Act also sets dates after the occupancy certificate. Section 19(10) says you must take physical possession within two months of the occupancy certificate for your flat. Section 17(1) says the builder must execute a registered conveyance deed in your favour. Where no local law sets the period, the proviso to Section 17(1) sets three months from the occupancy certificate.

A ready-to-move flat still carries the builder’s defect duty. Section 14(3) covers a structural defect or a defect in workmanship, quality or services. If you report it within five years from the date of handover, the builder must fix it without charge within 30 days. If the builder does not fix it in time, you are entitled to compensation under the Act. Write down the handover date, because the five years start from that date.

1.5.5 How does GST differ between under-construction and ready-to-move flats?

Schedule II, paragraph 5(b) of the CGST Act treats the construction of a building for sale as a supply of services, which means GST applies. It excludes cases “where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority”. It also excludes cases where the entire consideration is received “after its first occupation, whichever is earlier.” Schedule III, paragraph 5 then lists the sale of a building, subject to that clause, as neither a supply of goods nor services. So a ready-to-move flat usually carries no GST if you pay the entire price after the completion certificate or first occupation. If you paid a booking amount or any instalment before the completion certificate or first occupation, whichever is earlier, GST can apply to the flat. For an under-construction flat, the 2019 GST real estate FAQ gives two effective rates without input tax credit. Both rates apply after a deduction for the value of land. They apply from 1 April 2019.

Flat type in the GST FAQ	Effective GST rate
Affordable residential apartment	1 percent of the total consideration
Other residential apartment	5 percent of the total consideration

In a metropolitan city, the FAQ defines an affordable flat by two limits. The carpet area is up to 60 square metres, and the gross amount is up to ₹45 lakh. It lists Bengaluru as a metropolitan city. The definition applies to a project that started on or after 1 April 2019. It also applies to an ongoing project where the builder opted for the new 1 percent rate. The FAQ says it has no force of law. The binding text is Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 3/2019. Sachi did not check the notification text for this chapter. For an ongoing project, the FAQ also let the builder keep the older rates of 8 or 12 percent with input tax credit. Sachi checked the 2019 FAQ and the CGST Act text updated to 30 September 2020, not later rate notifications. Ask the builder to show GST as a separate line on the cost sheet, and confirm the current rate with a tax adviser.

GST is one line of the cost. Stamp duty and registration fees on the sale deed, parking, maintenance deposits and utility charges also apply. Sachi did not check the current Karnataka stamp duty rates for this chapter. Check them on the Kaveri portal of the Department of Stamps and Registration before you plan your budget. Chapter 1.7 explains each line of a cost sheet.

1.5.6 Which option fits your money and your move date?

Start with the date you must move and the money you have each month. A ready-to-move flat fits a buyer who must move soon, because you can register and move after the documents check out. You usually pay most of the price at once, so you need the full down payment and loan approval at the same time. An under-construction flat spreads payments over the construction stages in the agreement. That can suit a buyer who is still saving. But if you live in a rented home, you can pay rent and a home loan instalment at the same time until possession. If the builder delays, that overlap lasts longer, and Section 18 interest may not cover your full rent. The under-construction price can be lower than a similar ready flat, but compare the total cost with GST, not the base price. Do not stretch your budget on the hope that the price will rise before possession.

Use the table to match the option to your situation.

Your situation	Option that usually fits	What to check first
You must move within a few months	Ready-to-move	OC, CC and the flat itself
You can wait and want a lower entry price	Under-construction	Completion date, extensions, quarterly updates
You pay rent now and have a tight monthly budget	Ready-to-move, or under-construction with a buffer for delay	Rent plus loan instalment for the delay period
You want to choose the floor or the layout	Under-construction	Approved plan and Section 14(2) consent terms

Sachi reads K-RERA filings for Bangalore projects every quarter. If you want the extension history and the latest construction progress for a project in one place, Ask Sachi.