Every Chennai buyer eventually faces this choice. An under-construction flat is usually cheaper per sq ft and comes with an easy payment plan. A ready-to-move flat costs more, but you can walk through it, check the water and move in next month.
Neither is better in every case. Here's how they compare on the things that actually affect your money.
The quick comparison
| Under-construction | Ready-to-move (with completion certificate) | |
|---|---|---|
| Price per sq ft | Usually lower, especially at launch | Usually higher |
| GST | 5% (1% for affordable housing) | None |
| Stamp duty (first sale) | About 6% to 9% of composite value | Same, if bought from the builder |
| Payment | Spread over construction stages | Mostly upfront |
| Rent while you wait | You keep paying rent elsewhere | You can move in, or let it out, immediately |
| Risk | Delay, changes to specifications | What you see is what you get |
| Choice of units | Widest at launch | Limited to what's left unsold |
GST: the gap that closes the price difference
GST is the biggest structural difference between the two.
- Under-construction: 5% GST on most flats. Affordable housing (carpet area up to 60 sq m in Chennai and value up to ₹45 lakh) attracts 1%.
- Ready-to-move: no GST once the completion or occupancy certificate is issued before the sale.
On a ₹75 lakh flat, that's ₹3,75,000 of GST you avoid by buying ready-to-move. So an under-construction flat needs to be at least 5% cheaper just to break even.
A resale flat (bought from an individual owner, not the builder) has no GST either, but stamp duty and registration are 11% rather than the reduced first-sale rate. See our breakdown of the hidden costs of buying an apartment.
The cost of waiting
An under-construction flat has two hidden costs while it's being built:
- Rent. If you're renting today, you'll keep paying rent for two or three years. At ₹20,000 a month, that's ₹4.8 lakh over two years.
- Pre-EMI interest. Banks release your home loan in stages as construction progresses. Until the full loan is disbursed, you pay interest only on what's been released. These payments don't reduce your principal.
Add both to the purchase price when comparing. A ₹6 lakh discount on an under-construction flat can disappear after two years of rent and pre-EMIs.
The case for under-construction
Under-construction still makes sense in several situations:
- Launch pricing. Early buyers in good projects often get a meaningful discount, and prices typically rise as construction progresses.
- Payment flexibility. Construction-linked plans let you pay over two or three years instead of arranging the full down payment at once.
- Choice. You get the best floors, facings and layouts.
- You aren't paying rent. If you live with family or own your current home, the cost of waiting is much lower.
The risk: delays
Delayed possession is the biggest risk with under-construction property. RERA has reduced it considerably. Builders must register projects above the RERA thresholds with TNRERA, declare a completion date, and keep buyer money in a dedicated project account. If a project is delayed, buyers can seek interest for the delay or a refund.
Before booking, check:
- The project's TNRERA registration and declared completion date. See how to check TNRERA registration.
- The builder's track record: were earlier projects delivered on time?
- Construction progress: visit the site, and compare it with the quarterly updates on the RERA portal.
The case for ready-to-move
- No GST and no rent-while-waiting.
- Inspect before you buy: check finishing, ventilation, water pressure, seepage and the actual view.
- Immediate use or rental income.
- Simpler loan: the full loan is disbursed at once, so regular EMIs start immediately with no pre-EMI period.
The trade-offs: a higher price per sq ft, less choice of units, and the full down payment due at once. Make sure the building actually has its completion or occupancy certificate. "Almost ready" isn't ready-to-move for GST purposes.
Which one should you choose?
- Choose ready-to-move if you're paying rent now, need to move within a year, or want certainty.
- Choose under-construction if you have somewhere to live while you wait, are buying from a builder with a strong delivery record, and the launch price is at least 8% to 10% below comparable ready flats nearby.