Buying a plot in Karnataka costs less in tax than buying a flat, and considerably more in total than most buyers budget for — because the plot is only half the purchase. This breakdown covers the real numbers: stamp duty and registration at current rates, the GST question that “no GST on plots” answers badly, and the construction cost that turns a plot into a home. Arvind The Park at Devanahalli is the worked context.

The tax advantage, stated accurately

Start with the good news, because it’s real and it’s the main financial argument for plots.

Under Schedule III of the CGST Act, the sale of land is treated as neither a supply of goods nor a supply of services. It sits outside GST entirely. Buy an under-construction flat and you pay 5% GST with no input tax credit available to you as an individual — on a Rs 1 crore purchase that is Rs 5 lakh you simply hand over. Buy land and that line is zero.

That takes the statutory load on a plot to roughly 7.6%, against about 12.6% on an under-construction apartment. On a Rs 1 crore purchase the difference is Rs 5 lakh, and it is money you keep rather than a discount you have to negotiate for.

Now the part that gets left out

Here is where a confident half-truth costs people money.

A plotted development is not a bare field. The developer lays roads, builds storm water drains and sewerage, runs water and electrical infrastructure, and constructs a clubhouse. Those are services, not land. Where a seller provides that kind of development work alongside the land, the tax treatment of that component has been argued about extensively and developers structure and invoice it in different ways.

We are not going to pretend this is settled, and you should be sceptical of anyone who does. What matters practically is that your total outlay may include a development or infrastructure charge, a clubhouse charge, and a maintenance deposit — and the GST position on those is a question with a real answer that the developer can give you.

Stamp duty on a plot, and the rate that changed

Stamp duty in Karnataka is 5% for property above Rs 45 lakh, with lower slabs beneath that. On top of the duty sit a cess of 10% of the duty and, within urban limits, a surcharge of 2% of the duty. Registration is charged separately on the property value.

The rate to check twice is registration. It doubled from 1% to 2% in August 2025 — the first change to it in over two decades. A great many online stamp duty calculators, and a number of brokers, are still quoting 1%. On a Rs 1 crore plot that error is Rs 1 lakh, and it is discovered at the sub-registrar’s office on the day, which is the worst possible moment.

One more mechanic worth understanding: duty is charged on the higher of the guidance value or the actual consideration. If the guidance value for the area exceeds what you agreed to pay, you pay duty on the guidance value. Ask for the guidance value of the specific survey number before you budget.

The build, which is the real cost

This is where plot buyers most often mislead themselves, and it isn’t the developer’s fault.

A plot is not a home. After you buy it you need an architect, a plan sanction from the relevant authority, a contractor, and a construction period that realistically runs to about two years once you include design, approvals and the inevitable delays. And you need the construction budget, which for a house of any size is a substantial multiple of the small stuff.

The consequence is that comparing a plot price against a finished apartment or villa price is meaningless. The honest comparison is plot price, plus statutory charges, plus the full build cost, plus two years of wherever you’re living in the meantime — against the finished alternative. Run that comparison and plots sometimes win comfortably and sometimes don’t.

The legal work you cannot skip

Plots carry less construction risk than an under-construction flat and more legal risk. The diligence is different, not lighter, and this is the section to spend money on.

Your own lawyer — not the developer’s, not the bank’s — needs to see the title chain, the encumbrance certificate, the khata, and critically the land conversion order. Agricultural land converted for residential use is the normal path in outer Bengaluru taluks, and the conversion order is what makes that lawful. Its absence, or a defect in it, is the single most common serious problem in plot purchases.

Also check the approved layout plan against what you’re being sold. Plot dimensions, road widths, park and civic amenity areas are all specified on the approved plan, and what a sales brochure shows is not always identical to what was approved.

A checklist before you pay anything

• RERA certificate — pull it yourself, check the promoter name, survey numbers and completion date.
• Conversion order and khata — reviewed by your own lawyer, no exceptions.
• Approved layout plan — compare against the brochure, check your plot’s dimensions and road width.
• Guidance value for the exact survey number, so your duty calculation is right.
• Written cost breakdown with GST stated separately on each element.
• Setback and FAR rules for the layout — they decide how big a house you can build.
• Maintenance charge and when it starts, because it usually starts before your house does.

Seven items. A day of work, a modest legal fee, and it is the difference between a clean asset and a decade of trouble.