Quick answer: A ready-to-move flat with an occupancy certificate (OC) costs less upfront: no GST, and you move in or rent it out at once. An under-construction flat is often cheaper per sq ft but adds 5% GST (1% for affordable homes) and pre-EMI interest while you may also pay rent. LIC HFL funds both; for under-construction flats the loan is released in stages as the building rises.
By Vijay Arjun V (B.Pharm, PGDM), authorised LIC HFL DSA since 2002. LIC HFL terms checked on lichousing.com on 9 October 2026; Telangana charges from the Registration & Stamps Department orders.
Under-construction or ready-to-move: the key differences
| Under-construction | Ready-to-move (with OC) | |
|---|---|---|
| GST | 5% of the price (1% for affordable homes) | None |
| Loan release | In stages, as construction progresses | In one go |
| What you pay the bank before possession | Pre-EMI: interest on the amount released so far | Full EMI from the first month |
| Rent while you wait | Usually yes, if you rent today | No |
| Risk | Delay; changes to plans or amenities | Low; you see what you buy |
| Price | Often lower per sq ft, with payment spread out | Usually higher; full payment at once |
| RERA | Must be registered; check progress on the portal | Check the OC from the local authority |
Affordable housing for GST means carpet area up to 60 sq m in metro cities such as Hyderabad and a price up to ₹45 lakh. Resale flats and flats bought after the OC is issued carry no GST.
How does pre-EMI work on an under-construction flat?
LIC HFL releases the loan in instalments linked to construction stages. Until the full loan is released, you pay only interest on the amount released (pre-EMI). Once the last instalment is released, the regular EMI starts. You can also choose to start full EMI earlier, which reduces total interest.
| ₹48 lakh loan at 7.15% (₹60 lakh flat, 80%) | Monthly payment |
|---|---|
| 25% released (₹12 lakh): pre-EMI | ₹7,150 |
| 50% released (₹24 lakh): pre-EMI | ₹14,300 |
| 75% released (₹36 lakh): pre-EMI | ₹21,450 |
| Fully released: EMI over 20 years | ₹37,648 |
Budget for pre-EMI plus your current rent until possession. Model your own figures with the EMI calculator.
Which one costs less in total?
On a ₹60 lakh flat, GST adds about ₹3 lakh to an under-construction purchase, plus pre-EMI interest and rent for 2–3 years. A ready flat avoids both but usually costs more per sq ft. Compare the all-in figure, not just the base price: stamp duty, transfer duty and registration are about 7.5% either way, plus a 0.1% mutation fee in GHMC. See the hidden costs of buying a flat.
How to reduce the risk of an under-construction flat
- Check the project on Telangana RERA: registration, promoter name and the declared completion date. See how to check a project on Telangana RERA.
- Prefer an LIC HFL APF-approved project: LIC HFL has already checked its title and approvals, and you get a processing-fee discount and no legal and technical fee. See the approved projects list.
- Link your payments to construction stages, not dates. Under RERA, a builder cannot take more than 10% of the price as an advance before the agreement for sale is registered.
- For a ready flat, insist on the occupancy certificate before registration.
Nearing possession? Use our flat possession checklist for the OC, snag list, final loan release and utilities.
Frequently asked questions
Does LIC HFL give loans for under-construction flats?
Yes. The loan is disbursed in stages as construction progresses (LIC HFL FAQ). Approved projects are processed faster.
Is GST payable on a resale flat?
No. GST applies only to under-construction flats bought from the builder before the OC.
Can I claim tax benefits on pre-EMI interest?
Under the old tax regime, interest paid before construction is complete has generally been deductible in five equal parts from the year of completion, within the overall limit. Tax rules change, so confirm with your tax adviser.
Which is easier to get a loan for?
Both are routine for LIC HFL. Ready flats with an OC and APF-approved under-construction projects have the simplest files.
Next step: share the project name and price; we will tell you the loan amount, pre-EMI and total upfront cost. Or start with a free eligibility check and read our LIC HFL home loan in Hyderabad guide.
Sources: lichousing.com home loan page and housing loan FAQ (checked 9 October 2026); GST rates on residential property (5% / 1% affordable, no GST after OC); Real Estate (Regulation and Development) Act, 2016, Section 13; Telangana Registration & Stamps Department orders. Pre-EMI and EMI figures are our calculations.
Hyderabad Home Loans is run by Elite Financial Services, an authorised Direct Selling Agent (DSA) of LIC Housing Finance Ltd. We are not LIC HFL. Loans are sanctioned solely at LIC HFL’s discretion; rates and fees may change.