With Prime Minister Narendra Modi announcing the setting up of a 'COVID-19 Economic Response Task Force' to decide on a relief package for sectors hit by the coronavirus outbreak, has recommended that EMIs payable by homebuyers as well as dues from developers be deferred for a year.
The sector, that anticipates construction work to come to a halt and sales to be hit, has also recommended that no stamp duty should be charged for a period of six months and a property tax abatement be given for a year.
Prime Minister’s address reflects the government’s acknowledgement of the severe implications of the ongoing COVID-19 outbreak on 130 crore citizens of India, numerous industries and overall economy alike, realtors said.
“The formation of special central committee - Govt’s COVID economic response taskforce under the able leadership of Union Minister of Finance, will open doors for discussions on economic challenges faced by us,” said Nayan Shah, president, CREDAI MCHI.
Given the current situation where daily wage workers are already struggling for their livelihood, “we hope that the designated taskforce takes prompt and decisive decisions to guide the economy towards its revival. It is also imperative that it includes representatives from all key stakeholders in order to be able to adequately support businesses across different industries,” he said.
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“We hope the newly formed task force will look into suspending all financial obligations including payment for premium to the MCGM/Special planning authority/ Government for 1 year. CREDAI MCHI also strongly believes that all premiums payable to the MCGM, SPAs and state government should be reduced by 75% for a period of 5 years. All EMIs due and payable by all residential home buyers as well as the EMIs, interest, principal due from developers should be deferred for a period of 12 months. Other recommendations include 0% stamp duty for 6 months and abating property tax for a period of 1 year," he said.
“The COVID-19 Economic Task Force should watch out for an already struggling real estate industry and ensure that the interests of buyers are protected and larger stakeholders are assured of their interest. In addition, it will also be important to safeguard the interest of the workforce, real estate and construction being the second largest employer in India,” said Sankey Prasad, Managing Director & Chairman (India), Colliers International.
Boman Irani, vice president, CREDAI MCHI has recommended that COVID be declared as a national disaster. The prime minister in his address has called for setting up a Covid 19 Taskforce. “This shows that Covid 19 is a special situation…Home buyers need hand-holding in these times and therefore declaring this a natural disaster by the government will allow financial institutions to support developers and homebuyers.”
“Homebuyers should be given a one year EMI break. The entire recognised Indian residential real estate sector sales is estimated to be around $43/50 billion which means real estate purchase of $1billion takes place a week. This will get impacted on account of COVID 19 fears and if these transactions are not supported there will be huge losses to the exchequer,” he added.
Credai in a statement on March 18 had said that Section 6 of RERA law provides that registration granted under section 5 may be extended by the Authority on an application made by the promoter due to force majeure."COVID 19 does get covered under any other calamity caused by nature. Hence, it is humbly requested to please issue an advisory to the Real Estate Regulatory Authorities in all the states to please extend the time of completion of real estate projects as well as exempt the penal charges under RERA for a period of one year," CREDAI had said.