Important measures developers must follow for post-lockdown revival of real estate.
The National Real Estate Development Council (NAREDCO) recently announced the post-lockdown measures that Government needs to follow for real estate revival.
To avoid the spread of the COVID-19 pandemic the lockdown has been extended, National Real Estate Development Council (NAREDCO) determined that the realty sector may not continue the business-as-usual for an unforeseeable length of time.
Therefore, NAREDCO suggested the Government to take some measures to help support the industry revival after the lockdown is lifted, which includes:
Approval validity
Different real estate builders think that if the government extends the validity of all building permissions, property licenses, consents, and other approvals granted to the developers by at least a period of one year it will be beneficial. One more option they have suggested is to make the validation of the licenses and approvals more streamlined, with no need for developers to approach authorities in person.
As we all know that the current economic situation is reeling under financial pressure due to business coming to a standstill. Thus, developers expect to be allowed to defer payment of renewal fees or charges by at least 3 months.
Moratorium on land payments
Once the lockdown is lifted, it seems real estate investment and property purchase may again be considered as a safe investment option by consumers. Homebuyers and investors will exercise caution because of the uncertainties of the coronavirus outbreak, which will certainly affect the cash flows for developers; resulting in the developers’ failure on land payments to the government.
In order to avoid these developers have requested to allow them a one-time moratorium without any interest in making the land payments who have been allotted land by the government authorities.
GST relaxations
The Government is pondering to introduce a GST relief package for the economy to equipoise the ill effects of the pandemic. Some of the features that include in the package are a slash in the GST rate charged for the real estate sector, lessening the burden of businesses strapped with liquidity shortages, providing sales for which payments have not been received as consequences of the Government-imposed lockdown. The tax may be imposed through a cash-based system rather than the current invoice-based system.
With other industries like restaurants and hospitals, the realty sector is also being considered for a six-month suspension of GST payments.
All the above relaxation Government measures will focus on keeping the business of real estate afloat. Also, these measures, if implemented, will play a crucial role to bring the economy of the country to get in motion again. Due to the current announcement scenario, it seems that the Centre ordered the extension of the lockdown, thus many more constructive strategies are required to be put in force.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
