The Insolvency and Bankruptcy Board of India (IBBI) has announced that home buyers will be exempt from paying the 0.25% regulatory fee imposed on corporate insolvency resolution plans (CIRP).
This exemption will particularly benefit small home buyers who have put together resolution plans to rescue stressed real estate projects. The regulatory fee was introduced by the IBBI in September 2020 as part of its efforts to improve its finances and reduce reliance on government grants.
The fee is also applicable to third-party service providers and professionals appointed by insolvency practitioners. The fee will now only be applied to the realisable value to creditors under the resolution plan, and only in cases where the plan exceeds the liquidation value.
The move has been welcomed by industry experts, who believe it will reduce the cost burden on resolution plans from home buyers and support the completion of real estate projects.
