Guide to buying property in Sri Lanka for foreigners and expats
What are the rules and regulations for expats and foreigners buying and renting property in Sri Lanka ?
Foreigners can no longer purchase property in Sri Lanka and can only lease it for up to 99 years (previously a foreigner could purchase properly by paying a 100% tax). A 7% tax (previously 15%) will need to be paid on the leased property (whether it is a 1 year, 33 year or 99 year lease).
Foreigners will be exempted from the law under the following circumstances:
Read full details in the Land Act No. 38
Sale of land to foreigners has been prohibited from the 2013 budget. Instead the land can only be leased out for a max of 99 years.
Taxes for landlords
Anyone leasing out a property to a foreigner or local will need to pay a 1% stamp duty when the rent is collected.
Update 31/10/2014 - Land (Restrictions and Alienation) Act published. Read it from here
Update 03/08/2014 - New legislation is being drafted to strictly enforce rules pertaining to the 2013 ban on foreigners owning land. There will be a tax of 15 per cent on the value of the lease. With new laws you are also not allowed to circumvent this ban by purchasing the land through a majority Sri Lankan nominee owned company. It's assumed that this law will not apply to foreign-owned companies of more than 10 years (TBC). More>>
Update 03/11/13 - the Investment Promotion Ministry is to submit a cabinet paper to reduce the land transfer tax to below 10 per cent to facilitate foreigners seeking to lease land.
Update 17/02/13 - Sri Lankan expats holding foreign citizenship can now buy land in Sri Lanka. More>
Last update: July 2015
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