Learn How To Buy Land in Sri Lanka and Stay Safe from Real Estate Frauds

The land prices in Sri Lanka have consistently seen an upward trend throughout the years. The demand for it ranges from residential purposes to construction, agriculture and leisure. Besides this, there have been numerous searches for the keyword ‘how to buy land in Sri Lanka’ as well. This goes on to show how much of a demand exists for land in Sri Lanka, particularly in the Western province where the prices are greater than in any other place. In the last quarter of 2021, the average overall residential land prices in Sri Lanka amounted to LKR 1.65 million per perch. The land prices in Colombo were LKR 11.68 million per perch in Q4 2021 while the Western province which is the most developed region on the island recorded an average of LKR 1.27 million per perch excluding Colombo city land values.

However, at present only locals can purchase land for sale in Sri Lanka. But land can be leased for up to a period of 99 years for foreigners. If a foreigner wants to own property or buy in Sri Lanka, the only option they can consider is buying an apartment in Sri Lanka. However, the Sri Lankan property law has exceptions that in fact allow a foreigner to own land if it is an inheritance. It should clearly state these properties in the last will that states who should own which properties after a considering person’s death. 

Since Sri Lanka is also a great place for living surrounded by natural landscapes, infrastructure developments, utilities and more, the island serves as the perfect holiday destination and residential home. 

Among the locals who are looking for ways how to buy land in Sri Lanka to build a house, one of the first concerns is how to choose land. There is also the popular misconception that you can’t buy land if you don’t have enough money when in reality it is the complete opposite today. You don’t have to have the total amount of money to fund your investment. It can simply be taken alongside a mortgage loan that you have to pay a monthly instalment and interest depending on your capacity to pay.

To address the different factors to consider when finding the perfect plot we dove into looking at what factors should you know first to find this land.

  • The area 

The area that the property is located in has a large impact on your house plan, house design, building potential and even the building regulations applicable to you. The neighbourhood also plays an important role in determining the convenience of your living experience in the said town. 

In terms of building the house, in a place like Kandy which is located in the hilly region, the building regulations applicable are more detailed and stricter than building in another flat land area. This is to ensure that it doesn’t pose a threat to other buildings in the surrounding area and has minimal impact on the environment. As a result, it is protected from potential landslides and is able to withstand pressure. Because of this, before you purchase land, consult a structural engineer in the process.

You could also consider meeting up with one of the best valuers in Sri Lanka while buying a plot to ensure the one you’re purchasing is worthy and will generate capital gains in the future.

  • Utilities 

The more remote an area is the more difficult it is to get access to utilities. Water and electricity are basic necessities and essentials that we can’t survive without in today’s world. Most land plots offered by companies that have created a gated community offer these services alongside the property the buyer purchases. Because of this, there is no additional hassle in applying for those facilities.

  • Road access 

Having access to the main road and being able to get to places such as the hospital, grocery etc. easily without having to spend too long travelling on the road should be another detail to be considered. You will also need to make sure that the land isn’t in the way of any potential roadway constructions expected to take place. If not, you may end up losing the property you spent time searching for hardly.

Other factors to include in a checklist of buying land to build a house are as follows.

  1. Approval requirements for a loan
  2. Check whether the water flows out of the land or is contained within it (The slope)
  3. Whether the land is filled or natural  
  4. If there is a Street Line Certificate (Veethi Rekha) provided for the land
  5. Check on the Non-vesting and Ownership certificate (If the land is neither vested with the Municipality or is to be sold off by the Municipality for non-payment of assessment rates)
  6. Check the water supply (Need a minimum of 35 perches if you’re planning to have a well inside the land).
  7. Check the electricity supply (whether there is an electric pole close to the land)
  8. The availability of high tension lines or phone masts close by 
  9. Whether there is high-velocity water running close by (consider an alternative plot if there is one, as it could affect the property over time.)
  10. Whether there is a stream running inside or adjacent to the property and if a reservation has been kept for the stream. (reservation is typically 3 ft from the centre of the stream, however, this can vary from council and size of the stream.)
  11. Whether it is close to landfills or a waste disposing area
  12. Get a copy of the deed and verify it with your lawyer
  13. Check the survey plan (should be less than 10 years old and check if it is approved by the council)
  14. Clear deeds for min 35 years (paththiru / title report)
  15. If the land is on a private road, then the lot should have the ‘Right-of-way’ given by the other lots that are before it
  16. If the land has previously been a cultivated land (e.g. Paddy, Rubber), or has the names ‘owita’, ‘deniya’ or ‘kumbura’ mentioned in the deed, then need to get a clearance from the Commissioner General of Agrarian Services Development confirming that the land under reference has been removed or is not in the Register of Paddy or other Lands. The application should be submitted to your local Govijana Sewa office. 
  17. If the name (s) of the land, road etc. are the same in all deeds. If the names are different or there’s a spelling difference, then this needs to be corrected through a Certificate of Rectification.

How much land do I need to buy to build a house in Sri Lanka? 

Once you have decided to purchase a land plot for sale in any city in Sri Lanka, the next thing is to decide on the acres to purchase. Generally, you’ll require about 6 perches at minimum to build a house according to the Sri Lankan land law. However, in a city like Colombo, the freedom you have to build a large home is limited. Because of this, the land space available to purchase is low. Here you might have to compromise sometimes on gardening space, large parking space, etc. But on the outskirts of Colombo or the rural provinces, you will certainly find large acres of land available to purchase freely. It is also this reason that allows homeowners here to construct large houses. 

On the other hand, there is a popular misconception that a storied house would take more room to build. But in reality, since you are increasing the building in height and not in width, a storied house can even be constructed in a small space. 

Questions to ask when buying land to build a house

Learning more about the land and how to buy land in Sri Lanka that you are buying is necessary to make sure that when you actually start the building process everything works as smoothly as possible. Most people who haven’t discussed essential details about the land, the permission status etc. have ended up falling for real estate frauds losing their entire savings. Because of this we also recommend that you work alongside a real estate lawyer that knows the ins and outs of buying property in Sri Lanka. 

Here are a few questions we suggest you ask before finalizing any property deal. 

finding the right land to build a house in sri lanka
  • Are there utility supplies like electricity and water?

Check with the agent to check if the property has a well or a water supply. In most situations, if you don’t have access to mains water, you’ll have to apply for it through the relevant Municipal Council. The cost of this varies depending on the site’s location and nature. 

  • What are the ground conditions like?

The nature of the ground will certainly impact the quality of your construction. It wouldn’t matter even if you have used the best material if the ground isn’t in the best condition. Because of this, we recommend first checking the soil quality with a professional structural engineer before buying. The poor quality of the ground will also add additional costs to your budget like having to refill the land and redo the foundation—if you’ve already built it on the bad quality ground. 

  • What about the deeds and clearances?

Deeds and clearances are key when proving your ownership of a particular property. At the same time, it is also the point that most people fall prey to when purchasing land from the wrong people. To get ownership of land in Sri Lanka it is always best to check through the records of the past 10 years to ensure that the land actually belongs to the person selling it. After you’ve bought it, make sure the name it is registered under matches your name and has no spelling errors at all whatsoever.

  • What amenities and facilities are available in the vicinity?

Check out the neighbourhood where the property is located and find out whether you are able to find grocery stores, hospitals, schools and other necessities in the vicinity. This will save time and make life much easier. If you are someone that is travelling to and from work you might also want to consider the average time it takes to travel to your workplace and public transport options available if you’re using it.  

  • Why is the owner selling the land?

While this might not necessarily be as important as the previous questions, it is still something you need to ask. Certain land frauds take place in the country under the pretence that the said owner is leaving abroad and is in urgent need of money. However, in reality, the real owner may not even be aware of the whole transaction taking place. Find out the backstory and then make the decision of buying any property.

How to Buy Land in Sri Lanka

  • Step 1 – Check the documents 

Before finalizing a purchase of land in Sri Lanka first start by checking the legal document. With the help of a lawyer, evaluate the extracts of the land from the relevant land registry. By doing this, the buyer can avoid being a victim of land scams

Make sure to check the street line, building line certificates, certificate of conformity, non-vesting documents from the local authority to avoid legal matters that could arrive later when developing the land.

Once you are sure that you are purchasing the right land from the right owner, then start arranging the funds you require to purchase the land. You can fund this purchase by yourself or opt to apply for a bank loan. In Sri Lanka, an average of 27% of property buyers have applied for bank loans. These loans are offered at different rates and can be evaluated through the Home Loan Comparison page on LankaPropertyWeb. Find the best one for you and submit the required documents to get your loan approved.

  • Step 2 – Drafting the deed, signing and attesting 

Next work on drafting the deed with the help of a lawyer. A deed is a legal document that provides information about the ownership of a property. There are several types of deeds depending on how the property is transferred, but in this case the deed is usually termed as a ‘Deed of Transfer’. 

From the spellings to the address and other details, everything in the deed should be mentioned accurately to avoid confusion and falling prey to real estate frauds in the future. 

  • Step 3 – Register the deed in the land registry 

Pay the stamp duty charges and register the deed in the relevant land registry in Sri Lanka. 

  • Step 4 – Obtain the registered deed’s original copy

After your deed has been registered, make sure to get a copy of the original certificate. If you have purchased the said land using a bank loan, you will have to hand over the deed to the bank as a security for your loan. Once you have paid off the entire amount, the deed will be handed back to you. 

What is the best place to live in Sri Lanka?

Land for sale in Sri Lanka can be found literally anywhere. Some are close to the beach, others close to the river and some are ideal for cultivation. But when it comes to living in Sri Lanka, the land you choose to build a permanent house in matters. 

Since the country is still in its development stage, there are a few towns in Sri Lanka that have experienced the most westernization and industrialization. With super malls, restaurants, high-speed internet access and more, the Western Province is one of the best areas to live in. 

From here, towns such as Colombo and its suburbs like Mount Lavinia, Piliyandala, Battaramulla and Dehiwala along with Gampaha are great places to stay. In addition to this Kandy, Nuwara Eliya and Gampola in the Central Province, Galle, Matara and Hambantota in the Southern Province are other options to consider when looking for how to buy land in Sri Lanka.

Overall Sri Lanka is a good place to live and invest in. Find the best places to live in Colombo and read up on why they should be your choice or visit property websites such as lankapropertyweb.com to find great properties to invest in Sri Lanka and earn a high ROI. With real estate being one the best investment in Sri Lanka at this point, it’ll certainly be a worthy decision you’ll come to be thankful for in the long run. 

For more details on the dos and don’ts of buying land in Sri Lanka read our Property Buying Guide.

Posted Date: 4th April 2022

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