Buying property in Sri Lanka

Foreigners can freely buy properties as long as they are willing to pay the Land Tax for foreigners at 100% of the property value. An alternative is to lease the land for 99 years, bringing the tax down to 7%.
When buying property, it is important to hire a lawyer, who will prepare the contract. No sale is considered final without the legal transfer of ownership from seller to the buyer.
The legal owner of the property is the only one allowed to sell his property; in cases where a more than one person is considered the legal owners of the land each owner should agree to the sale. In most cases, an estate agency would ensure the ownership of the property even before the public offering. The deed of ownership must be checked by the lawyer in the Land Registry.
Both parties sign the transfer contract in the presence of the lawyer. The buyer also makes the full payment. Transfer is considered valid from the moment of signature by both parties. After which, the lawyer then registers the property in the buyer's name.
All property transactions are done in cash, in rupee. Most locals do not accept cash cheques or money transfers.
In cases where you do not have enough money to purchase the property at once, most locals accept advance deposits for the property. It is expected that the deposit would amount to 10% - 20 % of the property's value. Money to pay for the deposit can be secured by a lawyer, trustee or other middleman. The shorter the period between advance and final buy the better. It is advisable to be in Sri Lanka for the final buy. Being in Sri Lanka saves additional lawyer's fees, who need to hold a power of attorney issued by the buyer to legally finalize the sale in cases where the buyer is not present.
Stamp Duty is LKR3,000 (US$29) for the first LKR100,00 (US$962)

Thanks Courty for the useful information shared.

I am keen on investing in an independent 3 - 4 bedroom 2-level bungalow with a walled compound with a courtyard, backyard et al., in Sri Lanka.

But not in Colombo, but in the interiors, where the prices I am told are much less. Could you give me some ballpark / indicative figures ?

I am aware that land is measured in ‘Perches' there. I am familiar with ‘Grounds'. My requirement is about 3 grounds.

Can you also share with me your full contact details.

I am planning on my next visit to Sri Lanka in August 2012, by which time I hope to finalise on a good property – one having clean and clear papers, without any litigations.

Thanks for your contributions.

Harmonie.

Surprised no one has said that the 100%tax is to be abolished in January and replaced by a general land tax. This much better for foreign buyers like me.  Mike

Hi,
But i think if u can buy the land by local guy name its so chhep.but i think better if u can buy it in ur name.in haputhale nuwara eliyaa areas best for bungaloes.

Hey Wasthu!

Better get your message across clearly!! Either buy in your name or another person's name - the latter would not be a good idea as the buyer can be cheated at a later date!!!

Nothing is beyond people nowadays - even amongst friends!!

Think carefully.

buying in someone else's name? are you mad!
Does anyone know what the land tax will be after the new law is passed? Will it be a % of sale price?
Thanks
Mike

[Moderated]

Buying apartment is easier then land or houses, cause above 5th floor tax free for expats. and its safe and good investment.

100% taxation is not abolished at all but certain revisions were introduced.

As an example, investors with certain investment ceilings can go for properties (for business purposes) without paying the land transfer tax.

If you are after an apartment, you can easily buy anything above the 5th floor without paying the so called land transfer tax.

Dont even think about buying property in Sri Lanka, whilst the 100% tax is being abolished and will be replaced with some kind of land tax.
As for using a local dont go down this road as there is no gurantee that the house is owned by the people who say they do, big problems

Well I had worked in SL previously and do have knowledge in such property buying stuff. The deals are complicated owing to the possibility that those who 'say' they own the land may not actually be the case. The land could be owned by someone else and titles are just not transparent enough. It's a really dicey thing to do this in this nation. It's quite a rare case that the titles come 'clean'.

As a start, Form a local company legally with finding genuine businessmen as directors then you can buy land under company name.

If you are investing I hotel sector .you have much benefits

The leading sub-sector is accommodation – hotels / boutique hotels / guest houses / villas -
It is estimated that an additional accommodation capacity of 35,000 is needed for the next 05 years to accommodate increasing arrivals. To achieve the required level of accommodation capacity and other services, the sector requires an investment of US$ 3 billion over next 05 years into the following segments / sub-sectors which provides diversified Key Sectors for Investment for investors.

Emerging Key Sectors For Investment have already attracted the attention of the international investors including-Shangri-La Group, CATIC (China) The Minor group (Thailand) and M-Far Hotels (Oman) who have committed substantial investments. Additionally Sixth Sense Hotels, Banyan Group, Accor Hotels, Dushit (Thailand), and ITC (India) are currently exploring the opportunities.

Investment laws permit 100% foreign ownership in this Sector. Foreign Investments over US$ 10 million are allowed to outright purchase land and properties pertaining to the project.

Please visit investsrilanka.com

If you want to buy a property under a company name, then the minimum investment criterion comes in too.

These rules are strict.

If you can afford the minimum investment criterion, why do you want to go for local business partner.

As of now, properties above the 5th floor found to be safe from the transfer tax.

You can buy an apartment directly from Mireka Capital, JKH or any of the prominent apartment builders.

Or else either you have to start a hotel, hospital or company. This allows you to buy a property to run the business with no land transfer cost. But the eligibility criterion depends from one place to another and one business to another.

I am not suggesting a partnership for the property ownership as it found to be the most complicated matter in SL. I am talking to you with my personal experience here.

If you are after a land or anything other than an apartment, you have to do loads of research to find correct details from the land registry. Sometimes you have to check for at least 100 years to see whether there are any complexities exist.

Cheers!

Hi all,
Thought Id have a say and share my personal experiences on buying 1 acre of beach front land and building a house and pool.  Some may agree or disagree on the following but its from the heart and my personal story in this country.  Bear in mind, some may want to do other things in SL, business, retire at 55, mine is to have a comfortable life with No/very little out goings.

Find a good lawyer, the(legal) loop hole in the 100% tax thing worked like this in my case - I paid 100% on the last time the land sold, which was a long time ago so the taxation was very low.  Pay for the 100yr  title search(costs very little) so no long lost family member can pop up out of the blue. I was kept informed every step of the way.  Dont go down the SL partner road, or 99 lease hold, get the title deeds in your name through your lawyer, like home.

Remember, undertaking this sort of investment/project is NOT like doing it in your home country, you need to be patient, vigilant, aware and focused.  Things happen at a different pace or not at all, you need to be flexible and look for alternatives when brick walls come up, don't worry or stress...keep calm and carry on so to speak! 

It can be a big test to those whos first experience of purchasing property or negotiating with people from another country abroad, SL is no exception.

Seeking country 4hrs flight or less from the Middle East where I work, NZ is too far away for short holidays or days off. I fell in love with SL and still am.  I looked at Bulgaria, Turkey, Spain, Thailand, Germany but either weather, cost, deeds, flight times, location or crime ruled all but SL out.

Found an architect, built the house and pool over 3yrs.   Things have gone from strength to strength on the property and all in all very happy with the whole project and now have a wonderful architecturally designed house and pool in which to have my holidays in with friends and family.
Perhaps Ive met the right people along the way and been lucky.  None of the horror stories Ive been warned of have happened (yet! touch wood) but it certainly hasnt been a easy ride.

To get anywhere in life you have to take a chance and persevere right?

There is no mortgage on the land, house or pool in SL. 
The house in NZ still has 20yrs of payments to go! Council rates and water every 3 months with a cost of living rising, tired of that! .....sure it is also in SL,  but tax is minimal, I have my own well for water and I recycle, there is a use for everything here, compost for the gardens, money for glass or burn now and then for combustibles.

Sure, you may feel you are getting ripped off now and then when you deal with contractors or companies, alot of the time it could be hearsay, for instance, other forgieners who have been "taken for a ride" perhaps bitter about the country and anything you do or say will always end in negative stuff....listen and keep away, make your own judgments and get advice from your lawyer, mine came and sat in on all of my dealings and made it all quite clear to all.  There are alot of positive westerners in SL, you just gotta find them.
Language is another hurdle, there is no english spoken where I am but if you go down South, Its a bit more prevalent, as with other languages as well.

I have a fulltime caretaker on the land and built him a small dwelling, the property is safe.
Ive investigated everything, thought about outcomes, you have to be dedicated, 100%  and NOT jump into idea this without plans or on a whim.  Things will still go wrong and have....:-)

Deciding a few years ago I wanted to retire by 45, well not work and be a slave to tax, bills and the like, Ill move to the house in another year or 2, teach the local kids to swim and a little english slowly which is so rewarding, mostly for very little $$ or free.

Ive planted hundreds of plants, trees, vegetables, fruit trees so will be self sufficient, its great creating gardens on such a large piece of land where everything grows in a lovely temperature all year round.

As for residence, fly away every 3/6 months and re enter on another tourist visa...India is but a US$70 flight away.   (thats if you want the easy way and under 55)  Ill make ends meet doing seasonal jobs in NZ for 2 or 3 months a year....(if I have to)

There are so many things going for this country I hope as time goes by, it will improve for Sri Lankans and foreigners who choose to invest there.  In the mean time, I'm positive about low crime, good tropical weather, jungles and ancient sites, deserted beaches, wildlife, fresh produce and seafood, losing track of time and not wearing a watch, geographical location and escaping being a slave to any government which continues to take take take...

Dont get me wrong, I dont have bucket loads of money, Ive poured everything into this project, seen the potential and taken the gamble which is finally paying off.  The iphone is replaced with a $US10 nokia, the Mac goes on only for Skype to Mum or checking no ones arriving in SL that ive missed when I go on holiday at the beach house.

Sure, a countries stability is something to consider, seems in that area its ok at the present time, foreign investment is being encouraged.  My lawyer has been a godsend and assisted me each step of the way....for very little money and have become good friends with her husband and whole extended family.

Ive made some wonderful friends in SL, (filtered out the not so good ones which you will find in any country) expats and local, all who have assisted me on this journey.
 
Look at it like this, when, in my/our life time these days will you find a country thats full of natural beauty and on the way UP, not down...yes, not without problems but the grounding is there.  The infrastructure is being put in place all around and its something to be positive about.  I couldnt afford to buy the same piece of land now, priced OUT!!!!  Of course it all depends on family ties, children, jobs, partners, wives, risk factor,  husbands etc etc...
Many of my friends and family who have come and stayed love it, the country and people, a few have purchased houses or land across the island. 

Surfs up and the bananas need picking!

Find the right people, listen well, get the right advice, stay positive and keep focused on the end product whatever it may be,  but most of all enjoy the ride, it will pay off!

Question everything,  good luck....

Hi
kiwi007 thanks for the story. And you do not think about the resident visa? Not necessarily, as an investor.

Gidday Asag,
Well yes I did, but I want to keep overheads down, leaving the country and returning(3/6/12mths) depending on what  length of visa I get or choose to extend each time suits my situation without setting up a business.  Doing that would mean lawyers fees each year for book keeping and the like which comes at a cost.   
Not being tied down or committed enhances the idea of being really free and living life.
Bear in mind, I wont be working in SL and the house is a private residence and not making an income. 
Everyones situation is different, you can find info on many SL immigration sites, have a google.

kiwi007
I did not find in google sites with services on visas. only one site that I did not like. because people did not answer my question.

Hi asag



You can check about the Visa
Sri Lanka Embassy at Moscow Russia

Address as follows

Address: 24, Schepkina str., Moscow, 129090 Russia

Web-site: www.srilankaembassy.org

Tel.: +7 (495) 688-16-20begin_of_the_skype_highlighting FREE +7 (495) 688-16-20 , 688-16-51, 688-14-63

Fax: +7 (495) 688-17-57

Hi fl3
Thanks for this information, I learned this site completely.
But I do not have such a lot of money to invest. So I'm looking for other options.

Hi

What kind of Business your are looking for in Sri Lanka.

Hi there Kiwi, your post was the most positive and after reading it I am even more interested in buying in SL. Is there any way I could get your lawyers name and number?

Hi Bluesy,
Sent you a message...
Regards
Cam

(moderated: pls post in the housing section)

Hi there!
I loved your letter,I'm serching the net for any information from people who done it,it was very helpful.Can you tell me please, if you buy property in Sri Lanka and are not resident,do you qualify for shipping your stuff in to the country without costum charges? And may I have the name and contact number and address of your lawyer? he sounds like a treasure and would be very helpful for us to have such a contact. Thank you in advance.
Regards Yolanda
Ps: I have more questions if you dont mind, when you email me.
My email: [email protected]

hi

a good experience and I can see you have a lawyer you trust. would you mind giving me his name and address as I am looking for a good lawyer to help with buying a plot.
thank you

alistair steel

Hi,

I live in England.

I have owned a house between Matara and Dikwella for the last 10 years. This was before the reimposition of Land Tax so I own the freehold which is registered with the Matara Land Registry. It's a beachside colonial bungalow, 4/5 bedrooms (with a/c),3 bathrooms, staff quarters. Large swimming pool overlooking the sea. 53 perches of established garden surrounded by high perimeter wall. For personal reasons I now wish to sell.

Are you interested in buying?

Is anyone else?

Jonathan Lovett.
email [email protected]

Hi homebody > you should post your advert in the housing in Sri Lanka section. Thank you.

Thank you. I was unaware of it's existence! I was impelled to make the comment on reading the various posts by Sri Lankans seeking 'partners'. In Sri Lanka 'partner' - in the property sphere is a highly ambiguous concept of doubtful legality fraught with potential danger for the would be foreign buyer.

Hello everyone,
Property can still be bought buy foreigners in Sri Lanka.
The 100% tax rule still applies but can be greatly reduced as explained in previous posts.

The only restrictions that have recently come up have been foreigners not being able to purchase coastal property for tourism purposes, for residential(private home) no problem. 
This new rule is obviously in place to curb mass buy ups by overseas investors or developers.

There is loads of info around the web, some out of date some not, you need to read between the lines and eventually you will find out the real facts surrounding this subject.

http://www.globalpropertyguide.com/Asia … ying-Guidehttp://www.srilankaembassyrome.org/en/t … gners.html

Best regards..

Thank you. That's what I thought was the case! However there are politicians at the moment talking about changing the situation to prevent all new foreign ownership of property. Whilst this might be just demagoguery as Sri Lanka desperately needs foreign exchange it does suggest that it might be wise to get on with it if you are thinking about buying!

hi ..i would like to help you

yes you can it.i like help you

Nice of you. How?

@Sameera Madusanaka > please note that free advertisement is not allowed on the forum. Thank you.

Hello everyone, found this on Daily Mail Sri Lanka online recently.....
Homebody was right when he heard something was brewing....

No outright sale of land in Sri Lanka to foreigners

Cabinet has decided to prohibit the outright transfer of property to foreigners, taking into consideration the increasing demand for foreign investment with the expansion of developmental activities by the Government.

Cabinet approval was granted to make regulations under the State Land Ordinance and to introduce amendments to the Notaries Ordinance and Registration of Documents Ordinance for the implementation of regulations pertaining to state and private lands in the country.

The new regulations will prohibit foreigners from obtaining absolute ownership of state or private lands in Sri Lanka. But the leasing of such lands on a long term lease basis would be permitted.

The prohibition will not apply to the purchasing of lands for foreign embassies and high commissions based in Sri Lanka. The Cabinet memo had been jointly presented by Ministers John Seneviratne and Janaka Bandara Tennakone.

Can u tel me u lawyer name u use please

@Londoner12 ???