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Thursday, December 3, 2020

Rules and Regulation for Buying Property in Sri Lanka

After the end of the Civil War, the Sri Lanka seems totally different and is now moving ahead. The economy is showing tremendous development in many areas, tourism is booming and infrastructure and modernization is on a rise. But with President Mahinda Rajapaksa regime,buying propert is a wealthy affair.

Let’s look into the laws and taxes governing the purchasing a property in Sri Lanka.

Foreigner’s can easily buy property subject to the payment of land tax of 100% of property value or an alternative to this is the lease of land for 99 long years, bringing tax down to 7%. If you consider buying property in Sri Lanka, the you should hire a specialized lawyer, who will prepare contract. No sale is considered without the legal transfer from seller to buyer.

Buying a land as BOI(Board of Investment) project, granted to commercial projects only which exempts one from any Foreign Tax, give 100% ownership, Resident Visa and Work Permit.

The only valid title deed is registered at the regional Land Registry. It specifies the borders, any limitations (like providing public access to a beach/road) and most importantly the name(s) of the owner(s). If there are several owners named in the title deed, ALL must agree to and sign the purchase contract. Your ownership is only legal and enforceable if registered at the regional land register. The legal owner of the property is the only one allowed to sell his property; in cases where 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.

Also if you are not able to pay whole of amount at once, you can secure property by giving an advance payment of around 10-20% to the seller.

Foreigners will be exempted from tax if,

Investment in a project is over US$10 million, Condominium units of residential or non-residential accommodation on or above the 4th floor of a registered condominium apartment constructed with the approval of the UDA or large infrastructure projects with a minimum investment of $50 million.

 

 

 

 

 

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