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Buying in Sri Lanka

Buying in Sri Lanka

Property investors have turned an eye to this tiny Indian Ocean Island, a rugged land of emerald rainforest and endless beaches.

 

The Market

As recently as 2009, Sri Lanka wasn’t far from bloody conflict. Although the south of the island remained relatively safe, a civil war raged in the north for 26 years. Since the end of the war, and with the improvement of infrastructure, Sri Lankan homes have been much in demand, especially with foreign investors.

 

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How to Buy

‘In the recent past there was a 100 per cent tax imposed on foreigners, or local companies with over 25 per cent foreign ownership, buying freehold property,’ says Ivan Robinson of Lanka Real Estate, who has been in the Sri Lankan property business since 2002. Robinson explains that, under the new Rajapakse government, this tax has been removed. ‘As of August 2014, any foreign national wishing to buy a freehold title can purchase shares up to a maximum of 49 per cent in a local company that subsequently buys a property,’ he says, adding that a foreigner, or a local company in which any foreign shareholding is 50 per cent or more, may purchase a condominium apartment on or above the fourth floor of a building without any restrictions. But, he warns, ‘This is still being debated in Parliament so the most important thing is to shop around for the best lawyers who not only understand the latest amendments to any land laws pertaining to foreign buyers but, most importantly, are thorough in their title search.’

 

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Where to Buy

Galle, located on the southwestern point of Sri Lanka, is favoured by many expats, while others consider Kandy and the hill country of south-central Sri Lanka good investment options. According to Robinson, the price per acre of land in Galle is up more than 20 times since he moved to Sri Lanka 13 years ago.

 

What to Pay

R6 million for a five-bedroom seafront property about an hour’s drive from Galle; R13 million for a four-bedroom home with a pool on the beachfront in Galle, less than a 20-minute drive from the historic fort area.

 

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Contact Details

 

Text: Jocelyn Warrington
Photographs: iStock

 

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