A Guide to Property Purchase in Sri Lanka

This guide is designed to highlight the major aspects relating to a property purchase in Sri Lanka. This is Not a legal guide. If you consider buying (any) property in Sri Lanka we recommend strongly to consult with a specialised lawyer. For more information about qualified lawyers, surveyors and consultants please click here…

Buying Residential Property in Sri Lanka as a Foreigner
To buy residential property in Sri Lanka (private home, villa, construction land) you will have to pay a “foreigner tax” up to 100% of the purchase price. The exact amount depends on property type, location and concept. While long-term leases and/or a BOI (Board of Investment) project might be an alternative, you will need an independent professional assessment for each individual property.

Buying Property in Sri Lanka as a BOI (Board of Investment) project
While a BOI status provides many benefits (no “Foreigner Tax”, 100% Ownership, Residence Visa and Work Permit, Duty Free Import of Goods*, Tax Exemption*) one must keep in mind that a BOI status is only granted for Commercial Projects. Nobody expects you to make a fortune but you will have to pay taxes, get licences, employ local staff and keep proper books. BOI registration and consultant (you will need one) fees are between US$ 3.000 – US$ 5.000 on top of your initial investment. For more information about BOI projects and/or recommended consultants please contact us
* conditions apply

Sri Lanka Title Deeds and Land Ownership Documents
The only valid title deed is the one which is registered at the regional land register. 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.
This applies to long-term leases, too. They MUST be registered at the land register.
Without a registration all contracts/agreements you might have are basically useless. Sure, you can go to court and most probably you will get some of your money back (if there is any left). But this will take 5 – 12 years in which you won’t be able to move on your own property.

Buying Property in Sri Lanka through a Local Partner
As mentioned above, the only relevant factor when it comes to property ownership in Sri Lanka is the name in the land register. If you consider to buy property through a local partner you should know the person (obviously) very well. The big question really is if something should happen to your partner. All private contracts you might have will be nil and void; the inheritance (including the land in his name) will go to the relatives. You might to give this one a good thought.

What is a "Perch"?
The traditional land measurement in Sri Lanka is the "Perch". Here is
some help with the conversion:

A Perch is 25 sqm
4.000 sqm are 160 Perches or one Acre
2,5 Acres are one Hectare

Some additional Points

• A own access to the next public road should be part of the title deed. Passage rights can be revoked, making it slightly difficult to access your property.
• Be sure that the property you are purchasing is free of inhabitants. Including gardeners, maids and/or managers. Sri Lanka does have a “squatter law” which basically means you’ll have to compensate anybody who has lived on the land for a while. Regardless if he/she had a right to do so or not.
• Get a surveyor to re-confirm the boundaries of the property as stated in the title deed.
• Some properties include traditional pathways which are public and cannot be blocked off. For example to allow fishermen access to the beach. Ensure that you fully understand the obligations if this should be the case with your property.

If you have any questions please don’t hesitate to contact us…