Sri Lanka, with its stunning coastlines, rich culture, and fast-growing real estate market, has become an attractive destination for foreign investors and expats looking to buy property. However, the laws governing foreign ownership are very specific. This guide will walk you through everything you need to know — from the types of properties foreigners can buy, to legal structures, taxes, hidden costs, and even how to obtain residency.

1. 🏢 Choosing the Right Apartment Style

Your lifestyle should define the kind of apartment you choose. Whether you’re after a beachfront escape, a luxury residence, or a city-based condo, Sri Lanka has options to suit every preference.

Start by identifying the amenities that matter most to you — such as proximity to the beach, security, gym, pool access, or easy city access — and match them with your budget and long-term goals.

2. 💸 Financing Your Investment

Financing an apartment in Sri Lanka as a foreigner requires proper planning. While foreigners cannot obtain local mortgages, you can:

  • Pay fully in foreign currency via an Inward Investment Account (IIA)

  • Consider financial assistance if you’re a dual citizen or non-resident Sri Lankan

  • Use financing available abroad

Local banks offer attractive terms for eligible buyers, and developers may also offer installment plans.

3. 📄 Deeds and Legal Ownership

Before completing your purchase:

  • Consult a qualified local lawyer

  • Verify the authenticity of the title deed

  • Ensure the seller has clear, unencumbered ownership

  • Confirm that the condominium is approved under the Apartment Ownership Law

Only once due diligence is completed should you proceed to transfer the deed legally under your name.

4. 📑 Certificate of Conformity (COC)

The COC, issued by the local Municipal Council, confirms that the building:

  • Was constructed according to approved plans

  • Meets safety and zoning regulations

  • Is legally compliant

Buying a unit in a building without a valid COC may expose you to legal risks or resale issues.

5. 💼 Hidden Costs You Should Know

Buying the apartment is just the beginning. Consider recurring costs like:

  • Maintenance charges

  • Common area utilities

  • Cable/TV/internet

  • Security fees

These costs typically range from Rs. 5,000 to Rs. 100,000 per month, depending on location and amenities.

6. 🧾 Taxes & Stamp Duty

Here’s what to expect when buying property:

Type Rate
Stamp Duty 3% on first LKR 100,000, then 4%
VAT (from developer) 18%
SSCL (on top of VAT) 2.5%
Legal Fees 2–3%
Lease Stamp Duty (land) 1%

If you lease land for 99 years (which is the max duration allowed), a 1% stamp duty applies.

7. 🌍 Foreign Ownership Laws (2025)

Foreigners cannot purchase freehold land in Sri Lanka. But you can legally own:

  • Apartments/condominiums on any floor (paid via inward remittance)

  • Lease land up to 99 years

  • Inherit or receive land as a gift

  • Own land via a local company (less than 50% foreign ownership)

  • Hold land via a public company listed in Sri Lanka

  • Obtain dual citizenship and buy under your Sri Lankan status

❌ No additional 15% or 100% land tax for foreigners exists anymore (as of post-2016 amendments).

8. 🏢 Setting Up a Private Company to Buy Property

If you want to buy land (not just an apartment), you can set up a Private Limited Company with less than 50% foreign shareholding.

Steps:

  1. Register the company with the Registrar of Companies

  2. Open a local business bank account

  3. Obtain relevant approvals and permits

  4. Ensure the land is eligible for foreign-linked ownership

  5. Complete the purchase through the company

This process is legally complex — always consult a lawyer or business consultant familiar with Sri Lankan law.

9. 🏡 Residency Visas Through Real Estate Investment

Sri Lanka’s Investor Visa Program allows foreigners to gain long-term residency:

Investment Visa Duration
USD 200,000+ 10 Years
USD 100,000+ 5 Years

Funds must be deposited into an Inward Investment Account (IIA) before application. This visa is renewable and ideal for those seeking semi-permanent or permanent relocation.

10. 🔁 Moving Money In and Out of Sri Lanka

Funds for purchasing property must come through an IIA (Inward Investment Account). This ensures:

  • Legal repatriation of funds and gains

  • Future sale proceeds can be taken out in foreign currency

  • Proof of legal entry for taxation and title purposes

You can repatriate funds and profits via the same account, with minimal restrictions.

11. 💰 Capital Gains Tax (CGT)

A flat 10% Capital Gains Tax applies on the profit made from selling property, for both locals and foreigners.

Exemptions include:

  • Gains under Rs. 50,000

  • Your primary residence for 2 out of the last 3 years

  • Property owned before April 1, 2018 (valuation set as of Sept 30, 2017)

✅ Final Thoughts

While the process may seem complex, buying property in Sri Lanka is entirely possible for foreigners and expats, especially if you follow the legal framework. From buying a condo in Colombo to leasing land for your retirement villa, there are several avenues available — each with its own regulations.

At [Your Company Name], we help simplify this journey with expert legal guidance, verified property listings, and full buyer support.

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Contact us for personalized guidance or explore our curated portfolio of condominiums, apartments, and investment-ready properties across Sri Lanka. You can Call or WhatsApp NOW ☎️  +94 777 81-82-39 / +94 77543 7846 and speak to one of our team members about an appointment & more info.