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Buying a property in Sri Lanka – a complete guide

Posted by Shane Thantirimudalaige on April 11, 2024
Photo of a poolside view of a luxury villa in Sri Lanka overlooking the ocean.

Buying a property in Sri Lanka can be a dream come true for many people. With its diverse landscapes and rich culture, it truly offers something for everyone. The island paradise has been famous for its tourism and commercial property since the beginning.

In recent years, Sri Lanka has also become a popular destination for those seeking a luxurious and relaxing lifestyle. An up-and-coming market for resident and foreign investors alike. Some key factors contributing to the revival of real estate interest in the country are

– The island’s strategic location on the Indian Ocean

– Being on the doorstep of one of the fastest growing economies of the world

– The government’s objective of promoting Sri Lanka as a preferred Foreign Direct Investment (FDI) destination

Many people have visited the island in the past decade and successfully registered various types of properties. Some invest to give the property for rent, some buy land in Sri Lanka to build a second home. Some have even bought agricultural land with a colonial house. The real estate market in Sri Lanka offers a wide range of options for potential buyers.


Buying property in the South Coast of Sri Lanka

From beachfront villas and modern apartments to bare lands and tea estates. Plenty of options to choose from in Sri Lanka’s diverse real estate market. Whilst there are many opportunities closer to the main cities, Sri Lanka’s south coast is the place to be. It has all the ingredients to become one of the great lifestyle destinations of the world.

This golden region is just a 2-hour drive from the Airport. The region known as “down-south” boasts pristine beaches, a relaxed atmosphere, and a vibrant nightlife. Add to that a network of trendy cafes and restaurants, reputable hospitals, banks, supermarkets, and international schools. All this at a lower cost of living compared to western countries.

This appeals to digital nomads and investors seeking a blend of business opportunities and a beautiful place to live. Compared to real estate markets of other tropical countries in Asia, Sri Lanka is still an embryonic market. This offers the chance for a higher long term return on investment in real estate on the island.


Real Estate Laws in Sri Lanka Explained

The process of buying property in Sri Lanka is relatively simple. The country’s property laws are also relatively straightforward. 

Resident investors have the option of having direct ownership as well as ownership through a company structure.

Foreign investors have to opt for a company structure. They would own 49% of a company, while a resident trustee would own 51% through a lease for the land/property.

At Ceylon Real Estate, we work with trusted real estate agents and lawyers to help you with the entire process. Here is a detailed breakup of the costs involved in the purchasing procedure for all investors alike:

Legal Costs

Also known as Conveyancing (Property Purchase). 
Typically 1% – 2% of the property value.
Paid by the Buyer.

Stamp Duty

Amounting to 4% of the property value.
Carried out by a government assessor, organized by the buyer’s lawyer/agent. Paid by the Buyer.

Real Estate Agent’s Fee

Typically between 3% – 5% of the property value.
Paid by the Seller.
A buyer’s fee may apply if an agent acts as a buying agent.

Council Rates and Taxes: 

For example, a 4,000 sqft villa in a prime location would incur rates less than USD 500 per year.

Income Tax

Scaled up to 30% of profits and income generated by a resident or business. Paid to the Department of Inland Revenue (Central Government).
Interest income is collected at the source as a withholding tax.

Capital Gains Tax

10% on the sale of shares of properties owned through a company.
An individual pays 30% of the profit if they own the property.



If you are searching for property for sale in Sri Lanka, then you have come to the right place.

If you are searching for land for sale in Sri Lanka, then you have come to the right place.

If you are searching for houses for sale in Sri Lanka, then you have come to the right place.

We have the most experienced real estate agents in Sri Lanka. We understand your tastes and preferences better than anyone else. We curate some of the best properties on the island, especially on the south coast.

Start your property search today and embark on the journey of a lifetime in Sri Lanka. And once you have secured your dream home, you can start enjoying all that this beautiful country has to offer.

In addition to the beautiful properties available, Sri Lanka offers a high quality of life. With its affordable cost of living, and vibrant cultural scene there is no shortage of activities to enjoy. With its stunning landscapes, rich culture, and warm hospitality, you will feel at home. From exploring ancient ruins to surfing on pristine beaches, it has endless opportunities for adventure.

Buying a property in Sri Lanka is a good investment and offers a unique lifestyle experience. Start your search for your dream home in Sri Lanka today and we will help make your dreams a reality. 

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