Lanka withdraws ban on foreigners buying property

Sri Lanka has announced it would lift a ban on foreigners owning property as the cash-strapped country sought to attract foreign capital to rebuild its war-ravaged economy.
Finance Minister Ravi Karunanayake on Thursday told parliament of the potential to attract much-needed foreign investment in the construction sector, which is experiencing a boom following the end of the island’s ethnic war in 2009.

“To further incentivise such investment, we will remove freehold right restrictions from the ground floor,” the minister said, referring to a 2014 ban on foreigners purchasing real estate.

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(Source: Gulf Times)

Existing Land Tax for foreigners to be removed

The Amendment Bill for the removal of the land tax imposed on foreigners or companies that hold more than 50% foreign shares, when leasing lands to them, has been gazetted on the instructions of the Finance Minister.

The notification was published under section 11 in the September 02 government gazette notification and the Amendment Act has been named as the Bill Amendment Restrictions Act, No. 38 of 2014.

The Amendment bill has proposed the abolition of the land tax from January 01, 2016.

According to the land tax that was effective from January 01, 2013, if land is being to a foreigner or a company where foreign shares are over 50%, of the tax payable, 15% is charged as a land tax.

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Source: Sri Lanka Mirror

Sri Lanka to ease restrictions on foreigners acquiring land for investment

Sri Lanka is taking measures to ease the restrictions imposed on foreigners acquiring land in the island nation for investment projects, the Ministry of Finance said in a statement on Wednesday.

According to the statement, a new draft bill is being prepared with the aim of providing provisions to provide ownership of land without being affected by the Land Restriction and Alienation Act of Sri Lanka.

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(Source: Xinhua)

2016 Budget - Mansion tax, no tax on land leases for foreigners

The 2016 Budget proposes to remove taxes on land leases, ease restrictions on land transfer and no Mansion Tax for condominiums. 

Below are the relevant extracts.

Land (Restriction on Alienation) Act

The budget proposes to remove the tax imposed on the leasing of land to foreigners and also to consider the removal of restrictions on ownership on identified investments imposed through the Land (Restrictions on Alienation) Act, which has been an impediment for attracting investments to the country.

The key changes are:

(i) Restriction on transfer will be removed for certain identified investments.

(ii) Tax on leasing of lands will be removed.

(the relevant provisions of the Land (Restriction on Alienation) Act No. 38 of 2014 will be amended]

Mansion Tax (PART VIII of the Finance Act No. 10 of 2015)

(i) The mansion tax applicable on condominium units will be removed; and 

(ii) The first installment of the Mansion tax is payable on or before March 31, 2016. 

(PART VIII of the Finance Act No. 10 of 2015 will be amended)

Digital 'Land Bank'

The budget proposes to introduce a “land bank” which is an electronic database of state-owned lands. Subsequently, this database can be extended to contain records of the privately owned land as well.

Sri Lanka to ease land issues for investors

Sri Lanka government is reviewing existing laws on state-owned lands to broad-base ownership, relax the land use ceiling and remove restrictions on foreigners buying land. A new draft bill is now being prepared with the aim of providing provisions to provide ownership of land without being affected by the Land Restriction and Alienation Act.

Local and foreign investors as well as entrepreneurs will be encouraged to expand their businesses clearing impediments in obtaining land and buildings under the government’s mid-term economic plan.Restrictions on foreigners, companies and locally incorporated firms with over 50 per cent foreign ownership from buying land in the country will be removed.

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(Source: Sunday Times)

Prime Minister to propose scrapping ‘expropriation’ laws

Prime Minister Ranil Wickremesinghe is to propose scrapping controversial expropriation laws and some changes to land ownership laws during a special statement in Parliament on Thursday on the Government’s mid-term strategy.

The source added that when the government moves to acquire private property, bad signals go out. “The reasons may be justified, but the very intention of using state power to deprive legitimate owners of their property encourages and activates the worst elements. And this will not attract FDI.” Similarly, he said the Land (Restrictions on Alienation) Act restricting land ownership by foreigners, foreign companies and companies registered in Sri Lanka also deter FDI.

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(Source: Sunday Times)

Biz community renews calls for revised Land Act

Sri Lanka’s business community renewed their calls to revisit the controversial Land Act enacted by the former regime limiting foreigners and foreign-owned corporates to outright owning lands, as it acts as a major deterrent to lure the much-needed foreign direct investments (FDIs). 

“We are of the view that the ambiguity inherent in the Act and the uncertainty it creates as a result will be deterrents to capital formation and foreign direct investment in Sri Lanka and therefore, require urgent review,” John Keells Holdings PLC (JKH) Chairman Susantha Ratnayake said in his annual review. 

The Land (Restrictions on Alienation) Act was passed in Parliament last October limiting the purchase of land by foreigners and entities with over 50 percent of foreign ownership with retrospective effect from January 1, 2013. 

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(Source: Daily Mirror)

Restrictions on land alienation to foreigners

President Mahinda Rajapaksa today instructed the Cabinet to enact the proposed bill restricting land alienation to foreigners as soon as possible, informed sources said.

The Government will present this Bill titled, ‘Land (Restrictions on Alienation)’ to Parliament and if enacted it will restrict the alienation of lands in Sri Lanka to foreigners, foreign companies and institutions with foreign shareholding.

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(Source: Daily Mirror)

New Land Bill: Is it a ‘no – investment’ in Sri Lanka

The Land (Restrictions on Alienation) Bill which was recently placed before parliament for debate appears to have gone beyond its initial mandate and intentions.

It will be recalled that President Mahinda Rajapaksa, proposed, during his Budget Speech in November 2011, that “foreigners” will not be allowed to purchase state land on a freehold basis. This was administratively widened, subsequently, to include both, state and privately owned land. It is the general view that the widening was aimed, primarily, at creating an “affordable” playing field to Sri Lankan nationals wishing to purchase residential property.

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(Source: Sunday Times)

Land lease to foreigners face restrictions

Parliament will take up for debate the Land (Restrictions on Alienation) Bill next week. The Bill that was presented to Parliament land Tuesday stipulates retractions on the alienation of lands in Sri Lanka to foreigners, foreign companies and certain institutions with foreign shareholding. It also specifies instances where exemptions can be granted in this connection and makes provision to impose a land lease tax for leasing of lands to foreigners and foreign companies.

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(Source: Sunday Times)

New land restriction laws for foreigners jolt Lankan companies

Sri Lankan companies have been thrown into disarray and confusion over a new Land (Restrictions on Alienation) Bill presented in parliament this week which affects land and property if foreign shareholding in a company exceeds the 50 per cent limit.Several company heads told the Business Times that they were shocked after they came to learn about the ramifications of Section 2 (2)(b) of the bill which states that foreign ownership should not exceed 50 per cent for a consecutive period of 20 years from the date of transfer of land. Under the proposed law, all transactions after January 2013 – the effective date – will be affected.

In the event, the foreign ownership exceeds 50 per cent during this period the company stands to be deprived of the title to the land from date of shareholding crossing the 50 per cent foreign ownership. 

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(Source: Sunday Times)

New law on land ownership by foreigners

The government today introduced a new Bill in Parliament that if passed would stipulate restrictions on the alienation of lands to foreigners, foreign companies, or companies registered here with 50 per cent of foreign shareholding.

The Bill titled: 'Land (Restrictions on Alienation)' will be taken up for debate later and passed as an Act soon.

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(Source: Daily Mirror)

Land-transfer ban to be eased

Non-citizen children of Sri Lankans or non-citizen next of kin can inherit property

New laws prohibiting the transfer of land to foreigners will allow non-citizen children or non-citizen next of kin of Sri Lankans to inherit property through intestacy or gift, a Cabinet paper exclusively obtained by the Sunday Times states. In 2013, the Finance Ministry issued instructions barring all transfers of land to foreigners and throwing a cloud of uncertainty over inheritance rights. While the law allowed individuals to transfer property by gift or testamentary disposition to their heirs, the Ministry directive forbade it.

The new law envisages a reduced land lease tax of 7.5 per cent for certain categories of companies.

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(Source: Sunday Times)

Draft laws to ban foreign ownership of land

New legislation is being drafted to strictly enforce rules pertaining to the 2013 ban on foreigners owning land, which is now being enforced through administrative circulars.

Top government sources said that proposed laws are to be promulgated to tighten loopholes in the administrative process of enforcement .

In the 2013 budget (presented in November 2012), the President proclaimed that foreign nationals and companies would be completely prohibited from owning freehold land in Sri Lanka. Until that time, foreigners were able to purchase land upon the payment of a 100 per cent transfer tax, which many were circumventing through ingenious methods of purchasing the land through a majority Sri Lankan nominee owned companies and later purchasing 100 per cent of the shares, the sources said.

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(Source: Sunday Times)

Sri Lanka allows foreigners to buy land

The government is bringing in sweeping changes to recent restrictions imposed on foreign ownership of businesses and property to promote foreign investments, government officials said.

The Finance Ministry will issue a circular indicating these changes following the Treasury Secretary Dr. P.B. Jayasundera’s endorsement of these decisions, reversing a budget decision.

In a 180-degree turn from the recent decision and subsequent action to prohibit foreign ownership of business and property in Sri Lanka under the 2013 budget proposal, the government will revert to the earlier practice of allowing foreigners to take up full ownership of businesses and property, if their investments in the project is over US $10 million, they revealed.

Earlier – before the budget proposal – a foreigner or a foreign company was entitled to buy land without paying 100 per cent land tax if their investment for the whole project was over US$10 million

Sri Lanka’s new regulation on foreign ownership of property is similar to the previous practice which was in existence before the year 2004.

However it will have additional, new provisions where foreigners can lease land but would be subject to a land tax of 5 to 10 per cent, Minister for Investment Promotion Lakshman Yapa Abeywardana told the Business TimesThis is a new provision since there was no tax on lands leased by foreigners, earlier.

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(Source: Sunday Times)

Sri Lanka to set tax of around 10-pct for foreigners leasing land

 Sri Lanka's new restrictions on foreign ownership of property will have provisions that will allow non-nationals investing in the country to lease land with a tax of 5 to 15 percent, senior government officials said.

Investment promotion minister Lakshman Yapa Abeywardena said it was the policy of the administration to stop the sale of land outright to foreigners but foreign investors will be allowed to lease land for up to 99 years, after paying a tax.

"We will allow foreigners to lease land and we have requested that the tax be kept below 10 percent," minister Abeywardena said.

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(Source: LBO)

Jolt for Sri Lanka’s condo market

New rule bars foreigners from owning private land

Sri Lanka’s expanding condominium (condo) market has been thrown into disarray and confusion following new rules barring the sale of private land to foreigners, industry officials say.

The rule, based on an announcement in the Budget 2013 by President Mahinda Rajapaksa, comes in the backdrop of concern that prime properties bought by foreigners are rapidly depleted the land resources. Chairman of the state-owned Condominium Authority Kapila Gamage conceded that there is confusion at the moment with regard to the sale of condos as a result of a letter sent by the Treasury to the Commissioner General of Lands directing him not to registrar land deed transfers including condominiums of foreigners with effect from January 1st in accordance with the budget proposal.

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(Source: Sunday Times)

BUDGET 2013: SELLING LAND TO FOREIGNERS TO BE COMPLETELY PROHIBITED

Selling land to foreigners will be completely prohibited from 2013 but will be granted on a lease system, the President proposed a short while ago in his budget speech.

Furthermore, it was proposed that land leased to foreigners will be taxed by 100%.

Sri Lanka Repeals 100% Land Tax on Foreigners

The Sri Lankan government is scrapping the 100 percent tax levied on foreigners buying land in that country in favor of a new special land tax to be unveiled in the 2012 budget.

The new tax will remove restrictions on foreigners buying and developing land anywhere in the country, and will also close loopholes which have allowed many foreigners to buy land in Sri Lanka tax free. It is also thought that removing the tax will increase tourism and property sales to foreigners. The overall aim of the decision is to increase the revenues coming into government coffers from the sale of land to foreigners, sources from the Finance Ministry told reporters.

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(Source: The Epoch Times)

100% land sale tax for foreigners to be scrapped

Sri Lanka will scrap the 100% tax on foreigners buying land, to promote foreign investment and tourism. The Government instead plans to introduce a special land tax in the 2012 budget removing existing barriers in the sale of land to foreigners and foreign companies to develop land in any part of the country. This will bring more revenue to government coffers, Finance Ministry sources said. The new land tax, the amount of which is yet to be finalised, is aimed at preventing the sale of land at inflated prices to foreign buyers, making huge profits completely tax free and thereby cheating the government of revenue while also breaking immigration laws. Whenever there’s a prohibitive tax in place, foreign investors find a way around it and Sri Lanka is no exception, a senior official of the Finance Ministry, said More>>  (Source: Sunday Times)

Sale and no more land leases for foreigners

Legislation is being introduced to remove existing legal impediments in the sale of land to foreigners and foreign companies to develop state land in major towns occupied by people illegally. These people are now being evicted, government officials said. The current system of levying a 100% tax on land transfers to foreigners will be removed by introducing a special land tax in order to prevent the sale of land at inflated prices to foreign buyers, making huge profits completely tax free and thereby cheating the government of revenue while also breaking immigration laws.  Under the present system, a foreigner or a foreign company can buy tax-free land if their investment for the whole project is over US$10 million. Foreigners are now allowed to own land in Sri Lanka with some restrictions. The purpose of this 100% tax is to discourage foreigners acquiring properties in Sri Lanka. However a joint venture company incorporated in Sri Lanka (with foreign participation) is not liable to pay that tax. Furthermore the condominium units of residential or non-residential accommodation on or above the 6th floor of a registered condominium apartment constructed with the approval of the UDA are exempt from such 100% tax, the Finance Ministry official said. More>> (Source: Sunday Times)