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Property in Sri Lanka

Galle, Bentota, Mirissa, Weligama — tropical Indian Ocean, leasehold 99 years + condo freehold

from $80,000Starting price
6-10% long-term expatYield

Ownership: Leasehold 99 years on land/villa; FREEHOLD on condominium units (any floor)

Sri Lanka — Galle, Mirissa, Bentota

Market

Property market in Sri Lanka

Sri Lanka is a tropical island in the Indian Ocean, the leading "pearl" resort cluster for the Russian-speaking audience after the economic recovery of 2024-2026. The south coast (Galle → Bentota → Hikkaduwa → Weligama → Mirissa → Tangalle) is the main international lifestyle corridor: the colonial Galle Fort (UNESCO), white-sand beaches, whales off Mirissa, surfing at Weligama. Land purchase by foreigners has been prohibited since 2013: only leasehold of 99 years (with the right of transfer and inheritance) or a scheme through a Sri Lankan LLC (51% local, 49% foreigner) is available. BUT condominium units on any floor are FREEHOLD without restrictions (2018 amendment). Port City Colombo is a SOFA special zone with relaxations for foreign investors. Prices range from $80K for a condo to $5M+ for heritage villas in Galle Fort.

  • Direct freehold on land has been prohibited for foreigners since 2013(Land (Restrictions on Alienation) Act 2014)
  • FREEHOLD on condominium units on floor 4+ — without restrictions since 2018(Amendments 2018)
  • 100% Land Tax on foreign individuals — effectively doubles the price of land(Land Tax Act)
  • Investor Visa: $200K → 10 years, $150K → 5 years, $75K (suburb) → 5 years(BOI Sri Lanka)
  • Talpe Heights Galle through a management company promises 13-20% per annum(Lanka Planet)
  • Land lease (without purchase): Galle ~$350/mo, Mirissa ~$200/mo(Mavato, 2026)

Prices

Price per m² by city and district — Sri Lanka

LocationPrice per m²Comment
Colombo (Cinnamon Gardens)$2 500–4 500premium urban
Colombo (Port City — SOFA)$3 500–6 000special zone with relaxations
Galle (Galle Fort, UNESCO)$3 000–5 500heritage villas, premium audience
Galle (2-bedroom condo)from $100-200K per unit$35-40K per lot in an economy complex (Mavato, 2026)
Bentota$1 500–2 800classic beach, villas from $150K
Mirissa / Weligama$1 500–2 800boutique surf + whales, lifestyle audience

Ownership

Ownership for foreigners in Sri Lanka

Direct freehold on land has been prohibited for foreigners since 2013. Available forms: leasehold 99 years (the standard for a villa and plot), purchase through a Sri Lankan LLC with a 51% local founder, or FREEHOLD on a condominium unit on floor 4+ (2018 amendment). Port City Colombo (SOFA zone) — a separate regime with relaxations for foreign investors.

  • Land for a foreign individual — only leasehold 99 years or through an LLC (51% local)
  • Freehold on units — only in condominiums from the 4th floor and above
  • 100% Land Tax on direct purchase of land by a foreigner (effectively doubles the price)
  • Port City Colombo — SOFA zone with a special regime

Source: Land (Restrictions on Alienation) Act 2014, amendments 2018

Taxes

Taxes on purchase and ownership in Sri Lanka

TaxRateWhen paid
100% Land Tax100%one-time; not levied on condos floor 4+ (Land Tax Act)
Stamp duty3-4%one-time at the transaction (Stamp Duty Act)
Notary1-2%one-time (Bar Council)
Rental income tax (non-resident)14%on gross income (IRD Sri Lanka)
Capital gains10%on sale (IRD)

Residency

Residency through property purchase in Sri Lanka

$75K – $200K in a condominiumMinimum investment
2-4 monthsProcessing time

Investor Visa: $200K in an urban condominium → 10 years, $150K → 5 years, $75K in a suburban one → 5 years. All require a purchase on floor 4+ for FREEHOLD without land tax. Covers spouse and children. Does not grant the right to work — residence only. Resident Guest Scheme — an alternative through a $250K deposit in a local bank.

Source: BOI Sri Lanka, Investment Law

Rental yield

Rental yield by city in Sri Lanka

CityTypeGrossNet
Galle (Galle Fort)Premium seasonal Airbnb8–12%5–8%
BentotaSeasonal beach6–10%4–6%
Mirissa / WeligamaBoutique Airbnb10–15%6–10%
ColomboUrban long-term6–9%4–6%

FAQ

Frequently asked questions about buying property in Sri Lanka

Can a foreigner buy property in Sri Lanka?

Land — NO (banned since 2013). Available: 1) Leasehold 99 years with the right to transfer lease rights and bequeath to heirs — the standard scheme for a villa or plot; 2) Purchase through a Sri Lankan LLC (requires a Sri Lankan co-owner with 51% of shares); 3) FREEHOLD on condominium units on any floor (amendment to the Land Restrictions on Aliens Act, 2018); 4) Port City Colombo (SOFA zone) — a separate regulatory regime with relaxations.

What taxes apply to foreigners in Sri Lanka?

Land Tax on foreign individuals — 100% of the land value (effectively doubling the price of the plot) — which is why leasehold or the LLC scheme is used. Through an LLC — ~7% of the value. There is no tax on condominium units (freehold). Stamp duty 3-4%, notary 1-2%. Rental income tax — 14% (for non-residents). Capital gain — 10% on sale. Citizenship by investment is not available.

Galle, Bentota or Mirissa?

Galle — premium heritage cluster ($300K-$5M+), the colonial Galle Fort (UNESCO), Aman Galle, Cape Weligama. Audience — Europeans, Indian HNWI. Bentota — a classic beach resort ($150K-$1M), colonial villas, a calm family audience, golf. Mirissa — boutique surf + whales ($80K-$500K), a young international audience, small condo projects. For premium and liquidity — Galle; for a classic beach — Bentota; for lifestyle and Airbnb yield — Mirissa/Weligama.

What rental yield can you get in Sri Lanka?

6-10% long-term rental to the expat audience (Colombo, Galle). 10-15% gross Airbnb on the southern beaches in high season (December-April — dry). Peak occupancy 85-95%, low season (May-October — the southwest monsoon) gives 30-50%. Premium villas Cape Weligama, Anantara Tangalle — at $500-2000/night in peak. Talpe Heights Galle promises 13-20% per annum through a management company.

What are the risks in Sri Lanka?

The main ones: 1) Currency instability — the LKR rupee devalued by 80% in 2022-2023, stabilizing in 2024-2026; 2) The southwest monsoon May-October reduces Airbnb yield; 3) Changeable legislation on foreign ownership (the leasehold foundation since 2013, freehold on condos since 2018 — new amendments are possible); 4) No citizenship program — only a residence permit through the Resident Guest Scheme from a $250K deposit. Protection — choosing a condo in the FREEHOLD segment and projects with an international reputation (Aman, Anantara, Resplendent Ceylon).

What types of visas are available when buying a condominium?

Investor Visa: $200K in an urban condominium → 10-year visa. $150K → 5-year. $75K in a suburban condominium → 5-year. All require a purchase on floor 4+ for FREEHOLD without the 100% land tax. Covers spouse and children. Does not grant the right to work — residence only.

What is the 100% Land Tax and how do you avoid it?

If a foreign individual buys land/a villa/a townhouse in their own name, they are obliged to pay 100% Land Tax on the land value (effectively doubling the price). It is not levied on: condominium units on floor 4+ (FREEHOLD without land tax), leasehold of 99 years, purchase through a Sri Lankan LLC with a 51% local founder, Port City Colombo (SOFA zone).

Other destinations

Explore other markets

UAEfrom $200,000Thailandfrom $80,000Omanfrom $180,000Turkeyfrom $80,000Cyprusfrom €200,000Greecefrom €150,000Indonesia (Bali)from $180,000Georgiafrom $40,000Vietnamfrom $50,000Montenegrofrom €100,000Serbiafrom €80,000 (~8.8M ₽)Mexicofrom $120,000Armeniafrom $80,000Bahrainfrom $200,000Saudi Arabiafrom $300,000Kuwaitunavailable for non-GCCPhilippinesfrom $50,000Malaysiafrom $150,000Dominican Republicfrom $150,000Mauritiusfrom $300,000 (PDS entry), from $375,000 (residence permit)Seychellesfrom $500,000 (Eden Island apartments)Cambodiafrom $40,000 (~4M ₽)Cabo Verdefrom €50,000 (~5.5M ₽)

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