Govt. relaxes property restrictions on foreigners and companies

The Government yesterday in its 2017 Budget announced several measures at relaxing restrictions placed on property and land with regard to foreigners and majority foreign-owned companies.

Noting that the condominium industry was a growing sector in the country with significant potential for foreign investment, Finance Minister Ravi Karunanayake said that to further incentivise such investment, the Government would remove freehold right restrictions from the ground floor. 

“We will also allow foreigners who will be purchasing condominiums to raise 40% of the cost from a domestic bank. However, such debt servicing should be in foreign currency,” he added.

The Finance Minister also said the Government would introduce laws which give Public Limited Companies freehold right of land. “I also propose that private companies with majority foreign holdings be allowed to lease land on a long-term basis.” 

However, such companies should have invested at least Rs. 250 million excluding the value of land providing employment to at least 150 people, and have maintained this status quo for at least three years. If the conditions are not fulfilled after three years, 100% of the lease will have to be paid up front. Such lease payment will be based on the market value of the land as determined by the Government valuer.

In a bid to encourage more foreign exchange inflows, Karunanayake also said individuals will be allowed to bring up to $ 45,000 into the country without declaring the source, up from a previous limit of $ 15,000.