Investing in Central Province: Yields, Appreciation & Ownership
Who can buy, how ownership works, and the taxes and duties for buying property in Central Province.
Who can buy in Central Province
Foreign ownership is governed by the Land (Restrictions on Alienation) Act No. 38 of 2014, consolidated with amendments through 2024. Foreign individuals and majority foreign owned companies cannot acquire freehold land in their own name. You can own condominium units, typically those on the fourth floor and above under the Apartment Ownership Law, and you can lease land for up to 99 years. A common workaround is a Sri Lankan company with majority local shareholding to hold freehold title.
| Buyer | Permitted | Tenure | Conditions |
|---|---|---|---|
| Resident citizen | Yes | Freehold | No restriction on residential land or condominiums |
| Foreign national | Conditional | Leasehold or condominium freehold | Condo units on the fourth floor and above; land lease up to 99 years |
| Foreign owned company | Conditional | Freehold via local majority structure | Sri Lankan trustee or local shareholders must hold at least 51 percentApproval: Board of Investment for incentive cases |
Sri Lanka rule, applies in Central Province.
Stamp duty and registration in Sri Lanka
Sri Lankan buyers pay stamp duty of 3 percent on the first 100,000 rupees and 4 percent above that, set by the provincial council where the land sits. Add notary fees, deed registration, and a small Land Registry charge. Budget about 5 to 7 percent of the price for total transaction costs on a typical residential purchase.
| Property value | Stamp duty | Registration |
|---|---|---|
| First 100,000 rupees of consideration | 3 percent | Notary and Land Registry fees, roughly 1 to 2 percent of price |
| Value above 100,000 rupees | 4 percent | Notary and Land Registry fees, roughly 1 to 2 percent of price |
| Foreigner buying a condominium unit | 4 percent on price | Plus condominium management transfer fees |
Sri Lanka rule, applies in Central Province.
Capital gains on a sale
Sri Lanka taxes individual capital gains on property at a flat 15 percent from April 2025, up from 10 percent. Sell within five years and the gain is fully taxable. Beyond five years, residents pay 10 percent and non residents 5 percent. Your principal residence held two plus years is exempt, and annual gains below 600,000 rupees fall under threshold.
| Holding period | Classification | Tax rate | Indexation |
|---|---|---|---|
| Up to 5 years | Short term | 15 percent flat for individuals | No, cost base only |
| More than 5 years, resident | Long term | 10 percent on the gain | No |
| More than 5 years, non resident | Long term | 5 percent on the gain | No |
| Principal residence, lived in 2 plus years | Exempt | 0 percent | NA, exempt |
Sri Lanka rule, applies in Central Province.
Laws change. Always consult a licensed real estate attorney before purchasing. Consult a qualified chartered accountant for advice specific to your tax profile. Rules change; verify with a professional before you transact.
Frequently asked questions about Central Province
With conditions. Condo units on the fourth floor and above; land lease up to 99 years
Buying or selling in Central Province?
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