Foreigners can purchase apartments starting from the 4th floor and above (excluding the common area floors). The Dynasty Residence apartments start at the 5th floor (Ground floor to the 4th floor are considered as common areas) therefore foreigners can buy apartments starting from the 8th floor and above (as per Land (Restriction on Alienation) Act, No. 38 of 2014).
-Download the summarized explanation of the Land (Restriction on Alienation) Act, No. 38 of 2014:
-Download Full Version of the Land (Restriction on Alienation) Act, No. 38 of 2014:
-Information about the Residential Visa Regulations for foreigners and for foreign passport holders:
Click HereAt the time of signing Sales and Purchase agreement, the buyer should seek services of any local law consultancy firm in order to get the title clearance and any other legal advices pertaining to the particular condominium unit. Recommendations on reputed local law consultancy firms can be provided upon request of the customer. In the event if the buyer is unable to present at the time of signing Sales and Purchase agreement, he/she could give the power of attorney to a third party behalf of him.
Currencies such as US Dollars (USD), British Pounds (GBP) and Lankan Rupees (LKR) will be accepted. However when a foreigner is making payments for purchasing a condominium unit, he/she has to transfer the funds to Sri Lanka through a Securities Investment Account (SIA) opened in a Sri Lankan Bank in order to facilitate him/her to take the funds back to his/her country in case he/she sells the condominium unit.
The expenses would be (a) rates charged by the Kandy Municipal Council (could be paid monthly, quarterly or annually). Upfront payments quarterly or annually attracts discounts of 5% and 10% respectively. (b) Each apartment owner also has to contribute monthly for (i) maintenance and (ii) to Sinking Fund (amount to be worked out initially by the Developer and charges during the maintenance period of one year and thereafter by the Management Committee of the Apartment Complex).
Both Residents and Non-Residents are liable for income tax on the profit arising from rental income. The profit is worked out as (i) Gross Rent (ii) less Rates (iii) less 25% repairs/maintenance allowances on the total of Gross Rent less Rates. The resultant profit is taxed as follows;
On the 1st 500,000 |
at 4% |
On the next 500,000 |
at 8% |
On the next 500,000 |
at 12% |
On the next 500,000 |
at 16% |
On the next 500,000 |
at 20% |
On the Balance |
at 24% |
A Sri Lankan National is entitled to a further annual tax free allowance of Rs 500,000/=.
To work out the tax liability this rent income should be aggregated with;
(i) his/her world income in the case of a resident
(ii) his/her other income derived in Sri Lanka in the case of non-resident
In the case of a Company, the profit is worked out as (i) Gross Rent (ii) less actual expenses with repairs expenses restricted 25% of Gross Rent. The resultant profit is taxed at 12% if the total turnover of the Company is less than Rs.750 Million and 28% if over this amount.
When a non-resident company remits the profit, an additional 10% of remittance tax has to be paid.
A resident or non-resident who sells an apartment later is not liable for income tax or any other tax as there is no capital gains tax in Sri Lanka. A resident or non-resident company which sells an apartment later is also not liable for income tax.
There are provisions for the lease of Apartments by Foreigners.