How to Buy a Home in Sri Lanka

Buying a home in Sri Lanka as an expat can be a rewarding investment, offering a chance to own a piece of this beautiful island nation. However, the process can be complex and requires a good understanding of the local real estate market, legal requirements, and cultural nuances. This guide aims to provide a comprehensive overview of the key aspects to consider when buying a home in Sri Lanka as an expat.

How do I find houses for sale in Sri Lanka?

There are several ways to find houses for sale in Sri Lanka. Online property portals such as LankaPropertyWeb, Lamudi, and Ikman are popular platforms where properties are listed for sale. Local newspapers also have property listings. Hiring a local real estate agent can be beneficial as they have extensive knowledge of the market and can help navigate the buying process. It's also common to find properties through word-of-mouth recommendations.

Are there restrictions on foreigners owning property in Sri Lanka?

Yes, there are restrictions on foreigners owning property in Sri Lanka. According to the Land (Restrictions on Alienation) Act, foreigners are not allowed to own freehold land. However, they can lease land for up to 99 years or buy apartments on or above the fourth floor of a condominium. To legally get around these restrictions, some foreigners form a company in Sri Lanka, which can then purchase and own land.

Does Sri Lanka have an MLS type system?

Sri Lanka does not have a Multiple Listing Service (MLS) like in the United States. Property listings are typically managed by individual real estate agents or agencies, and there is no centralized database. Therefore, it's important to work with a reputable agent or use reliable online platforms to find properties.

Do brokers have licenses and how do I know if they are licensed?

Yes, real estate brokers in Sri Lanka are required to have a license issued by the Sri Lanka Real Estate Professional Association (SLREPA). To verify if a broker is licensed, you can ask to see their license or check with the SLREPA.

What documents are required when buying a home?

When buying a home in Sri Lanka, you will need several documents. These include a copy of the seller's deed, a certificate of ownership, a street line certificate, a non-vesting certificate, and a certificate of conformity. You will also need a clearance certificate from the local municipality and a tax clearance. It's crucial to ensure all documents are in order and legally valid.

Do I need a lawyer when buying a home in Sri Lanka?

Yes, it's highly recommended to hire a lawyer when buying a home in Sri Lanka. A lawyer will conduct a thorough title search, ensure all documents are in order, and handle the legal aspects of the transaction. The cost of a lawyer can vary, but it's typically around 1% of the property value.

Do people typically buy a property with all cash or take out a mortgage?

Both options are common in Sri Lanka. Some people prefer to buy property outright with cash, while others take out a mortgage. Several banks offer mortgage loans to foreigners, but the terms and conditions can vary. It's important to thoroughly research and compare different mortgage options.

Are there inspections that take place, and if so what is that process like?

Yes, property inspections are a common part of the home buying process in Sri Lanka. A professional surveyor will assess the property's condition and provide a report. This can help identify any potential issues with the property and can be used in price negotiations.

What are some of the pitfalls to avoid when buying property in Sri Lanka?

One of the main pitfalls to avoid is not conducting a thorough title search. This can lead to legal issues down the line. It's also important to be aware of the restrictions on foreign property ownership and to ensure all documents are in order. Additionally, be cautious of unlicensed brokers and always verify their credentials. Lastly, consider potential cultural and language barriers and seek local assistance if needed.