Buying in Sri Lanka

Old Aug 26th 2010, 4:49 am
  #1  
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Default Buying in Sri Lanka

Due to the 2 month out rule in India, I'm looking into buying in Sri Lanka.
Is there anyone out there who has bought in Sri Lanka after the 100% tax was imposed on non-Sri Lankans.
I'm told there are a few ways to buy:
1. Set up a company and under tourism you own 100% shares then your company buys the property.

2. Find a TRUSTworthy person in Sri Lanka buy it in there name and lease it from them for 99 years.

2. Keep the name in the previous owner and then do the 99 year lease, the lawyers word it so they cannot have any claims on it.

4. The agent buys it under there company name and then you lease it for 99 years. The lawyers word it so they cannot have ant claims on it.

5. Buy the free hold and pay the 100 % + tax.

After all the goal posts were moved in India for buying property I'm worried about the company route, also the 99 year lease route too.

Any ideas/experience on a safe buy.

Thanks for any info.
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Old Aug 26th 2010, 5:03 am
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Default Re: Buying in Sri Lanka

The process you describe cold apply in any country where foreigners are not allowed to own property.

What you are proposing is madness - no -one would advise you to take step 1 - and thre is no way that step 2 can be enforced!

Just rent and come and go betwen India and Sri Lanka!
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Old Aug 26th 2010, 7:06 am
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Default Re: Buying in Sri Lanka

Originally Posted by Bijilo123
The process you describe cold apply in any country where foreigners are not allowed to own property.

What you are proposing is madness - no -one would advise you to take step 1 - and thre is no way that step 2 can be enforced!

Just rent and come and go betwen India and Sri Lanka!
These are the routes that are being offered to foreigners and loads are buying in the Galle area and all over this way.
I'm just not sure about this, after India just changed the rules to the non Indian.
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Old Aug 26th 2010, 9:08 am
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Default Re: Buying in Sri Lanka

Get a lease its much simpler in the end.Then rent it to other people caught in the same visa trap as your self.Make it self financing.I know the Sri Lankan Government have simplified the rules, but its a very pricy option to own direct in Lanka.You have to have a considerable amount on money coming in to obtain the necessary residence visa. There is a thread somewhere in Britexpats on this subject.Hope this helps.
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Old Aug 26th 2010, 9:56 am
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Default Re: Buying in Sri Lanka

Originally Posted by prestonjohn
Get a lease its much simpler in the end.Then rent it to other people caught in the same visa trap as your self.Make it self financing.I know the Sri Lankan Government have simplified the rules, but its a very pricy option to own direct in Lanka.You have to have a considerable amount on money coming in to obtain the necessary residence visa. There is a thread somewhere in Britexpats on this subject.Hope this helps.
Get a lease, whats that a 99 year one to buy or very short term?
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Old Aug 26th 2010, 2:06 pm
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Default Re: Buying in Sri Lanka

whats the visa situation like in sri lanka? is it easy to stay forever?
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Old Aug 26th 2010, 4:49 pm
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Default Re: Buying in Sri Lanka

The vias situation is that you get a i month on landing then you can get an extension quite easily . But not forever, maybe a 3 months depending on your circumstances.As for the leases the laws that govern them are basicaly the same as India. 5 year or 20- year....Have a look for the earlier thread on this because that covers most of what your looking for.
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Old Aug 26th 2010, 11:34 pm
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Default Re: Buying in Sri Lanka

Originally Posted by cbc
Due to the 2 month out rule in India, I'm looking into buying in Sri Lanka.
Is there anyone out there who has bought in Sri Lanka after the 100% tax was imposed on non-Sri Lankans.
I'm told there are a few ways to buy:
1. Set up a company and under tourism you own 100% shares then your company buys the property.

2. Find a TRUSTworthy person in Sri Lanka buy it in there name and lease it from them for 99 years.

2. Keep the name in the previous owner and then do the 99 year lease, the lawyers word it so they cannot have any claims on it.

4. The agent buys it under there company name and then you lease it for 99 years. The lawyers word it so they cannot have ant claims on it.

5. Buy the free hold and pay the 100 % + tax.

After all the goal posts were moved in India for buying property I'm worried about the company route, also the 99 year lease route too.

Any ideas/experience on a safe buy.

Thanks for any info.

In my opinion none of these routes seems safe. These were all tried and tested in Goa over the years, and resulted in plenty of people losing out and/or finding themselves in dire straits. The Govt of India welcomed people buying at one point, and then changed the rules. The locals were more than happy to sell, but now complain about property prices ! My advise would be to lease. Sri Lanka has only just started to recover and become a tourist magnet, but what happens when foreign buying pushes the price of real estate up ? Will the locals and govt be so obliging then? !!!
And never ever put your property in anyone elses name - because it will never be yours and despite any supposed document, it may be found null and void if challenged in court as it probably breaches the rules.

As someone in the legal profession, I would say that you would be open to potential problems if you do anything other than go freehold, and even then you risk a changing of the rules.

I have posted this not to be negative, but purely in order to make you think seriously and look at all the potential loopholes and pitfalls before you commit your hard earned money. If you want me to explain this more fully please pm me and I will give you a more in depth explanation.

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Old Aug 27th 2010, 12:54 am
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Default Re: Buying in Sri Lanka

Originally Posted by dreadsoc
In my opinion none of these routes seems safe. These were all tried and tested in Goa over the years, and resulted in plenty of people losing out and/or finding themselves in dire straits. The Govt of India welcomed people buying at one point, and then changed the rules. The locals were more than happy to sell, but now complain about property prices ! My advise would be to lease. Sri Lanka has only just started to recover and become a tourist magnet, but what happens when foreign buying pushes the price of real estate up ? Will the locals and govt be so obliging then? !!!
And never ever put your property in anyone elses name - because it will never be yours and despite any supposed document, it may be found null and void if challenged in court as it probably breaches the rules.

As someone in the legal profession, I would say that you would be open to potential problems if you do anything other than go freehold, and even then you risk a changing of the rules.

I have posted this not to be negative, but purely in order to make you think seriously and look at all the potential loopholes and pitfalls before you commit your hard earned money. If you want me to explain this more fully please pm me and I will give you a more in depth explanation.

Dread - caution
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Thanks for all your advise, I just can,t get my head around how many people have bought out there and are buying on theses terms and are not worried.
The places are lovely out there and the agents really reassure you that theses methods of buying are completely safe, I've even said about India changing the rules and they say that's India, Sri Lanka like tourists and like them buying property it boosts the area in every way!
I really want to get in touch with anyone who has bought out there but they don't seem to have any sites loke this one.
Any ideas?
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Old Aug 27th 2010, 3:26 am
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Default Re: Buying in Sri Lanka

Originally Posted by prestonjohn
The vias situation is that you get a i month on landing then you can get an extension quite easily . But not forever, maybe a 3 months depending on your circumstances.As for the leases the laws that govern them are basicaly the same as India. 5 year or 20- year....Have a look for the earlier thread on this because that covers most of what your looking for.
I heard of someone who "bought" a renewable Resident visa for SL75000/-.

I'd be wary of "buying". Rentals are still cheap.
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Old Aug 27th 2010, 3:44 am
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Default Re: Buying in Sri Lanka

Originally Posted by cbc
Thanks for all your advise, I just can,t get my head around how many people have bought out there and are buying on theses terms and are not worried.
The places are lovely out there and the agents really reassure you that theses methods of buying are completely safe, I've even said about India changing the rules and they say that's India, Sri Lanka like tourists and like them buying property it boosts the area in every way!
I really want to get in touch with anyone who has bought out there but they don't seem to have any sites loke this one.
Any ideas?
Hi Cbc

I can't offer advice on where to find someone who has bought in Sri Lanka, but I do recall all the assurances people were given in Goa by agents, lawyers, developers and accountants, and all of those assurances turned out to be false and worthless. In fact friends of mine were even given advice re buying their property by the HCI in London, which also turned out to be bad advice. Remember the Goans liked tourists and wanted people to buy property once - look at things now.
Reading the suggestions above regarding buying in someone elses name, then having a 99 year lease, you need to be very cautious here. Any 'owner' can revoke a lease at any time if they can show reason, and reasons can be the smallest of things like claiming that you have been bad tenants and citing petty facts which are difficult to prove or disprove. This is so whatever legal document you have, because the 'owner' will always have the higher rights.

Greed is prevalent the world over and if some Sri Lankan person sees a way of getting his/her own house at your expense, can you absolutley guarantee that they would not take the opportunity? I know there are many genuine people out there, but how would you know which one is genuine and which one would con you? I would strongly advise that you do not choose this route, despite what other people tell you. I do sense that you are already a bit doubtful of these methods - remember you feel that way for a reason so don't dismiss your intuition.

My advice to you is to actually find the laws regarding visas and status in Sri Lanka, together with the written law on property buying, and the banking laws on foriegn exchange. That is the only way you will know what is safe and what is not. If you find that law and want it interpreted please send to me and I will do so for you.

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Old Aug 27th 2010, 11:56 am
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Default Re: Buying in Sri Lanka

Originally Posted by dreadsoc
Hi Cbc

I can't offer advice on where to find someone who has bought in Sri Lanka, but I do recall all the assurances people were given in Goa by agents, lawyers, developers and accountants, and all of those assurances turned out to be false and worthless. In fact friends of mine were even given advice re buying their property by the HCI in London, which also turned out to be bad advice. Remember the Goans liked tourists and wanted people to buy property once - look at things now.
Reading the suggestions above regarding buying in someone elses name, then having a 99 year lease, you need to be very cautious here. Any 'owner' can revoke a lease at any time if they can show reason, and reasons can be the smallest of things like claiming that you have been bad tenants and citing petty facts which are difficult to prove or disprove. This is so whatever legal document you have, because the 'owner' will always have the higher rights.

Greed is prevalent the world over and if some Sri Lankan person sees a way of getting his/her own house at your expense, can you absolutley guarantee that they would not take the opportunity? I know there are many genuine people out there, but how would you know which one is genuine and which one would con you? I would strongly advise that you do not choose this route, despite what other people tell you. I do sense that you are already a bit doubtful of these methods - remember you feel that way for a reason so don't dismiss your intuition.

My advice to you is to actually find the laws regarding visas and status in Sri Lanka, together with the written law on property buying, and the banking laws on foriegn exchange. That is the only way you will know what is safe and what is not. If you find that law and want it interpreted please send to me and I will do so for you.

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Like you Dread - once bitten twice shy, I would definately
rent, and not purchase anywhere in the world except in the UK.
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Old Aug 27th 2010, 4:05 pm
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Default Re: Buying in Sri Lanka

Originally Posted by noni
Like you Dread - once bitten twice shy, I would definately
rent, and not purchase anywhere in the world except in the UK.
Thanks again for the info:
Yes I do have a bad gut feeling about these 99 yr leases, but the agents say the 100% + tax on non-Sri Lankan is so crazy that lawyers have found a way around it, which they say is 100% legal.
Where this is written down and is legal I just don;t know???
Anyone know the laws on buying in Sri Lanka?
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Old Aug 27th 2010, 5:00 pm
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Default Re: Buying in Sri Lanka

Yes I do have a bad gut feeling about these 99 yr leases, but the agents say the 100% + tax on non-Sri Lankan is so crazy that lawyers have found a way around it, which they say is 100% legal.Where this is written down and is legal I just don;t know???

Just read what you have said - you know you should not buy but rent.
As they say "the choice is yours" Good Luck.
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Old Aug 27th 2010, 9:30 pm
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Default Re: Buying in Sri Lanka

Originally Posted by cbc
Thanks again for the info:
Yes I do have a bad gut feeling about these 99 yr leases, but the agents say the 100% + tax on non-Sri Lankan is so crazy that lawyers have found a way around it, which they say is 100% legal.
Where this is written down and is legal I just don;t know???
Anyone know the laws on buying in Sri Lanka?
Hi Cbc

It is very easy to lose your heart to somewhere the way we all did with Goa, but when entering into the arena of purchasing property the only way to go is to rule your decision with your head and not your heart (which I know by experience is hard to do).
Listen to your intuition. The agents are going to say everything is fine because they want to sell - that is how they make a living. But the very term 'lawyers have found a way round it' is a warning in itself. It means they are trading on what they see as loopholes. Amendments to laws can close those loopholes, and you could easily find yourself with future problems by using legal loopholes. In the UK, laws cannot be applied retrospectively, but other countries often do apply legal amendments to past deeds.

Ultimately it is your choice whether or not you buy, but please do not place your hard earned money at risk without knowing for sure that you are fully legal.

Good luck - but proceed with care

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