For expats searching for a property to buy in Sri Lanka, the government has lifted the ban on foreigners buying property. However, there is a land tax which they must agree to pay.
Looking for property can be done with the help of agents or through various forums online. Finding out about the Sri Lankan laws and the way to go about procuring a property must be done prior to the actual buying of the real estate. Under such circumstances, a lawyer's help might come in handy as there would be contracts/lease documents to be drawn up.
The classifieds in the Sri Lankan newspapers would also provide leads to properties available for purchase:
In Sri Lanka, the estate agents charge a commission for their services. But, the sad part is that there is no accreditation of such agents. Caution must be exercised.
Before going in for any agreement/contract, the agent's credentials must be checked against their past track record. As for price, agents generally charge about 3% of the property's deal price, once it is fixed.
Taking on multiple brokers/agents is also not a good idea; it would be best to keep one estate agent handling your needs and requirements. If the agent does not deliver, then one can move on to another.
Having made up your mind over which property to buy, you must be careful before finalising any agreement.
When finalising a deal on property, it would be prudent to engage the services of a lawyer who would draw up the contract for you and get the legalities sorted out. Choose someone who speaks your language and can translate documents.
Both parties, the land owner and person purchasing the property need to sign the contract in the lawyer's presence before the papers can be finally registered with the concerned authorities (Land Registry), in the new owner's name.
Payments must be made in Sri Lankan rupees. Most sellers are comfortable with a 10-20% of the property's total value as advance. The payment of the pending amount should not be delayed as it works out better if the time-period between the payment of advance and final purchase is less.
Besides the amount required for buying the property, foreigners need to pay 100% Land Tax.
Lawyer's fees are an additional expense. In case the seller is not present at the time of sale, a power of attorney would have to be paid for.
Additional costs would be incurred in notaries' fees, registration fees, taxes, agents' fees, etc.
Land and property auctions in Sri Lanka are a way to find accommodation or investment at a fraction of the usual price.