Concessions in the budget for real estate sector
View(s):Real estate portal Lamudi has done an assessment of the positive impact of the budget on the real estate market. Here is a synopsis of their view:
Until now, Sri Lanka’s government imposed laws upon the property sector, preventing foreign ownership and thus quelling sales. Since construction began to boom following the declaration of peace in 2009, a property surplus has been a serious concern. This surplus could hold back Sri Lanka’s growth as a destination for high net worth buyers, and ultimately buyers in general. Fortunately, Sri Lanka’s government has now recognised this, and steps are being taken to foster property investment both among local buyers and foreign buyers.
FDI encourages economic growth
Back in 2014, a ban was placed on the purchase of property by non-Sri Lankan buyers. Although there are still steps to be taken before a dramatic impact takes place, the government’s recent move to encourage foreign buyers puts Sri Lanka on the right track.
Relaxed rules on ‘carrying’ cash
In addition to the relaxation of the rules about home and land ownership, from 2017, further concessions will also be introduced. Foreigners entering Sri Lanka will be entitled to bring up to US$45,000 with them, without needing to declare the source of these funds. This new allowance represents an increase of $30, 000.
REITs
REITs own and finance income-producing real estate, and their introduction fosters healthy real estate ecosystems. Healthy real estate ecosystems usually contain affordable housing as well as luxury accommodation. As evidenced by the recent speech, Sri Lanka’s government seems to appreciate the importance of a healthy real estate ecosystem. This means that the future for real estate policy looks brighter than ever!