No longer. On Thursday last week (February 21) the government banned the sale of land to foreigners.
It complained that prime properties had been bought by outsiders for speculation. Many had lain neglected and the country was therefore not reaping the full benefits of their tourism potential.
Information Minister, Keheliya Rambukwella, said the Cabinet had approved the move in the wake of intense local demand for land for tourism development and industry in a country emerging from nearly four decades of ethnic war.
“Foreigners have bought prime lands, particularly beach properties, and in most cases they have neglected them,” Rambukwella told reporters.
“The country is not getting the full economic benefit from these properties owned by foreigners,” he said.
There will be no moves to expropriate existing foreign-owned properties, but under the new law owners will not be allowed to sell to other foreigners. The land can be sold only to Sri Lankans, the minister said.
Favoured locations along the island’s southern coast, as well as heritage sites where Portuguese, Dutch and British colonial rulers had their forts, had been bought by foreigners in recent years, Rambukwella said.
But there had been little development and chances had been lost to create jobs, he added.
Hardline Sri Lankan nationalists have long opposed foreign ownership of land, saying outsiders were driving up prices.
In 2004, the government slapped a 100 per cent tax on the purchase price of properties sold to foreigners, in a bid to discourage the sale of land to non-natives. This apparently did not work.
Authorities will continue to lease state land to foreign investors but will no longer sell it, Rambukwella said.
Sri Lanka’s economy grew by more than 8 per cent a year in the first full two years after security forces ended a war with Tamil Tiger rebels in May 2009. Some 100,000 people were killed in 37 years of fighting.
Tourism has picked up sharply since the end of the conflict with investors rushing to build hotels along Sri Lanka’s palm-fringed beaches – and to snap up land in expectation of a quick, fat profit from reselling it.