Guide · Foreign ownership
Leasing land as a foreign national
Where freehold is restricted, a long lease has been the usual route in — but the terms move with each amendment. Here is the shape, with the caveats it needs.
Where freehold ownership is restricted for foreign nationals, a long lease has historically been the usual route in — but the terms, the length and any lease tax have moved with each amendment and budget, so this is firmly an area for current legal advice.
This guide explains the shape of leasing, not the current numbers. It deliberately does not quote a maximum length or a tax rate, because those are exactly what changes, and a figure stated here that has since moved would mislead more than it helps.
Why leasing exists as a route
The Land (Restrictions on Alienation) Act No. 38 of 2014, as amended, restricts the transfer of freehold land to foreign nationals. A long lease has been the mechanism that lets a foreign buyer use and hold land where outright ownership is closed off. It is a different right from freehold, with different security and value — which is the first thing to understand and the first thing to take advice on.
The details that change, and matter most
Three things about a foreign lease are both important and prone to change: the maximum length allowed, any tax tied to the lease, and the conditions attached. These are set by law and have moved over time. Whatever you read online — including older guides — treat as possibly out of date, and confirm the current position with a Sri Lankan lawyer before you plan around it. This is not caution for its own sake; it is the specific area where stale information does real damage.
A lease is not freehold
Whether a lease can be assigned, sold or inherited depends on its terms and on current law. Whether a lease is “as good as owning” depends entirely on your purpose and time horizon. These are decisions to take with a lawyer who can explain the practical difference for your situation, not formalities to wave through.
The checks, and a warning
A foreign leaseholder needs every check an ordinary buyer needs — title, encumbrances, survey — plus specific advice on the lease terms and the current rules. An independent Sri Lankan lawyer is essential here, not optional.
And a plain warning: be very wary of any scheme promising a clever way around the ownership restrictions. The rules have been tightened precisely to catch such structures, and the consequences fall on you. If something sounds like a workaround, run it past an independent lawyer before you go anywhere near it. Cornerstone can show you what is available and introduce you to the right lawyer — but the legal structure itself is their work, not ours.
Sources
- Long leases have been the usual route for foreign use of land where freehold is restricted; terms are set by, and change with, the Act and amendments.Land (Restrictions on Alienation) Act No. 38 of 2014 and amendments
Questions people ask
How does leasing land work for foreign buyers?
Where freehold ownership is restricted for foreign nationals, a long lease has historically been the usual route in, but the terms, length and any lease tax have changed with amendments and budgets. Because the detail moves, treat any specific figure online with caution and confirm the current position with a Sri Lankan lawyer.
How long can a lease be?
Long leases have been the mechanism for foreign use of land, but the maximum length and conditions are set by law and have changed over time. Do not rely on a number you read — confirm the current maximum and terms with a lawyer before you plan around them.
Is there a tax on leases to foreigners?
There has at times been a tax tied to leases granted to foreign nationals, and it is exactly the kind of rule that changes with each budget. This is a question for a lawyer and the current law, not for a web page or an old forum post.
Is a lease as good as owning?
A lease and freehold ownership are different rights with different security and value, and which matters to you depends on your purpose and time horizon. A lawyer can explain the practical difference for your situation — this is a decision to take with advice, not a formality.
Can a lease be passed on or sold?
Whether and how a lease can be assigned, sold or inherited depends on its terms and on current law, so read the lease and take advice before assuming. These are the details that matter most and are easiest to get wrong from a distance.
What checks does a foreign leaseholder need?
The same title and encumbrance checks any buyer needs, plus specific advice on the lease terms and the current foreign-ownership rules — so an independent Sri Lankan lawyer is essential, not optional. Distance and complexity both raise the stakes.
Can an agent help a foreign leaseholder?
An agent can show you what is available, explain how the market generally works and introduce you to the right lawyer — Cornerstone does exactly that. But the legal structure of a foreign lease is a lawyer's work, and we will point you to one rather than advise on it ourselves.
Should I be wary of schemes to get around the rules?
Yes — be very wary of any scheme promising a way around the foreign-ownership restrictions, because the rules have been tightened precisely to catch them and the consequences fall on you. If something sounds like a clever workaround, run it past an independent lawyer before you go near it.