The abolition of value-added tax (VAT) on real estate transactions, easing of cash restrictions, dismantling of overlapping regulations in the construction sector would attract more FDI into real estate sector, said Ravi Abeysuriya, Group Director of Candor.
Abeysuriya said the introduction of 15% VAT on apartment sales with effect from April 1, 2018 and the introduction of the Financial Intelligence Unit (FIU) reporting of cash transactions on apartment purchases will pose major challenges for real estate business in Sri Lanka.
Abeysuriya made these remarks at the recently concluded LAMUDI Re-Connect: Property 360 event held in Colombo.
“Sri Lanka needs to make infrastructure an attractive value proposition for FDI to flow especially into real estate sector, making Colombo an ideal overseas retirement haven. In addition, Urban Development Authority needs to promote, implement and regulate development activities.”
According to the CBSL, the Residential sub-index recorded a (YoY) growth of 9.7%, while the Commercial and Industrial sub-indices recoded year- on-year growth of 11.2%, 10.1% respectively
The land price index (LPI) end 2017 for the Colombo District, has recorded a year- on-year growth of 10.4%, the lowest since 2015’s 14.5%, owing to the recent trends in land price movement.
Land prices in core areas of Colombo City (Colombo 1, 2 and 3) are likely to peak with 270 hectares of new land coming into the market in 2018/2019 in the port city equipped with supporting infrastructure and urban landscaping with clear titles, which will be much more attractive to developers, Abeysuriya noted.
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