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The budget for 2016 was announced last week.
Even though most of the people have mixed feelings about the new budget, it is very clear that this is one of the most foreigner-friendly budget after years and is expected to have a considerable impact on Sri Lanka’s real estate market.
From the predictions that have been made, foreign investors will be interested in expanding their investments into real estate market. This is mainly due to the reason of removal of land lease tax for foreigners.
The previous government made laws to ban foreigners from owning property and real estate leased to non-nationals were subjected to 100 percent tax.
The new government has proposed to remove this lease tax for non-nationals.
This is an obvious green-sign for foreign investors and is expected to is motivate more foreigners to invest with ease in the growth and development of Sri Lanka’s real estate market.
Furthermore, the government is expecting to ease the tax structure within the construction sector, this is planned to be done by removing import duties for machinery materials needed for construction purposes.
This is expected to reduce the cost of construction, as a result, there will be a possible reduction in the final sale price for real estate developments.
Sri Lanka’s residential and commercial real estate sectors are making rapid and sustained progress.
It is a well known fact that, property prices in central Colombo are much higher than in the suburban areas, the reduction in construction cost can lead to more affordable properties within city limits.
According to Mr. Ravi Karunanayaka’s, the government is also considering to reduce levies on hotels and the travel industry.
Overall, this budget is favourable for international investors. It clearly strengthens Sri Lanka’s real estate market which will make a positive impact on Sri Lankan economy.
The Budget for 2016 and Sri Lanka’s Real Estate Market
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