29 July 2024 01:35 am Views - 230
By Nishel Fernando
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Sivarajah Thumilan |
Sri Lanka’s real estate and construction sectors are recovering strongly, but a leading real estate developer cautioned that a toxic mix of inconsistent policies is making the sector increasingly uncompetitive globally, despite its significant foreign exchange earning potential.
Blue Ocean Group of Companies Founder and Chairman, Sivarajah Thumilan blamed high taxation and inconsistent policies for the significant increase in real estate prices in the country compared to other regional players such as Bangladesh, Thailand, Singapore and India.
“This is not due to a developer’s problem; this is due to high taxation, from the point of purchasing land to social security levy, VATs, customer stamp duty, and so on. There have been no consistent policies either,” he said while speaking at the Group’s 13th anniversary celebrations.
He warned that upcoming property taxes, including the imputed rental income tax effective from April 1, 2025, would further drive up prices and make the sector less competitive in the eyes of foreign investors.
Thumilan pointed out that the real estate sector could bring in more foreign inflows than tourism if a conducive operational environment is created.
“We are certainly not expecting a smooth ride,” he added.
Meanwhile, Kesely Developments Non-Executive Director Adrian Perera drew attention to excessive regulations and requirements that discourage foreigners from investing in the country’s real estate, highlighting that even Colombo Port City is not immune to such issues.
“Unfortunately, in Sri Lanka, we discourage foreigners from coming here. There are more bottlenecks for investments. You can buy a condo in Australia within six months, but it takes eight months to make a US$ 100,000 investment here,” he added.