The one route that ends in title
Of everything open to a non-citizen in Sri Lanka, the condominium parcel is the only route that produces outright title by purchase. Not a term of years, not a minority stake in a company holding land, title to the parcel, in your own name.
The Land (Restrictions on Alienation) Act, No. 38 of 2014 exempts condominium parcels from the restriction that otherwise closes freehold to foreign nationals. The exemption carries one condition, and it is about money rather than about property.
The condition, stated plainly
The entire purchase consideration has to enter the country as an inward foreign remittance, land in a Sri Lankan bank, and do all of that before the deed of transfer is executed.
Three parts of that sentence each do work. Entire, not a deposit, not the balance, the whole of it. Inward foreign remittance, money coming into the country from outside, through the banking system. Before execution, the sequence is fixed, and a deed executed while funds are still in transit is not the same transaction as one executed after they have landed.
Which account the money should pass through is an exchange control question rather than a property question, and it is answered by your bank rather than by an article. Settle it with the bank and the notary together at the outset, because this is the part of the purchase where running late has consequences rather than just being inconvenient.
The fourth floor, and the condition that replaced it
Older guidance to foreign buyers describes a restriction confining them to units on or above the fourth floor of a building, excluding the ground floor and floors given over only to common elements. That was the position for a period, and the detail is accurate as a description of the previous law.
It is not the current position. The law firm D. L. and F. de Saram describes the Land (Restrictions on Alienation) (Amendment) Act, No. 21 of 2018 as widening the exemption: on its account, any condominium parcel specified under the Apartment Ownership Law falls outside the ownership restrictions, provided the entire purchase consideration is paid up front through an inward foreign remittance prior to execution of the deed of transfer.
Note the shape of that. The firm frames the change as an expanded exemption carrying a payment condition, not as a floor rule struck out and nothing put in its place. The practical reading for a buyer is that the floor a parcel sits on has stopped being the gating question and the money has become it. A source still presenting the fourth-floor rule as live is describing a superseded position, which is a reasonable test of how current the rest of that source is.
What a parcel actually is
The word condominium is doing something specific here. Under the Apartment Ownership Law, No. 11 of 1973 and its later amendments, a building on a single land parcel can be subdivided into separately owned condominium parcels, each with common elements attached to it.
That structure is what makes individual title to an apartment possible. It also means what you own is the parcel and a share in the common elements, not the land the building stands on, held individually. For a foreign buyer this is the elegant part of the route rather than a catch: the restriction bites on land, and a condominium parcel is not held as land in that sense.
Confirm before buying that the building is properly a condominium property under that law, with the plan and the registration to prove it. A unit in a block that has never been subdivided under the Apartment Ownership Law is not a condominium parcel, whatever the marketing says.
What the market looks like right now
| Measure, 2026 Q1 | Reading |
|---|---|
| New condominium price index, Colombo District | Up 18.5% year on year |
| Condominium sales volume | Down 15.2% |
| Colombo District share of condominium sales transactions | 65%, a geographic share only |
| LKR 25m to 50m band | Fell |
| LKR 50m to 70m band, and 75m and above | Rose slightly |
All of the above is Central Bank of Sri Lanka data for the first quarter of 2026, the volume figure as reported by EconomyNext. The Central Bank has run its Condominium Market Survey quarterly since the third quarter of 2017, so the series is now deep enough to read trends from rather than points.
The two headline numbers point in opposite directions, and that is the important part. An 18.5 per cent rise in the price index sits alongside a 15.2 per cent fall in the number of sales, so fewer transactions are setting that index than were setting it a year before. Neither figure on its own describes the market: a price index measures prices, not demand, and a volume figure measures sales, not value. Read them together, and treat any account of the Colombo condominium market that quotes only the first of them as half an argument.
The band data adds detail worth having. The 25 to 50 million rupee segment fell while the two upper segments rose slightly, which puts the softness in the middle of the market rather than uniformly across it.
Selling it on, and to whom
Because the route ends in title rather than in a term, a foreign owner can sell the parcel the way any owner sells one. That is the practical advantage over a lease, where what changes hands is the remainder of a term rather than the thing itself.
There is a wrinkle worth planning for. If the eventual purchaser is also a foreign national, that purchase has to satisfy the remittance condition in its own right, the exemption attaches to each transaction rather than to the parcel. A seller who understands that early can raise it with the buyer’s bank at the point of offer rather than a fortnight before completion.
If the eventual purchaser is a Sri Lankan citizen, the condition is not theirs to meet, and the sale proceeds as a domestic one.
What is not knowable from the published figures is who the next buyer will be. Colombo District accounted for 65 per cent of condominium sales transactions in 2026 Q1, but that is a geographic share: it says where transactions happen, and nothing at all about the nationality or residency of the people making them. No published series breaks condominium buyers down that way. Choose the parcel on the things that can be assessed, the building, the location, the condition of the common elements, the price against comparable evidence, rather than on an assumption about which market it will sell back into.
Onward sale also raises tax. The capital gains position on realising an investment asset in Sri Lanka has changed recently, and it is not a question to answer from an older article. Put it to a tax adviser or a notary at the point you decide to sell.
Before you commit anything
Two checks belong specifically to this route rather than to buying generally. First, that the remittance can be executed in the required form and in the required order, confirmed by the bank in writing rather than assumed. Second, that the parcel is what the seller says it is under the Apartment Ownership Law, with the condominium plan to support it.
Everything else is ordinary purchase diligence, the developer or seller’s title, the standing of whichever body administers the common elements, what the share in those elements carries with it, and what the recurring outgoings actually are.
Where to take this next
This article sets out the statutory position and cites the sources behind it. It is not legal advice, and the questions that decide a specific purchase are answered by documents rather than by articles. Instruct a notary or an attorney to review the title, the condominium plan and the remittance sequence before any money leaves your account.
For the property itself, A1 works across Colombo, Kandy, Gampaha, Kurunegala, Matara, Galle and Nuwara Eliya, on either side of a sale or a letting. If you are weighing specific buildings, we can appraise them against comparable evidence and tell you what the asking price is competing with.