LNP – Government to introduce Property Tax by mid-2027

Sri Lanka plans to introduce a property tax by the first half of 2027, according to the latest International Monetary Fund (IMF) review under the Extended Fund Facility (EFF).

As outlined in the IMF’s Fourth Review, the government has committed to continuing the development of data infrastructure essential for property taxation. Building an accurate and comprehensive database on property values is a key step in this process.

The initial phase involves digitizing historical valuation records held by the Government Valuation Department, starting with Municipal Councils. This digitization is scheduled for completion by the end of 2025.

Following this, a nationwide digital Sales Price and Rents Register (SPRR) will be established to collect market value estimates. The government has already launched a provisional version of the SPRR and resolved previous data-sharing issues. The final SPRR is expected to be operational by the end of September 2025, in line with a structural benchmark set for June 2025.

The government’s intention to proceed with developing the data infrastructure for this tax programme was detailed in a letter of intent addressed to Kristalina Georgieva, the Managing Director of the IMF.

By June 2026, the digitized historical valuation data and the SPRR will be combined to create a comprehensive national property database with estimated market values. This will serve as the foundational tool for assessing property taxes and will also support other tax policies, including capital gains taxation.

The final database will be accessible to the Inland Revenue Department (including the High Wealth Individual unit), the Valuation Department, the Land Registry, and the public by September 2026.