Your Guide to Being a Landlord in Sri Lanka
Owning investment property can generate strong returns. Understanding your responsibilities as a landlord will help you protect your asset and maintain a positive relationship with your tenants.
Your Guide to Being a Landlord in Sri Lanka
Letting out a property well means more than finding a tenant, it means pricing it right, documenting it properly, and knowing exactly where you stand if something goes wrong. Here's what every landlord in Sri Lanka should know, plus how we help owners manage their properties without the day-to-day hassle.
Preparing your property to let
1. Get the property genuinely rent-ready Address repairs before listing, not after a tenant moves in, unresolved issues at move-in become disputes later. Confirm you have (or can obtain) a valid Certificate of Conformity, which tenants are entitled to ask for.
2. Price it against real comparables Overpricing means longer vacancy, which almost always costs more than pricing slightly conservatively from the start. Use recent lettings in your immediate area, not city-wide averages.
3. Decide: tenancy or lease A month-to-month tenancy gives you flexibility to adjust terms or reclaim the property faster, but less certainty of income. A fixed-term, notarised lease locks in a tenant and rental income for a set period, and — critically — gives you access to the streamlined recovery process under the 2023 Act (below) if things go wrong.
4. Screen tenants properly Ask for proof of income or employment, and for a previous landlord reference where possible. A short screening conversation upfront is far cheaper than a problematic tenancy later.
5. Document the property's condition at move-in Photos and a written inventory at handover protect you (and the tenant) when it's time to assess the security deposit at move-out.
6. Put the agreement in writing — and notarise it, if it's a lease A written tenancy protects you even without notarisation. A fixed-term lease must be signed before a notary with two witnesses to be fully enforceable and to register.
Your tax obligations as a landlord
Rental income forms part of your assessable income and is taxed at Sri Lanka's progressive personal income tax rates. For the 2025/26 year of assessment, resident individuals pay 0% on the first LKR 1,800,000 of total assessable income, rising through 6%, 18%, 24%, and 30% bands to 36% on income above LKR 4,300,000.
A few landlord-specific points worth knowing:
- The 25% deemed relief. Resident individual landlords can deduct a flat 25% of total rental income before tax, covering repair, maintenance, and depreciation — with no receipts required. You can instead claim your actual expenses in a given year, but not both for the same property in the same year.
- This relief only applies to "investment assets" — property held passively for rent, as distinct from a business you actively run on the premises.
- Withholding tax on rent from business tenants. If your tenant is a business paying more than LKR 100,000 in monthly rent, they're required to withhold 10% tax at source before paying you, under the Inland Revenue (Amendment) Act, No. 45 of 2022 — factor this into your cash flow expectations if you're letting to a company.
- Multiple unoccupied properties. Sri Lanka has been rolling out an imputed rental income tax targeting owners of more than one unoccupied home (typically holiday homes), based on government-assessed potential rental value — your primary residence is exempt. If this applies to you, confirm current implementation status with a tax advisor, as this policy has been phasing in.
Tax rules and thresholds change, confirm your specific position with the Inland Revenue Department or a tax professional before filing.
Your legal protections if a tenant doesn't pay or won't leave
The Recovery of Possession of Premises Given on Lease Act, No. 1 of 2023 significantly improved landlords' position compared to the old Rent Act system:
- You can institute an action in the District Court to recover possession where a tenant fails to leave after the lease expires, or breaches the lease terms
- The court can issue a provisional order (a decree nisi) — if the tenant doesn't successfully contest it, it becomes final and enforceable within a matter of months rather than the years the old process often took
- You can also recover arrears of rent, service charges, and liquidated damages through the same action
- This protection is strongest when your lease is properly notarised and stamped — an informal, undocumented tenancy is harder to enforce quickly, so the paperwork you do upfront directly affects how fast you can act if things go wrong
You still cannot evict a tenant yourself (changing locks, removing belongings, cutting utilities) — that remains unlawful regardless of the circumstances, and must go through the court process.
Ongoing responsibilities as a landlord
- Keep the property in a habitable condition and address structural repairs — clarify in the agreement what counts as your responsibility versus the tenant's
- Return the security deposit promptly at the end of the tenancy, minus any documented, agreed deductions
- Provide receipts for rent and deposit payments
- If subject to the Rent Act (older residential premises occupied since before 1980), be aware that rent increases and other terms are more restricted than for newer lettings
Let us manage it for you
Being a landlord shouldn't mean fielding late-night maintenance calls or chasing rent yourself. Our Property Management service handles the day-to-day, so your property stays occupied, maintained, and generating income without the hassle:
- Tenant sourcing and screening — we find and vet tenants so you're not taking that risk alone
- Home maintenance coordination — repairs handled promptly through our vetted network, protecting both your asset and your tenant relationship
- Lease documentation done right — properly notarised where needed, so you have full legal protection if a dispute ever arises
- Long-term or short-term leasing options — whether you want stable long-term income or the flexibility of short-term letting
Ready to hand off the day-to-day? Talk to our property management team about listing your property with Golden Ceylon Property.
This guide is for general information only and isn't a substitute for advice from a licensed attorney-at-law or tax advisor. Looking to buy or sell instead? Read our Guide to Buying Property in Sri Lanka or Guide to Selling Property in Sri Lanka.
Frequently Asked Questions
We've answered some of the most common questions to help you get started.
Yes, rental income is part of your assessable income and taxed at Sri Lanka's progressive rates, though resident individual landlords can claim a 25% deemed relief for repair, maintenance, and depreciation without needing receipts.
No. Self-help eviction — changing locks, removing belongings, cutting utilities — is unlawful. You must apply to the District Court under the Recovery of Possession of Premises Given on Lease Act.
A lease gives you more certainty and faster legal recourse if there's a dispute, since it must be notarised and is directly covered by the 2023 Act. A tenancy is more flexible but offers less structured protection.
Only if your tenant is a business paying more than LKR 100,000 per month in rent, in that case, they're required to withhold 10% at source.
For lettings outside the older Rent Act, this is negotiable, 1–3 months' rent is common practice.