May 7, 2012
Reposted from the New York Times
By Dorn Townsend
GALLE, SRI LANKA — Since celebrating the end of almost 25 years of civil war in 2009, the island nation of Sri Lanka has become an increasingly popular vacation home spot for Western professionals working in Hong Kong, the Middle East and Singapore.
The villa, listed at $2.4 million, stands on Taple beach, about five kilometers, or three miles, east of Galle, a provincial capital in the island’s southernmost region and a historic city with a large, walled Old Town. Lanka Real Estate, an agency specializing in purchases by foreigners, is handling the sale.
(Most properties listed for the international market are priced in U.S. dollars rather than Sri Lankan rupees.)
The single-story cream-colored house, which spreads out over 510 square meters, or 5,500 square feet, was built in the Dutch gable style in 2005. It has two master bedrooms with large walk-in closets and en suite bathrooms. A third bedroom can be can be used as a study.
The house’s entrance is one of its most dramatic features. The view through the double front doors runs straight along the house’s central corridor, to the mature palm and coconut trees and the beach beyond. There is a large, shaded terrace, a swimming pool and a wooden gazebo that can be used for barbecues and entertaining on the 10,000-square-meter site.
The house has central air-conditioning but no heating, which is not needed as the temperature seldom dips below 20 degrees Celsius (68 Fahrenheit).
While there is no official tally, real estate agents estimate that about 5,000 expatriates own vacation homes in and around Galle.
Foreigners buying vacation homes here are subject to a 100 percent property tax, although that law is being reviewed by the government — and it has become common for overseas buyers to avoid the tax by arranging for 99-year renewable leases or setting up holding companies.
Typically, foreign owners also establish share investment accounts, which allow sellers to remove their money from the country without incurring capital gains taxes.
Getting to a vacation home in Galle is not difficult. Expatriates generally fly in to the island’s capital, Colombo — the flight time is about three and a half hours from Singapore and a little more than four hours from the United Arab Emirates. Then it is about an hour’s drive through the capital’s chaotic streets and along the Southern Expressway to Galle.
In addition to the pristine beaches, the port city of Galle is one of the attractions of living on Sri Lanka’s southern coast.
It was the Dutch, who held sway over the region until the end of the 18th century, who left the most lasting imprint on the city, particularly in the Old City. That quarter, a Unesco World Heritage site, is home to numerous boutique hotels, shops and cafes as well as several museums.
Since 2009, prices for vacation homes in and around Galle have risen steadily, about 15 percent per year, with beachfront properties, hilltop tea plantations and lakefront cottages all in demand.
Although Sri Lanka has used metric measurement since the 1970s, land still is still commonly measured by perch, an old Roman standard that is the equivalent of 25 square meters, or 270 square feet.
Properties with beach access that are within about 50 kilometers of Galle are selling for about $4,000 per perch, or $14.80 per square foot.
But that value drops to about $750 per perch if the distance is around 75 kilometers from the city.
Depending on the quality of the house, inland properties range from $600 to $1,500 per perch.
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