Updated on the 09/06/2025
The newly formed government has presented its first national budget, bringing forward a series of significant measures aimed at reshaping the property landscape. These come at a time when demand for housing continues to rise and prices remain under pressure.
The government has announced the termination of the Smart City Scheme, effective from 30 June 2025. This scheme previously offered tax incentives for the development of urban projects. Its withdrawal aims to redirect public policy towards more efficient land resource management and improved access to housing.
Registration duties for non-citizens purchasing residential property—whether under schemes approved by the Economic Development Board (EDB) or when buying an apartment—will increase from 5% to 10%. Additionally, the land transfer tax, payable by the seller, will also rise from 5% to 10%.
A programme for the conversion of agricultural land has been introduced, allowing, under specific conditions, its transformation into residential zones. This initiative forms part of a broader effort to align land use with the rising demand for housing. A national land use policy has been announced, accompanied by the implementation of an integrated digital land registry to accelerate planning processes.
In the area of social housing, a sum of Rs 40 million has been allocated for the creation of a management system for NHDC-managed housing estates. The monthly income threshold for eligibility to purchase social housing has been raised from Rs 40,000 to Rs 48,000. Grants of Rs 100,000 and Rs 200,000 are provided for NHDC and SHDC housing respectively. A fixed interest rate of 1.5% over 30 years will apply to NHDC home loans.
The VAT exemption for the construction of individual houses valued at up to Rs 3 million has been extended. The Build and Grow programme has been introduced to ease access to financing for families building on inherited or family-owned land.
