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In that context the sale of land through leases could even be termed a relaxation of the earlier policy, analysts say.
The tax has since been removed.
But officials have said that foreign firms which have operated in Sri Lanka for a long time would still be allowed to buy freehold land through special permission.
"From this year foreigners can have access to state and private land only through long term lease arrangements," President Rajapaksa said delivering the 2014 budget speech to parliament.
Freehold where people own the land and have absolute right to alienate rather than the king originated in Britain with the breakdown of fiefdom, and it came to Sri Lanka with European rule.
Analysts say by restricting the right to sell the land, the state is taking away a liberty of the citizen.
Preventing 'foreigners' from holding land also originated in Europe with the development of the so-called rural nationalism, particularly in Eastern Europe.
Sri Lanka imposed a 100 p