Stamp duty, legal fees and the real cost of buying land in Sri Lanka
Budget 5% to 7% on top of the purchase price. Stamp duty is 3% on the first Rs 100,000 and 4% on the balance, legal fees run 1% to 2%, and the survey, registry extracts and registration add a fixed few hundred dollars; for a 99-year lease, stamp duty is 2% of the aggregate rent instead (since 1 April 2025).
How much is stamp duty on a land transfer in Sri Lanka?
Stamp duty on deeds of transfer is a provincial tax. The published Western Province rate is 3% on the first Rs 100,000 and 4% on every Rs 100,000 or part thereof above that. The Southern Province (Galle, Matara, Hambantota) applies the same structure in practice; confirm the current rate with your lawyer before completion. The buyer pays before the deed is registered, and the provincial revenue department can substitute its own valuation if it thinks the declared price is low (confirm with your lawyer).
How much is stamp duty on a 99-year lease?
Leases are stamped under the Stamp Duty (Special Provisions) Act No. 12 of 2006 at 2% of the aggregate rent since 1 April 2025 (previously 1%); whether the 20-year cap on dutiable rent still applies must be confirmed with your lawyer. South-coast leases are usually paid as a single upfront premium, and how the cap applies to a premium depends on the drafting. Ask your lawyer to show the calculation. There is no land lease tax: the 15% tax in the 2014 Act was abolished by Amendment Act No. 3 of 2017. See the 99-year lease guide.
How much are legal, notary and survey fees?
- Lawyer: 1% to 2% of the price, with some firms now quoting fixed fees. The lawyer usually acts as notary and attests the deed. Question any quote above 2%.
- Title search and extracts: typically a few tens of thousands of rupees.
- Licensed surveyor: roughly USD 200 to 500 for a villa plot.
- Registration: a modest Land Registry fee, paid by your lawyer on your behalf.
- Agent commission: the seller customarily pays, usually around 3%. Agree in writing at the start whether any fee is expected from you.
What other costs should a buyer budget for?
- Company route: incorporation (roughly USD 300 to 500), annual filings and an auditor.
- Coast Conservation permit before building within 300 m of the high-water line, plus local building approval.
- Annual rates (assessment tax) to the local authority.
- On exit: capital gains tax, paid by the seller on investment property, was 10% under the 2017 Inland Revenue Act; check the current rate when you sell.
What does a Rs 50 million plot cost in total? (worked example)
An illustrative 40-perch plot at Rs 1.25 million per perch (an example, not a market price), Rs 50 million (about USD 165,000):
| Item | Rs |
|---|---|
| Stamp duty: 3% of 100,000 + 4% of 49,900,000 | 1,999,000 |
| Legal fees at 1.5% | 750,000 |
| Survey, extracts, registration | ~150,000 |
| Total | ~2.9 million (about 5.8%) |
On a 99-year lease for the same premium, transfer stamp duty is replaced by lease stamp duty at 2% of the dutiable rent and the total falls to roughly 4%. Confirm the lease figure with your lawyer.
Frequently asked questions
Who pays stamp duty, buyer or seller?
The buyer on a transfer, the lessee on a lease, unless agreed otherwise in writing. The deed cannot be registered until duty is paid, so it is settled at completion. Build it into your cash plan alongside the price.
Can we declare a lower price to save stamp duty?
No. Under-declaration is an offence (confirm the penalties with your lawyer), the provincial department can reassess value and charge the difference with penalties, and a low declared cost increases your taxable gain when you sell. On Perch & Acre, listed and declared prices are expected to match. See the 8 steps to buy safely.
Is there VAT or a special foreigner tax?
As far as we know there is no VAT on a private land sale (confirm with your lawyer), and no tax specific to foreign buyers since the land lease tax was abolished in 2017. New apartments from VAT-registered developers may include VAT in the price; see buying an apartment as a foreigner.
General information, not legal advice. Laws and rates change; confirm every point with your own Sri Lankan lawyer before you pay a deposit.
