Stamp Duty in Sri Lanka Explained
A simple guide to stamp duty in Sri Lanka, including property transfers, gifts of immovable property, mortgage bonds, lease and rent agreements, promissory notes, transaction value, and why the final amount can differ by province or document type.
This guide uses publicly available Sri Lankan tax, IRD, Customs, Provincial Revenue, or government information available at the time of writing. Tax rates, thresholds, forms, exemptions, valuation treatment, import rules, and filing requirements can change. Always confirm final amounts with the relevant authority or a qualified professional before making financial, tax, legal, property, import, or business decisions.
What is stamp duty?
Stamp duty is a government charge on certain legal instruments and documents. In everyday life, people usually come across stamp duty when buying or transferring land, gifting property, signing a mortgage bond, entering into a lease agreement, or preparing certain legal documents.
For property buyers, stamp duty is often one of the main costs after the purchase price. For landlords, tenants, and borrowers, stamp duty may also appear when preparing lease, rent, or mortgage documents.
Common situations where stamp duty may apply
Stamp duty can apply to different types of documents. The correct rate depends on the transaction type, the value used, the province, and the legal instrument.
Stamp duty for buying or transferring property
For a normal sale or transfer of immovable property, a commonly used estimate is 3% on the first LKR 100,000 and 4% on the balance. This is why the effective rate is close to 4% for high-value property transfers.
| Property value | Calculation | Estimated stamp duty |
|---|---|---|
| LKR 100,000 | 3% on first LKR 100,000 | LKR 3,000 |
| LKR 1,000,000 | 3% on first 100,000 + 4% on balance | LKR 39,000 |
| LKR 10,000,000 | 3% on first 100,000 + 4% on balance | LKR 399,000 |
| LKR 100,000,000 | 3% on first 100,000 + 4% on balance | LKR 3,999,000 |
The value used may be the accepted property value, market value, consideration stated in the deed, or value assessed by the relevant authority. Do not assume that a lower stated value will always be accepted.
Example: property transfer of LKR 100 million
Here is a simple example for a property transfer value of LKR 100,000,000.
| Step | Calculation | Amount |
|---|---|---|
| First calculation part | 3% on first LKR 100,000 | LKR 3,000 |
| Remaining value | LKR 100,000,000 − LKR 100,000 | LKR 99,900,000 |
| Second calculation part | 4% on LKR 99,900,000 | LKR 3,996,000 |
| Estimated stamp duty | LKR 3,000 + LKR 3,996,000 | LKR 3,999,000 |
| Effective rate | 3,999,000 ÷ 100,000,000 | About 4.00% |
Stamp duty for a gift of immovable property
For a gift of immovable property, a commonly used estimate is 3% on the first LKR 50,000 and 2% on the balance. This can be lower than the normal property sale/transfer rate, depending on the transaction and accepted value.
| Gift value | Calculation | Estimated stamp duty |
|---|---|---|
| LKR 50,000 | 3% on first LKR 50,000 | LKR 1,500 |
| LKR 1,000,000 | 3% on first 50,000 + 2% on balance | LKR 20,500 |
| LKR 10,000,000 | 3% on first 50,000 + 2% on balance | LKR 200,500 |
Mortgage bond stamp duty
For a mortgage or bond for a definite sum of money affecting property, a simple rate is Rs. 1 for every Rs. 1,000 or part thereof. This is often described as 0.1% of the mortgage amount.
| Mortgage amount | Rate basis | Estimated stamp duty |
|---|---|---|
| LKR 1,000,000 | Rs. 1 per Rs. 1,000 | LKR 1,000 |
| LKR 10,000,000 | Rs. 1 per Rs. 1,000 | LKR 10,000 |
| LKR 50,000,000 | Rs. 1 per Rs. 1,000 | LKR 50,000 |
Banks, finance companies, lawyers, and notaries may include stamp duty as part of the closing or documentation cost for property-backed facilities.
Lease and rent agreement stamp duty
For lease or hire instruments, a commonly used rate is Rs. 20 for every Rs. 1,000 or part thereof of the aggregated rent or hire. In percentage terms, this is commonly understood as about 2%.
The value used may be the total rent for the lease period, subject to the applicable rules and limits. For long leases, the relevant law may limit the aggregation period used for the calculation.
| Monthly rent | Lease period | Aggregated rent | Estimated stamp duty at 2% |
|---|---|---|---|
| LKR 100,000 | 12 months | LKR 1,200,000 | LKR 24,000 |
| LKR 250,000 | 24 months | LKR 6,000,000 | LKR 120,000 |
| LKR 500,000 | 36 months | LKR 18,000,000 | LKR 360,000 |
Promissory note stamp duty
A promissory note may also attract stamp duty at Rs. 1 for every Rs. 1,000 or part thereof. This is similar to a 0.1% estimate.
| Promissory note value | Rate basis | Estimated stamp duty |
|---|---|---|
| LKR 500,000 | Rs. 1 per Rs. 1,000 | LKR 500 |
| LKR 1,000,000 | Rs. 1 per Rs. 1,000 | LKR 1,000 |
| LKR 5,000,000 | Rs. 1 per Rs. 1,000 | LKR 5,000 |
Who usually pays stamp duty?
Who pays stamp duty can depend on the agreement, transaction type, and legal practice. In a normal property purchase, the buyer commonly pays the stamp duty and related registration/notarial costs. In lease or mortgage situations, responsibility can depend on the document and agreement between parties.
Why the final amount can change
A calculator can estimate stamp duty, but the final payable amount can vary. The relevant authority, notary, lawyer, bank, or document processor may apply a different basis depending on the facts.
- accepted market value of the property,
- province where the property is situated,
- document type and legal wording,
- whether the transaction is a sale, gift, exchange, mortgage, or lease,
- relationship between parties,
- valuation assessment,
- exemptions or special rules,
- late payment or penalty issues, and
- changes in law, gazettes, or administrative practice.
Use the calculator
The Stamp Duty Calculator helps estimate stamp duty for property purchases or transfers, gifts of property, mortgage bonds, lease and rent agreements, promissory notes, and custom rate estimates.