Stamp Duty in Sri Lanka: Updated Guide for 2026

When certain transactions take place, such as transferring property, promissory notes, or mortgages, a tax must be paid to the government. This tax is called stamp duty. The name comes from the traditional practice of affixing a stamp to documents to show that the fee has been paid.

Stamp duty in Sri Lanka is governed by the Stamp Duty (Special Provisions) Act No. 12 of 2006, which outlines the types of documents and transactions that require stamp duty. These include affidavits, insurance policies, appointments of notaries public, promissory notes, and more. Stamp duties related to land transactions are mainly handled by the Provincial Councils.

How Is Stamp Duty Calculated?

Stamp duty can either be a fixed amount or a percentage of the transaction value. The calculation method depends on the type of document involved. Below are the standard rates and examples.

1. For Deeds of Transfer (Land Sales)

• 3% on the first 100,000 rupees
• 4% on the remaining amount

Example: Land worth 1,000,000 rupees

• Step 1: 100,000 x 3% = 3,000
• Step 2: 900,000 x 4% = 36,000
• Total stamp duty: 3,000 + 36,000 = 39,000 rupees

2. For Deeds of Gifts (Gifting Land)

Stamp duty for a gift deed is lower than for a sale deed, even if the land value is the same.

• 3% on the first 50,000 rupees
• 2% on the remaining amount

Example: Land valued at 1,000,000 rupees

• Step 1: 50,000 x 3% = 1,500
• Step 2: 950,000 x 2% = 19,000
• Total stamp duty: 1,500 + 19,000 = 20,500 rupees

How Is Land Value Determined for a Deed of Gift?

Gift deeds do not involve a monetary transaction, but a value must still be stated in the deed. Some people try to declare a low value to reduce stamp duty, which reduces government revenue. To prevent underpayment, a valuation from the Provincial Council Revenue Department should be obtained. If an artificially low value is used without proper valuation, penalties may be imposed.

3. For Mortgage Deeds

Stamp duty is 0.1% (1 rupee per 1,000 rupees).

• Example: Mortgage amount of 1,000,000 rupees
• Total stamp duty: 1,000,000 x 0.1% = 1,000 rupees

4. For Rent or Lease Agreements (Deeds)

Stamp duty is 2% (20 rupees per 1,000 rupees). The value is based on the total rent over the full rental period. No stamp duty is charged if the monthly rent is below 5,000 rupees.

• Example: Rent is 10,000 rupees per month for 2 years
• Total rent: 10,000 x 24 = 240,000
• Total stamp duty: 240,000 x 2% = 4,800 rupees

5. For Promissory Notes

The stamp duty for a promissory note is one rupee for every one thousand rupees or part thereof, which equals 0.1%.

• Example: Promissory note value is 1,000,000 rupees.
• Total stamp duty: 1,000,000 x 0.1% = 1,000 rupees

How to Pay Stamp Duty

Stamp duty is usually paid by affixing a special stamp to the relevant document. These stamps are then cancelled, usually by punching a hole, to prevent them from being reused.

There are separate stamp duties payable to Provincial Councils (e.g., for land transfers and deeds of gift) and to the Central Government. Each province may issue different types of receipts for this purpose. Always follow the instructions prescribed for your specific province.

For larger payments payable to the Central Government, stamp duty can be settled by crediting the appropriate amount to the account of the Commissioner General of Inland Revenue at the Bank of Ceylon.

Payment Details for Mortgage Deeds & Immovable Property:

• Bank: Bank of Ceylon
• Account Name: Commissioner General of Inland Revenue
• Branch: Taprobane Branch
• Account Number: 7041555

Payment Details for Compounding by Authorized Persons:

• Bank: Bank of Ceylon
• Account Name: Commissioner General of Inland Revenue
• Branch: Taprobane Branch
• Account Number: 4153842

Who Should Pay Stamp Duty?

There can sometimes be disputes about who is responsible for paying stamp duty. As a general rule:

• Land Sales: The buyer is responsible for paying the stamp duty.
• Mortgages: The landowner (borrower) pays.
• Rental Agreements: The tenant or person renting the property pays.