Buying a house in Sri Lanka is one of the most rewarding investments you can make — whether you're a local resident securing your dream home or an overseas Sri Lankan returning to invest in real estate. However, property laws in Sri Lanka can be complex, and overlooking key legal steps may lead to disputes, ownership issues, or financial losses.
This comprehensive guide walks you through every crucial legal requirement before purchasing property in Sri Lanka, helping you make a confident, risk-free investment.
1. Confirm Ownership and Clear Title Deeds
The first and most vital step before buying any house in Sri Lanka is verifying ownership. The seller must hold a clear and marketable title to the property. Request a copy of the title deed and have it examined by a qualified notary public or lawyer.
A professional title search at the relevant Land Registry will help confirm:
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The property's legal owner.
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Any mortgages, leases, or encumbrances.
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Past transactions affecting ownership.
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Whether the title is free from disputes.
Tip: Avoid verbal assurances. Only written, registered deeds legally confirm ownership in Sri Lanka.
2. Examine the Land Registry Extract (Copy of Folio)
Every registered property in Sri Lanka has an entry in the Land Registry (also known as the Land Register). Request a certified copy of the folio that details the property's registration history, boundaries, and encumbrances.
This step ensures that what you're buying matches the legal records and that no third party has any hidden claims or rights over the land or house.
3. Verify the Survey Plan and Boundaries
A Survey Plan prepared by a licensed surveyor defines the exact boundaries of the property. Comparing the survey plan with the physical property prevents disputes with neighbors or boundary overlaps.
Ensure the survey plan:
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Matches the dimensions stated in the deed.
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Is approved by the local Survey Department.
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Includes access roads and right-of-way if the property isn't facing a public road.
Pro Tip: For older houses, ask for an updated survey to ensure there have been no unauthorized boundary changes.
4. Check Building Approvals and Certificates
If the property includes an existing house, you must verify that it was constructed legally and with proper approvals. Obtain the following documents from the local authority (Municipal Council, Urban Council, or Pradeshiya Sabha):
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Approved Building Plan – Ensures the construction was done according to regulations.
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Certificate of Conformity (COC) – Issued after inspection to confirm that the building complies with the approved plan.
Buying a house without a COC can lead to serious legal issues and may affect your ability to obtain utilities or resell the property later.
5. Review Utility Connections and Approvals
Ensure all essential services—electricity, water, and sewage—are connected through authorized means. Request original bills and proof of payment to confirm there are no outstanding charges. Unauthorized or shared connections can cause legal complications and utility disconnections.
6. Verify Access and Road Rights
In Sri Lanka, many properties—especially in suburban or rural areas—depend on shared private roads or right-of-way easements. Confirm legal access to the property is clearly stated in the deed.
If access is over another's land, ensure a registered Right of Way Agreement exists. Without it, future owners or neighbors could legally restrict access.
7. Check for Land Use Restrictions and Zoning Laws
Different areas in Sri Lanka are governed by local development regulations that restrict land use. Before purchase, check with the local authority for:
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Residential or commercial zoning classification.
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Development restrictions or conservation zones.
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Future government projects (such as road expansions) that could affect your property.
This is particularly important for foreign investors seeking properties near coastal zones or high-value urban areas like Colombo, Kandy, or Galle.
8. Conduct Environmental and Flood Risk Assessments
Certain regions in Sri Lanka are prone to flooding or environmental restrictions. Before finalizing your purchase, request environmental clearance or flood risk assessments, especially for properties near rivers, wetlands, or coastal belts.
Local councils or the Central Environmental Authority (CEA) can provide guidance on environmentally sensitive areas.
9. For Foreign Buyers: Understand Investment Regulations
Foreigners can buy apartments or condominium units in Sri Lanka but face restrictions on purchasing freehold land. Here's what to know:
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Foreign individuals cannot directly buy freehold land.
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You can invest through a locally incorporated company with less than 50% foreign ownership.
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Buying condominium units above the fourth floor is permitted.
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All transactions must go through an Inward Investment Account (IIA) in a licensed commercial bank in Sri Lanka.
Proper structuring and legal guidance are crucial for compliance and tax efficiency.
10. Prepare and Register the Deed of Transfer
Once due diligence is complete and payment terms are agreed upon, your notary will prepare a Deed of Transfer. This must include:
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Seller and buyer details.
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Property description.
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Sale price and consideration.
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Witness signatures.
The deed must then be signed in the presence of a notary public and registered at the relevant Land Registry. Registration officially transfers ownership to you.
11. Pay Stamp Duty and Other Legal Fees
Before registration, the buyer must pay the applicable stamp duty (typically 3% of the property value for locals and 4% for foreigners). Other possible fees include:
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Notary and registration charges.
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Surveyor fees (if applicable).
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Lawyer's fees for due diligence and document review.
Retain all receipts, as they are required for future property transfers or tax purposes.
12. Secure Insurance and Maintain Legal Documents
After purchase, protect your investment by obtaining property insurance covering fire, flood, and natural disasters. Safely store original copies of your deed, survey plan, and registration receipts — they are your legal proof of ownership.
Buying a house in Sri Lanka can be a smooth and secure process when you follow the proper legal steps. Whether you are a local resident or an overseas investor from the U.S., Canada, Australia, or the UK, understanding these legal requirements helps protect your investment and ensures peace of mind.
Always engage a qualified Sri Lankan lawyer or notary to guide you through due diligence, documentation, and registration. With the right preparation and legal awareness, your dream home in Sri Lanka can become a sound, lifelong asset.
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