Due to the benefit of being exempt from the regular 4 per cent transfer fee levied on all property transfers in Dubai, gifting property is a well-liked idea there. Any transfer between first-degree relatives can be accepted as a gift transfer to cover the transfer charge at the Dubai Land Department. The term “Hiba” (Arabic for “gift”) is widely used to describe a present. To transfer property in Dubai as a gift, we must comprehend what that entails and the connected steps and expenses.
Dubai’s Expert Advice at Your Fingertips
For succession and inheritance purposes, gift transfers are prevalent in Dubai, especially given the prevalence of Sharia Law. Gifting property in the United Arab Emirates often involves changing the names on a title deed so that another family member now owns the property. Usually, this results from the requirement to protect the property from specific inheritance laws. Families or offshore corporations having a Dubai registration are given properties.
The standard transfer fee of 4% that must be paid to the Dubai land department at the time of the property transfer does not apply to a transfer of property that is considered a gift transfer. However, a small transfer charge of 0.125 per cent must be paid at the transfer time.
In other words, a person who owns real estate in Dubai may gift that property to members of their first-degree family by paying the Dubai Land Department a fee equal to 0.125 per cent of the property’s worth. Such changes won’t be less than AED 2,000. This considerably decreased charge permits a free property transfer between first-degree relatives without them having to think about the financial ramifications.
You may want to know: Legal Options for Property Handover Delays in UAE
Parents, children, and spouses are considered first-degree relatives eligible to transfer the property as gifts. Due to recent modifications in the laws and regulations, the land department no longer permits any gift transfers between siblings. You can gift your UAE property to close family members as a gift. You will have options about who manages your property. To guarantee that your desires are carried out, you might give UAE property to a family member or people of your preference.
Gifting is one method for preventing future Sharia law distribution issues if there is no will. It also makes succession planning easier. For instance, a husband could give his wife the title to his part of a property to prevent his siblings from inheriting it after his passing. A spouse may also be excluded from any inheritance following a divorce settlement.
Using a holding corporation, you can safeguard your property. Transferring ownership of your property to a holding company is an additional option to avoid unanticipated inheritance problems. Property owners will continue to own it via a different entity, as they will be the company’s shareholders. The advantage of gifting property to an offshore holding company is that you may keep managing it and owning it in the United Arab Emirates. You can also benefit from liability protection, keep your identity a secret, and take advantage of tax reductions.
You should know: Dispute Resolution for Residential Property Dispute in Dubai
First, the property must have a Title Deed. An off-plan apartment cannot be used as a gift at Dubai Land Department. Additionally, it would be best if you had an Affection Plan, i.e. an official site plan and a Valuation Certificate from A Gift at Dubai Land. The value of the property is established by the valuation certificate, which enables A Gift at Dubai Land to determine the necessary transfer fees. An apartment or villa’s valuation certificate costs AED 4,020 and is processed within 7–10 business days.
A No Objection Certificate (NOC), which is necessary for every property sale or purchase in Dubai, must be provided by the developer to certify that they have no objections to the ownership transfer and that there are no unpaid bills or other obligations related to the property.
The transfer costs at the Dubai Land Department are arguably the most significant thing to keep in mind. If you have any experience in the Dubai real estate market, you may already be aware that the current costs for selling or buying a house in Dubai are 4 per cent of the purchase price (plus the AED 580 admin fee). The transfer costs, however, are significantly reduced when using a Gift method and are merely 0.125 per cent of the property worth plus AED 590. (Minimum of AED 2,590). Similar to sales and acquisitions, registration trustee costs range from AED 2,000 to AED 4,000, depending on whether the valuation is less or beyond AED 2,000,000.
Two to three weeks are needed to finish the process. To complete the Gift transfer, all parties would need to be present. Therefore, it is strongly advised that you utilize a Power of Attorney. It will result in significant time, money, and inconvenience savings. Once the trustee office has received the paperwork mentioned earlier and the fee has been paid, the trustee office will execute the property transfer, which will cause a new title deed to be issued in the donee’s name. The donee will officially own the property after issuing the new title deed.
You need to know: How a property lawyer in UAE can help
On paper, it appears that the gift transfer process is straightforward. But it can also become a drawn-out and complicated process, mainly if the property owner (donor) or the recipient (donee) cannot attend all the procedures necessary to make the gift transfer happen. Having a legal professional defend or advise you during the entire process will benefit you in Dubai. Whether you give anything to your kids, spouse, parents, or business, HHS property Lawyers in Dubai will help you with the gift transfer process. For you, we can manage the entire procedure. If you have any queries about the gift transfer process or need legal counsel for wills, inheritance, or real estate/conveyancing/transfer of property problems in Dubai, please don’t hesitate to contact us.
Gifting a real estate property we’ll be glad to assist you.