Gifting or granting real property is one of the most inexpensive estate planning strategies available in Dubai when it comes to succession and inheritance planning. Given the apparent advantage of the exemption from the standard 4% transfer fee that is due on all property transactions in the UAE, gifting property is a well-known idea there. Regarding the payment of the transfer fee at the land department, any transfer that takes place between first-degree relatives may be regarded as a gift transfer. Gifts are sometimes referred to as "heba," which is the Arabic word for "gift." We must comprehend what constitutes a gift transfer of property in Dubai, as well as the associated costs and time commitments associated with the transfer procedure.
What is meant by a HEBA Granting Property?
According to Islamic law, Heba refers to the unconditional and instantaneous transfer of property from one person to another without any consideration (payment or reservation). In the UAE, granting real property is a property transfer between first-degree relatives. Parents, children, and husbands and wives are the first-degree relatives who may be given the property as a gift. The standard transfer fee of 4% that must be paid to the land department at the time of the transfer of the property is not applicable to a transfer of property that is considered a gift transfer. However, there is a small transfer charge of 0.125% that must be paid at the time of transfer. This significantly decreased charge enables free property transfers between first-degree relatives without them having to think about the financial ramifications.
Legal Provision Governing HEBA Granting Property in the UAE
If you have a property in Dubai and want to gift it to your first-degree relatives, the terms of Executive Council Resolution No. 30 of 2013 approving the fees of the Land Department (the "DLD Fees Resolution") are so applicable.
Regarding property registration and transfer, the Dubai Land Department (DLD) solely levies fees, not taxes. Article 2 of the DLD Fees Resolution states as follows:
"By virtue of this Resolution, the Fees for registration of Real Property Dispositions in the Real Property Register, including those related to completed, under-construction, or off-plan real property, as well as the Fees for services provided by the Department are approved."
An Owner of a property in Dubai may donate that property to their first-degree family members by paying DLD a charge equal to 0.125% of the property's worth. Such costs will not be less than AED 2,000. The DLD Fees Resolution further specifies in Article 3(5) that the following rules shall apply when paying the Fees imposed by Article (2) of the Resolution:
Unless otherwise specified, the person receiving the rights will be responsible for paying the fees associated with:
- Registration of contracts for the use and expansion of another person's land.
- Contracts transferring an heir's share of real estate to other heirs, gifts, wills, mortgages, debt conversions, family endowments/ Waqf, and registration of the rights of tenants' heirs.
Heba granting property to a first-degree relative, such as your mother, father, wife husband, or son or daughter, following the aforementioned legal regulations, requires paying the DLD 0.125% of the property's value or Dh 2,000 (whichever is greater).
However, in case of selling the property to a member of your first-degree family, another person, or a corporation, you must pay 4% of the sale contract worth.
You may want to know: How to Request Gifted Property Registration in the UAE
HEBA Granting Property Procedure in the UAE
Granting real property in the UAE involves the following steps:
- The owner needs to pay the land department AED 4,020 in order to acquire an evaluation report on the value of the property.
- The property developer should provide the owner with a No Objection Certificate (NOC). The formal paperwork must be provided in each party's native nation for the owner and done to prove their first-degree connection. For instance, a birth certificate will be needed to demonstrate the connection if the owner is the donee's father or mother.
- Any such document must first be authorized and notarized in the country of origin before being submitted to the UAE Ministry of Foreign Affairs. The Ministry of Justice must additionally translate the document into Arabic and stamp it.
- Once you have the originals of the aforementioned papers in your possession, you may transfer the property by going to the Trustee's offices.
You may want to know: Gifting property in Dubai: everything you must know
What does it cost to grant real property?
- 0.125% Gift Transfer Property Fee that must be paid at the time of transfer.
- Payment for a property evaluation made to the land department.
- Cost of an official name title deed.
You merely need to wait for formal confirmation that the transfer has been completed after you have paid all of these payments and given the trustee office all the necessary papers.
How long Heba Granting Property does take in Dubai?
Depending on the conditions, you should be prepared to wait anywhere from one week to a month for the property transfer procedure to be finished.
Property Lawyer in Dubai will be able to help you through the whole procedure, make sure you have everything you need, and guarantee that neither time nor money is spent on filing applications that are insufficient or incorrect. For more information relating to Heba Granting Property in the UAE, please don’t hesitate to contact us.