Gifting Property is a popular idea in Dubai due to the benefit of being exempt from the standard 4% transfer fee levied on all property transfers. Any transfer between first-degree relatives can be accepted as a gift transfer at the Dubai Land Department to cover the transfer fee. A present is commonly referred to as a “Hiba” (Arabic for “gift”). To transfer property in Dubai as a gift, we must first understand what that entails, as well as the associated steps and costs.

What is Property Gifting in Dubai?

Gift transfers are common in Dubai for succession and inheritance purposes, especially given the prevalence of Sharia Law. In the United Arab Emirates, gifting property frequently entails changing the names on a title deed so that another family member now owns the property. Typically, this is due to the need to protect the property from specific inheritance laws. Properties are given to families or offshore corporations with a Dubai registration.

What is the rate of property transfer in Dubai?

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 gift transfer of property. However, there is a 0.125 percent transfer fee.

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In other words, a person who owns real estate in Dubai may gift that property to members of their first-degree family by paying a fee equal to 0.125 percent of the property’s value to the Dubai Land Department. Such modifications will not be less than AED 2,000. This significantly reduced fee allows for free property transfer between first-degree relatives without them having to consider the financial implications.

Who is eligible to receive it?

1-First-degree relatives or family members

Parents, children, and spouses are first-degree relatives who can transfer property as gifts. The land department no longer allows gift transfers between siblings due to recent changes in laws and regulations. You can give your UAE property as a gift to close family members. You will have choices regarding who manages your property. To ensure that your wishes are carried out, you could give UAE property to a family member or people of your choice.

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2-Company Changes

You can protect your property by forming a holding corporation. Transferring ownership of your property to a holding company is another option for avoiding unexpected inheritance issues. Property owners will continue to own it through a different entity because they will be shareholders in the company. The benefit of transferring property to an offshore holding company is that you can continue to manage and own it in the United Arab Emirates. You can also benefit from liability protection, conceal your identity, and take advantage of tax breaks.

Procedure for Gifting Property: Steps to Take

The steps for gifting property in Dubai are as follows:

• 1-ONE-TITLE DEED

The property must first have a Title Deed. At Dubai Land Department, an off-plan apartment cannot be given as a gift. It would also be ideal if you had an Affection Plan, i.e. an official site plan, as well as a Valuation Certificate from A Gift at Dubai Land. The valuation certificate establishes the property’s value, allowing A Gift at Dubai Land to calculate the necessary transfer fees. The valuation certificate for an apartment or villa costs AED 4,020 and is processed within 7-10 business days.

• 2-CERTIFICATE OF NO OBJECTION

The developer must provide a No Objection Certificate (NOC), which is required for every property sale or purchase in Dubai, 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.

• 3-TRANSFER FEES

The transfer costs at the Dubai Land Department are arguably the most important consideration. If you are familiar with the Dubai real estate market, you are probably aware that the current costs for selling or buying a house in Dubai are 4% of the purchase price (plus the AED 580 admin fee). However, when using the Gift method, the transfer costs are significantly reduced and are only 0.125 percent of the property’s value plus AED 590. (Minimum of AED 2,590). Registration trustee costs, like sales and acquisitions, ranging from AED 2,000 to AED 4,000, depending on whether the valuation is less than or greater than AED 2,000,000.

• 4-TRANSFER OF TITLES

The process takes two to three weeks to complete. All parties must be present to complete the Gift transfer. As a result, it is strongly recommended that you use a Power of Attorney. It will save you a lot of time, money, and inconvenience. Once the trustee office receives the previously mentioned paperwork and the fee, the trustee office will execute the property transfer, resulting in the issuance of a new title deed in the donee’s name. After issuing the new title deed, the donee will be the sole owner of the property.

How can DDR’s Lawyers and Legal Consultants help you?

On the surface, the gift transfer procedure appears to be simple. However, it can also become a lengthy and complicated process, particularly if the property owner (donor) or the recipient (donee) are unable to attend all of the procedures required to complete the gift transfer. In Dubai, having a legal professional defend or advise you throughout the process will benefit you. DDR associates property Lawyers in Dubai will assist you with the gift transfer process whether it is to your children, spouse, parents, or business. We can handle the entire procedure for you. If you have any questions about the gift transfer process or require legal advice for wills, inheritance, or real estate/conveyancing/transfer of property, please contact us.

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