A gift of property is a popular concept in the Emirate of Dubai given the obvious known benefit of the exemption from the normal 4% transfer fee that is payable on all the property transfers in the Emirate of Dubai. Any transfer that is made between the first degree relatives can be treated as a gift transfer for the purposes of the payment of the transfer fee at the land department. A gift is often referred to as “hiba” which is an Arabic word for the term gift. It is important for us to understand as to what can be classified as a gift transfer of property in Dubai and the related process and cost involved in the transfer process.
1. What is a gift transfer?
A gift transfer is a transfer of property which is made between first degree relatives in the Emirate of Dubai. The first degree relatives that can qualify to transfer the property as a gift are parents and children and husband and wife. Any gift transfer between siblings is not permitted by the land department due to recent changes in the rules and regulations. If a property transfer is treated as a gift transfer, the normal transfer fee of 4% payable to the land department at the time of transfer of the property is not applicable to such transfer. A nominal transfer fee of 0.125% is however payable at the time of transfer. This is a substantially reduced fee and allows a free transfer of property between the first degree relatives without them having to consider the cost implications.
2. What is the process of gifting?
The process of gifting a property in the Emirate of Dubai is as follows:
- The owner is required to obtain an evaluation report on the price of the property from the land department by making payment of AED 4,020.
- The owner should obtain a No Objection Certificate (NOC) from the developer of the property. The owner and the donee are required to establish their first degree relationship through an official document issued in their respective home country. For example if the owner is the father/mother of the donee, a birth certificate will be required to be shown as the evidence of this relationship. Any such document must be legalized and notarized in the home country up to the Ministry of Foreign Affairs in the UAE. The document is also required to be translated into Arabic and stamped by the Ministry of Justice.
Once the originals of the above documents are in hand, the transfer of the property can be made by visiting the Trustee offices.
3. What is the cost of a gift transfer of property?
The cost of a gift transfer of property in the Emirate of Dubai is as follows:
- The minimum gift transfer fee payable to the land department is AED 2000. However, if the value of the property is above AED 500,000, the transfer fee payable to the land department shall be 0.125% of the overall value of the property based on the evaluation certificate issued by the land department.
- A fee of AED 580 for the name title deed.
- A fee of AED 2,000 or AED 4,000 depending upon the evaluation of the property payable to the trustee offices.
Once the above documents and the cost has been paid at the trustee office, the trustee office would execute the transfer of the property which would result in the issuance of a new title deed in the name of the donee. Once the new title deed has been issued, the donee will become the official owner in question.
4. Do I need a Power of Attorney for a gift transfer?
You do not need a Power of Attorney in order to undertake a transfer of the property if you as the owner as well as the donee are present in the Emirate of Dubai at the time of the transfer. However, Just POA is happy to act as your Power of Attorney through a special POA in order to complete the entire process of gift transfer in the name of the donee. We provide end to end service on the gift transfer and ensure that the process is completed in the shortest and the most efficient manner.