Gifting of properties in the UAE

Gifting

Given the well-known benefit of being free from the standard 4% transfer fee that must be paid on all property transfers in the Emirate of Dubai, giving property as a gift is a well-liked idea. To deliver the transfer fee at the land department, any transfer done between first-degree relatives may be regarded as a gift transfer. The Arabic word for a present is “Hiba,” frequently referred to as gifts. We must comprehend what constitutes a gift transfer of property in Dubai and the associated procedure and costs.

In the Emirate of Dubai, a gift transfer is a property transfer between first-degree relatives. Parents, children, husbands and wives are first-degree relatives who can be given the property as a gift. Due to recent amendments to the laws, the land department no longer permits any gift transfers between siblings. The standard transfer fee of 4% that one must pay to the land department at the time of the property transfer does not apply to a transfer of property treated as a gift transfer. However, there is a small transfer fee of 0.125% that one must pay at the time of transfer. This significantly decreased charge enables free property transfers between first-degree relatives without having to consider the financial ramifications.

What steps make up the gifting process?

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.
• A No Objection Certificate (NOC) should be obtained by the owner 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.

Cost of Gift transfer

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 trustee office has received the paperwork mentioned above 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.

What are the benefits of gifting property in Dubai?

You can avoid problems with property inheritance in the UAE in the future by gifting. By doing this, the inheritance/succession procedure is made simpler because Sharia law distribution is not required, and you have the freedom to select the person who will inherit your property.

By giving your property to your chosen beneficiary now, you are also assisting them in establishing ownership in advance, which can be challenging and complicated should you pass away intestate or suddenly. Additionally, you can save money on transfer fees by using a gift transfer rather than a sale and buy a transfer.

Why do you need a Lawyer?

On paper, the gift transfer procedure appears to be straightforward. However, it can also become a drawn-out and complicated process, mainly if the property owner (donor) or the recipient (donee) cannot take part in or attend all the formalities necessary to accomplish the gift transfer.

Having legal representation or advice throughout the entire process in this jurisdiction will be to your benefit. Marwa Al Reyami Lawyers and Legal Consultants can guide you during a gift transfer, whether it involves gifting property to your children, spouse, parents or company (and vice versa). We can handle the whole process for you.