Property Gifting

property-gifting
We have had various inquiries concerning Gifts transfers and particularly in connection to whether such transfers can be between siblings and whether it is possible to do multiple Gift transfer on a similar property. its still not clear. After a few visits to DLD registration trustees offices and the main office, the answers is still unclear. Some recommended that it was conceivable while others discredit this claim. DLD do not consider siblings as first degree to be able to proceed a Gift transfer on a property (and hence bringing down transfer fees i.e 0.125% rather than 4%). previously to go around this, investors were doing “double Gifts”, by first transferring the property as a Gift from one sibling to the parent (Gift 1) and afterward doing another Gift transfer to the other sibling (Gift 2). it used to be possible, however a recent decree from DLD now don’t allow multiple Gift transfers being completed on one property.However, special cases can apply. The DLD will permit “double Gifts” in a few conditions (however please note that this will not be applicable to siblings). A case of a circumstance where a “double Gift” might be permitted would be in connection to company transfers of ownership and/or shareholder.For instance, it is possible to proceed a Gift transfer from one individual to another individual (if they fulfill the first degree relative criteria of DLD) and after that another Gift to a JAFZA offshore company (property owner and company shareholder should be the same with a similar level of ownership / shareholding). Approvals must be obtained as a No Objection Certificate from DLD yet in principle it is possible to do this. As a business, we do get many interests from investors and owners for such activities for the obvious reasons of tax and inheritance. This will come as uplifting news to many investors of the Dubai property market.
property market.We can state the following:

  • It is not possible to carry out Gift transfers between siblings at DLD – only parent/child or husband/wife relationship qualify.
  • It is not possible to carry out multiple Gift transfers on the one property in order to avoid the above rule (you can no longer transfer a property as a Gift from one sibling to the parent and then do a subsequent Gift to the other sibling).

BUT the exception is in relation to Gifts between individuals and companies. There are strict criteria to meet and you will need DLD approval but there are situations where “double Gifts” are possible. We trust those informations will help you in some way and we would be delighted to assist you further in this process. Simply contact julio@arabianescapes.com

Did you know that it is possible to transfer a few or the all of your Dubai property rights without paying the typical transfer fees at Dubai Land Department? Do you know how to change ownership details such as adding / removing a name from a Title Deed? What if you wish to gift a few or all of your property to a relative without exchanging funds? Here are the responses. From a lawful point of view, including or removing a name from a Title Deed is considered as a transfer of ownership thus the ordinary systems and expenses would apply at both the Developer’s office and Dubai Land Department. However, if the parties are relatives, it will go through a different process. This procedure is viewed as a “Gift” for the purpose of the transfer at the Dubai Land Department. An expanding number of owners appear to be carrying this out in the recent couple of years. The procedure itself is a generally straight forward one (if you are aware of the process) however a majority of agents and owners are not familiar with this process or either inexperienced with it.

Gift Transfer:

The “Hiba” process (Arabic for “Gift”) allows first degree relatives to transfer all or some part of their property rights by donation, grant or gift at the Dubai Land Department.

Eligibility?

The Dubai Land Department determines that a Gift transfer can just occur between first degree relatives – parent/children and spouse/wife relationship only. Attested and translated marriage certificated (for gifting to spouse/wife) and/or birth certificates (for gifting to children) must be acquired from the country of issue. All parties must be available or be represented by a Power of Attorney.

Reasons for Gifting a Property?

Most owners do such for inheritance purposes. In Dubai, this has never been a direct subject given the inclusion of Sharia Law. For non-Muslims specifically, this can cause emotional and financial challenges for families and in addition dispute and even legal cases with respect to rights to ownership. Accordingly, ask much the same as holding property in a JAFZA offshore organization trying to maintain simple inheritance process – especially the potential use of Sharia Law – many owners add their life partner or children to the Title with the expectation that it will simplify the succession issues in case something happens to either party. The point is to avoid the lawful vulnerability and ambiguity found in the old UAE laws and Sharia Law.

While the recent DIFC Wills and Probate Registry has presented some changes for non-Muslims with property assets in Dubai, it is obviously still untested. It is likewise more costly, many owners choose to gift their property rights now as opposed to making a will or abandoning it to the courts to choose.

Different purposes behind this change of ownership can incorporate the removal of one of the parties following a marriage divorce or separation settlement or maybe one party wishes to purchase the other out instead of having the property purchase by a third party.

Procedures and Costs

So you have decided that you need to transfer a part or full of your property ownership to your relative. What is the next step?

Keeping in mind the end goal is to finish the procedure, there are a couple of steps to follow. A Title Deed is required on the property. A Gift at DLD can’t be taken out on an off-plan unit. An Affection Plan (an official site plan) furthermore, Valuation Certificate should be obtain from the DLD. The Valuation Certificate decides how much the property is worth to permit the DLD to assess the suitable transfer fee. The Valuation Certificate for an apartment or villa costs AED 4,020 and takes 7-10 working days to process. The affection plan costs AED 270 (fee may vary without notice from DLD).

No Objection Certificate

Likewise with any property purchase/sold in Dubai, a No Objection Certificate (NOC) is additionally required from the Developer to demonstrate that the Developer has no objection to the transfer of ownership – there are no outstanding payments or debts due on the property. NOC expenses vary (from AED 500 to AED 5,000) and take 3-10 working days to process, depending on Developer. All parties should be available at this phase as with the final transfer at the Dubai Land Department. Power of Attorney can be utilized and is very prescribed.

Transfer Fees

Maybe the most important point  in relation to the transfer fees at the Dubai Land Department. As you might know whether you have any related knowledge in the Dubai property market, the current fees for the purchase/sale of a property in Dubai are 4% of the selling price (in addition to AED 580 administration fee). For a Gift procedure however, the transfer charges are fundamentally lower – just 0.125% of the property valuation in addition to AED 590 (minimum of AED 2,590). Likewise with sales/purchases, there are additional registration trustee charges of AED 2,000 or AED 4,000, depending upon whether the valuation is less or more AED two million.

For instance, if the property is esteemed at AED 1,200,000, the transfer fees to DLD for the Gift procedure will be AED 2,590 (least). The proportional transfer charges for a sale/buy would be AED 48,580.

Final Transfer of Title 

The entire procedure takes 3 to 4 weeks to finish. All parties would need to go in person in order to finish the Gift transfer, which means they would either need to make an extended visit to Dubai or frequent visits back
and forth to do the needful. The utilization of an experienced Power of Attorney is recommended. It will save time, money and inconvenience.

We can deal with everything from beginning to end so neither one of the party’s are required to attend. We can represent both the person giving and the person accepting the Gift. We can represent clients from
anyplace in the world with the peace of mind that their transfer of ownership is being dealt with both rapidly and professionally. We will deal with all the important steps to guarantee
the safe transfer of Title and to acquire the new Title Deed in the required name(s).

By any chance that you require any further information or help with this procedure, please contact. We would be more than happy to offer assistance!

2017 | Gifting Update

Siblings

Sibling are not viewed as first degree relatives for the purpose behind a Gift transfer. As of not long ago, it could be done by gifting to the parents and then process with a second gifting to the siblings. The DLD have however acquired another Directive (as of November 2016) which denies more than one Gift transfer occurring on a specific property.

Off Plan

A Gift transfer can likewise not occur on an off plan property. Keeping in mind the end goal to move ownership in this case, the procedure and charges would be the same as a typical transfer on Oqood or the Delayed Sale
archive. However, the property has not been pre-enrolled with the DLD (and 4% registration charges paid), you may be able to complete an inside process or name-change directly with the Developer. It is far-fetched in the
present market as all agreements are for the most part enrolled on signing the Sales and Purchase Agreement however, may be worth asking the question relying upon your particular conditions.

Mortgages

Gift transfers on contracts are less common however are possible. In such cases the Title records are held by the specific bank so they would either need to be paid in full or you would need their co-operation to do the
transfer of ownership. The fees are likewise higher with there being further charges to pay, including mortgage release fees to DLD (AED 1590), mortgage re-registration at DLD (0.25% of mortgage amount) & further trustee fees (AED 4000 as it is viewed as a different transfer).

Companies

Gift transfers for companies are more confused. Full legally attested and translated company documents must be presented and DLD approval is required. Very important to note is the necessity that the property owner(s) must be the same as the shareholder(s) of the company with a similar number of shares/ownership in order to do this as a Gift transfer.