Guide To Property Gifting in Dubai – Steps, Cost, Restrictions Explained
Summary about Property Gifting in Dubai
- Property Gifting is a voluntary transfer of your property on behalf of another person without taking any consideration.
- There are no sale proceeds in Property Gifting, and DLD fees are only 0.125 % from the market, while during the transfer, there are sales proceeds and DLD fees equal to 4% from the market price.
- Gifting is restricted between 1st degree relatives, who are parents and children, and spouses, per Dubai Legislation. Additionally, if you own a company, you can gift company property to yourself and vice versa.
- The Property Gifting is restricted to ready properties with clear Title Deed only, off-plan properties upon receipt of NOC from the developer, and Mortgaged properties upon receipt of clearance or approval from the Bank.
- Double gifting of the same property is prohibited, and compliance with this rule is strictly regulated by DLD.
- A property linked to a Golden Visa cannot be gifted.
- Gifting costs include 0,125 % from the current market price of the property, Trustee Fees, and other admin fees
- Gifting is a good inheritance distribution tool during a lifetime.
What is a property gift transfer?
A property gift transfer (also known as “a property grant”, or “a Hiba”) is a voluntary transfer of property from one person to another person, without consideration. The person who grants/gifts the property is referred to as “a Donor” while the person in receipt of the property is referred to as “a Beneficiary”.
How is a gift transfer different from a property sale transfer in Dubai?
The main difference between a property gift transfer from a sale-and-purchase transfer is that there is no requirement of consideration (i.e., payment of sale proceeds) in the gift transfer. Moreover, in the case of property gifting, the Dubai Land Department (DLD) fees are equal to 0.125% of the property value, as opposed to the sale and purchase transfer, where the DLD fees are equal to 4% of the property value. Thus, the government fees for the gift transfer are significantly less than the sale and purchase transfer.
To whom can you gift your property in Dubai?
In Dubai, you can only gift your property to a “first degree relative” or to a company owned by you, or vice versa.
Under the local legislation, the definition of “first degree relative” includes:
1. Parents
2. Children, and
3. Spouses. It is worth noting that relationships between siblings, and between stepchildren and stepparents, do not qualify as “first-degree relatives” for a gift transfer in Dubai.
In other words, you would be able to gift your property only to your parents, spouse, or your children, while you would not be able to grant your property to your siblings, stepparents, stepchildren, or any other relatives.
Moreover, you can also gift your property in Dubai to a company that is owned by you, or vice versa, from your company to yourself. Only specific companies registered in the UAE are allowed to own properties in Dubai.
The list of documents required for Property Gifting transfer:
- Title Deed
- NOC for some Ready Properties and NOC for all Off-Plan Properties
- Clearance or Approval for Mortgaged Properties
- Birth Certificate or Marriage Certificate, fully attested and translated into Arabic
- Commercial Documents fully attested and translated into Arabic
- Evaluation Certificate
What are the restrictions?
It is important to underline that only ready properties with a clear title deed can be gifted, and an off-plan property can only be gifted if the developer issues an NOC.
Gifting a mortgaged property requires approval or clearance from the mortgagee bank. In fact, before the gift transfer, the Donor’s bank requires either to settle the loan be settled in full or the bank can transfer the mortgage be transferred to the Beneficiary (i.e., receiver). If the Beneficiary meets the bank’s financing requirements.
Moreover, gifting the property two times (aka “double gifting”) is not permitted to prevent the possible misuse of the “first degree relative” rule.
In accordance with a Directive introduced in November 2016, the Dubai Land Department is unlikely to authorize more than one gift transfer on any property in the Emirate. This means that if a property has been gifted once previously, it cannot be gifted again, and the next change of ownership transaction on that property will likely be a sale-and-purchase transfer.
Finally, any property linked with any Investor Golden Visa cannot be gifted unless that Visa is cancelled. Since the Golden Visa blocks the Property from any property transactions, whether it is gifting or sale.
What documents will I need?
The required documents for property gifting in Dubai vary depending on whom you are going to grant your property to and the type of property.
Primarily, you need to have a clear title deed to prove that the property in question does indeed belong to you. Bear in mind that an off-plan unit can only be gifted if the developer issues an NOC.
Moreover, you will need to provide the authorities with proof of a “first degree relationship” between the donor and the beneficiary of the property. In a child-parent relationship, this can be a birth certificate. In a husband-wife relationship, it is required to provide a marriage certificate and, in some cases, a letter from the Dubai Courts confirming that the pair are still in a spouse relationship. It is important to note that any birth certificate and/or marriage certificate issued outside of the UAE has to be duly legalized and translated into Arabic.
If the Donor and or the Beneficiary is a company or a legal entity, constitutional documents (e.g., trade license, certificate of incorporation, share certificate, incumbency certificate, Memorandum and Articles of Association, etc.) of such company or companies would also be required to establish the ultimate owners and the first-degree relationship. Please kindly note that any corporate documents issued outside of the UAE must be duly legalized and translated into Arabic.
During the process, the property must be valued by DLD to establish the government charges, and various approvals and consent letters would be required from a developer, facilities management company, and concerned authorities, depending on the property being gifted and the type of property gifting.
How much will it cost?
The total price for the whole process will depend on the type, value, and specific features of the property. Nevertheless, compared to the sale-and-purchase transfer fees, the property gifting carries a far lesser transfer fee paid to the Dubai Land Department.
In the gift transfer, you are only required to pay 0.125% of the current official value of the property, or its share, being gifted. In addition, you will also incur some other costs payable to the real estate trustee’s office for property registration and issuance of the new title deed. Please contact us to get a free cost estimate for your property gifting.
Why to gift your property in Dubai?
Gift transfers are very popular in Dubai for inheritance and succession planning purposes. It gives you full liberty to transfer your property to your loved ones as per your wishes during your lifetime. Otherwise, after your lifetime, all your assets, including real estate, will be divided between the legal heirs by the court in accordance with the applicable laws. Unless there is a Will in place for non-Muslims, the court can distribute your assets between extended family members, which may not necessarily be as per your wishes.
Find out here how you can Protect Your UAE Real Estate Through Gifting.
Do I need to hire an expert for a gift transfer?
It is worth noting that although it may not seem a complicated transaction, the gift transfer can be rather lengthy and could take up to 6 weeks to complete. So, if the Donor and/or the Beneficiary are not able to attend the necessary formalities to complete the gift transfer, it is advisable to hire an expert in this field to handle the whole process on your behalf.
We specialize in property gifting services and offer professional assistance for:
- Gifting Property to Children
- Gifting Property to Parents
- Gifting Property Between Husband and Wife
- Gifting Property to Company (or vice versa)
You may find out more about ‘Why Do I Need To Appoint An Expert For Property Gifting’ here.
Can I issue a POA for property gifting online?
POA for Property Gifting can be issued online, both for residents and non-residents. There is no need to visit Dubai for this purpose, or no need to reach out UAE Consulates abroad for these purposes. The process is completely online, from collecting the documents and payment to getting the Notarized copy. You can reach out to POA.ae, and consultants can advise you on the requirements, process, and fees.
Frequently Asked Questions about Guide to Property Gifting
1.Can I gift off-plan property?
Yes, off-plan properties can be gifted if there is an NOC from the Developer
2. I want to gift my property to my Grandson. Please advise?
Dubai Property Gifting is possible only between 1st degree relatives like parents, kids, and spouses, or from the company owner to himself and vice versa.
3. How long does it take to gift a property?
It may take 4-6 weeks due to the long legalization process of personal documents, such as birth certificates, marriage certificates
4. I have two properties, and one of them is linked to a golden visa. Can I gift that property linked to the golden visa?
Properties linked to a golden visa cannot be gifted unless the visa is cancelled.
5. We are a foreign company and own a couple of properties in Dubai. Can we gift these properties to its shareholders?
Yes, providing the commercial documents are fully attested and translated into Arabic, the transfer of the gift from the company to its shareholders can be completed
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