Are you planning to give or receive a property as a gift in Dubai? Before you begin, ensure that it complies with Dubai’s 'Property Gifting' laws. It's a common practice among family, friends, and businesses in the UAE, it is referred to as ‘hiba’ in Arabic. While it is a common practice, following Dubai government's law is crucial, and that is what we aim to guide you through in this blog.
What is property gifting?
It is the legal process of transferring ownership of a property as a gift from one entity / person to another without buying or selling. Any form of real estate property can be gifted under Dubai’s law. This is typically done in cases of succession, as an expression of generosity, or for transferring real estate assets without any commercial interest. The legal process is set to simplify and declutter real estate succession and gifting in a legitimate manner. A lot of donors and senior family members arrange this process to avoid confusion or disputes.
The Legal process
The entire process of gifting real estate property is overseen by the Dubai Land Department as the legal entity in this matter. It regulates drafting a gift deed, getting the needed approvals and registering the transfer of the property at the Dubai Land Department.
The key requirements for a legal property gifting are listed below.
Eligibility: The relationship of the two parties who are transferring should be first-degree relatives. Another method that is accepted for gifting a property is between an individual and an off-shore company.
Residency: The two parties should be a UAE resident or a UAE citizen. Non-residents may require special permission from the Dubai Land Department.
Gift Deed: This should be legally drafted, notarized by a licensed notary public in Dubai with the signatures of both the donor and recipient.
No Objection Certificate (NOC): For certain types of relationships and the nature of the gifting, a NOC might be required from the relevant organisations. (developer, company or community)
Fees & Taxes: Although gifting a property overpasses many regular fees, a certain fee should be paid as service fees payable to the Dubai Land Department.
Inheritance & Succession: When a property is being gifted in a case of inheritance or succession, the Sharia Law may apply. Legal assistance is advisable to make sure the gifting is set as per the legal requirements.
Transferring property as gifts in Dubai helps the involved people in a few different ways. The primary reason for this type of transfer is to facilitate traditional family obligations and to express gratitude.
Since gifting property within the family, naming successors and expressing gratitude is a common practice, the Dubai Land Department regulated process facilitates these transfers to be done, without stressing the transfer as a general property transfer. Certain tax exemptions are made when a property is gifted therefore it is beneficial when gifting properties within the family and very close people. At the same time, these regulations assist the transfer to be legal and avoid any disputes in case of the donor’s demise.
Even if it has certain benefits over the regular property transferring, there are few factors that should be considered when gifting a property.
In certain instances, legal requirements such as certain documents are necessary to gift a property. Marriage certificates, birth certificates and other legal documents should always be brought forward to identify the relationship between the donor and the receiver which is not the case in regular property transfers.
General Cost of Property Gifting in Dubai
This form of property transfer requires lesser service fees in comparison to the regular property transfer when a property is purchased.
The usual 4% service fee of the property purchase value is reduced to 0.125% of the property value with the standard AED 580 for the Title Deed issued by the Dubai Land Department.
Which is an addition to the service partner fee that is calculated according to the property valuation. The registration fees
The Dubai Land Department has these list of criteria for this matter listed.
What are the documents you need to gift a property in Dubai?
For a property gifting between individuals you will require the following list of documents, but the Dubai Land Department may request additional documents if they require further clarification.
Title Deed of the Owner: To establish the legitimate ownership of the donor.
No Objection Certificate (NOC): Developer stating their approval of the transfer.
Property Evaluation Certificate: Property’s value is defined by the Dubai Land Department to be audited in the gifting process.
Birth Certificate: If the transferring individuals are children or parents, the birth certificates confirm the relationship.
Marriage Certificate: If the transferring individuals are spouses, the marriage certificate confirms the relationship.
Attestation Process: Certain documents require attestation from the Ministry of Foreign Affairs and the Emirates Embassy in their respective origin countries, the Ministry of Foreign Affairs in Dubai, and legal Arabic translation.
Original Passport, Visa, and Emirates ID: To confirm the identity of the transferring parties.
Succession Certificate: This document legalises the transfer in case of the donor’s demise or in a case of inheritance.
If the gifting involves companies, the following list of documents are required. But the Dubai Land Department may request additional documents if they require further clarification.
Title Deed of the Owner: To establish the legitimate ownership of the donor.
No Objection Certificate (NOC): Developer stating their approval of the transfer.
Property Evaluation Certificate: Property’s value is defined by the Dubai Land Department to be audited in the gifting process.
Trade License for LLC Company: For Limited Liability Companies, the trade licence is a key document.
Certificate of Incorporation: Companies in the Jebel Ali Free Zone or offshore locations should provide this.
Certificate of Incumbency: A requirement for offshore companies.
Certificate of Good Standing: Necessary for offshore companies.
Memorandum of Association (MOA) with Arabic Translation: This document should be available for companies.
Shareholder’s Passport, Visa, and Emirates ID: Personal identification documents of shareholders.
Power of Attorney and/or Board of Resolution: Depending on the nature of the transfer, a power of attorney and/or a board of resolution may be required.
This guide to property gifting in Dubai will give you an insight on the general information one has to know when giving away or receiving a property as a gift. But with specific cases, the Dubai Land Department will request more documents or further processes. But with a proper consulting agency by your side, the complexity of the regulatory factors can be dealt with ease, gifting should not be something that to be stressed over. ANAROCK Middle East offers the ideal real estate services in Dubai. Our expert agents, top quality services and our resilience will get you the smoothest transition for your property gifting process.