Transferring real property through the act of gifting stands as one of Dubai’s most cost-effective strategies within estate planning, particularly in the context of succession and inheritance planning. This method holds a distinct advantage, namely the exemption from the standard 4% transfer fee typically applied to all property transactions in the UAE. In Dubai, the notion of gifting property is widely recognized and accepted. When it comes to making a payment for the transfer fee at the land department, any transfer occurring between first-degree relatives can be categorized as a gift transfer. These gifts are sometimes referred to as “heba,” the Arabic term for “gift.” It is imperative to grasp the criteria defining a property gift transfer in Dubai and the associated expenses and time commitments entailed in the transfer process.
What does a HEBA grant of property entail?
By Islamic law, Heba signifies the unrestricted and immediate conveyance of assets from one individual to another without any form of compensation or reservation. In the United Arab Emirates (UAE), granting real estate involves transferring property among first-degree relatives, which includes parents, children, and spouses. Unlike standard property transfers, which require a 4% transfer fee payable to the land department, gift transfers are exempt from this fee. Instead, there is a nominal 0.125% transfer charge due at the time of the transfer. This substantially reduced fee facilitates the seamless transfer of property between first-degree relatives, alleviating concerns about financial implications.
What does HEBA Granting Property entail in the UAE?
Legal Provisions Governing HEBA Granting Property in Dubai
If you own a property in Dubai and wish to present it as a gift to your immediate family members, you must adhere to the guidelines outlined in Executive Council Resolution No. 30 of 2013, which approves the fees established by the Land Department, known as the “DLD Fees Resolution.”
Concerning property registration and transfer, the Dubai Land Department (DLD) imposes fees, not taxes, as specified in Article 2 of the DLD Fees Resolution:
“Under this Resolution, fees for registering real property dispositions in the real property register, encompassing completed, under-construction, or off-plan real estate, as well as fees for services offered by the Department, are endorsed.”
To bestow a property in Dubai upon your immediate family members, you must remit a fee to the DLD, equivalent to 0.125% of the property’s value, with a minimum charge of AED 2,000. Article 3(5) of the DLD Fees Resolution further outlines the following regulations about the payment of fees stipulated in Article (2) of the Resolution:
Unless otherwise specified, the recipient of the rights shall be responsible for covering the fees associated with:
1. Registering contracts for land use and expansion under another person’s ownership.
2. Transferring a portion of real estate from an heir to other heirs, making gifts, establishing wills, facilitating mortgages, converting debts, establishing family endowments (Waqf), and recording the rights of tenants’ heirs.
To grant property as HEBA to an immediate family member, such as your mother, father, spouse, or child, in compliance with the aforementioned legal regulations, you must pay the DLD either 0.125% of the property’s value or a minimum of Dh 2,000, whichever amount is greater.
However, if you opt to sell the property to a first-degree family member, another individual, or a corporation, you must pay a fee equivalent to 4% of the contract’s sale value.
Procedure for Granting Property in the UAE through HEBA
The process of granting real property in the UAE follows these steps:
1. Initiate the evaluation report:
The property owner must commence by paying AED 4,020 to the land department to obtain an evaluation report for the property’s value.
2. Obtain a No Objection Certificate (NOC):
The property developer should furnish the owner with a No Objection Certificate (NOC).
Both parties, the owner and the developer, need to provide formal documentation in their respective native countries to establish their first-degree relationship. For instance, if the owner is the donor’s parent, a birth certificate is required to confirm the relationship.
3. Document Authentication:
Any such document should be initially authenticated and notarized in the owner’s country of origin before submission to the UAE Ministry of Foreign Affairs.
Furthermore, the Ministry of Justice is responsible for translating the document into Arabic and affixing the necessary stamps.
4. Transfer of Property Ownership:
With the original documents mentioned above in hand, you can proceed with the property transfer process by visiting the trustee’s offices.
What is the cost associated with property gifting in Dubai?
A 0.125% Gift Transfer A property fee is required to be paid at the time of transfer.
Additionally, there will be a payment for a property evaluation that needs to be made to the land department.
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Furthermore, you should consider the cost of obtaining an official name title deed.
Once all these payments have been settled and you have submitted all necessary documents to the trustee’s office, you will need to await formal confirmation that the transfer has been completed.
How long does the process of Heba-granting property take in Dubai?
The duration of the property transfer procedure can vary depending on the specific conditions. It is advisable to be prepared for a waiting period ranging from one week to a month for the process to be finalized.
Engaging the services of a property lawyer in Dubai can be highly beneficial throughout the entire procedure. They can ensure that you have all the required documentation and prevent any unnecessary delays or expenses resulting from incorrect or incomplete applications. For more information regarding Heba Granting Property in the UAE, please feel free to reach out to us.