Gifting real estate in Dubai

Quite often, investors and buyers in the UAE are interested in the opportunity to transfer their property to a third party. This usually refers to the transfer of ownership on the basis of a gift, and not a commercial transaction on market terms. When it comes to inheritance and succession planning in Dubai, one of the most cost-effective tools is property donation. In this article, we will discuss the requirements of the Dubai Land Department, which governs the donation of real estate in the UAE, as well as the related process and the cost of transferring property.

What is a donation of real estate in Dubai, and what is it for?

Gifting real estate in Dubai is a very common practice of donating property. Mainly due to the benefit of being exempt from the 4% commission that is charged on all property transfer transactions in the UAE. Any transfer of property between relatives can be considered as a donation on a gratuitous basis. According to the rules, you can donate your property to relatives of the first degree of kinship - children, parents and spouses. If the owner did not leave a will, then a gratuitous transfer allows for easier succession planning. For example, a husband may transfer ownership of his property to his wife so that his siblings cannot inherit the share after his death. Also, the owner can transfer his property to the ownership of the company and vice versa. This will help to maintain ownership of the property while avoiding the application of Sharia law.

A real estate donation agreement in the UAE is one of the ways to prevent future problems with the division of inheritance under Sharia law. An individual or a company that donates its property is referred to as a “donor” in the Dubai Land Department, and the recipients become a “donee”. In this case, the state duty is significantly less than when selling real estate - instead of the standard 4%, the real estate donation tax in the UAE will be only 0.125% of the estimated value of the property or at least 2,000 UAE dirhams. Thus, a transfer of property to a spouse or any immediate family members will incur a significantly lower transfer fee, while a gift to an outsider outside the immediate family is subject to a higher standard fee.

How to draw up a real estate donation agreement in the UAE?

To carry out a donation of real estate, the Dubai Land Department requires certain documents from the participants in the transaction. This list usually includes a marriage certificate and copies of spouses' passports, or birth certificates and passports of children and parents, or company licenses. In general, individuals need to submit the following:

• Title of owner;
• Certificate of No Objection (NOC) from the developer;
• Real Estate Appraisal Certificate from the Dubai Land Department;
• Birth certificate certified by the Ministry of Foreign Affairs of the country of origin, the UAE Embassy in the country of origin, the Ministry of Foreign Affairs in Dubai, with a legal translation into Arabic;
• Marriage certificate certified by the Ministry of Foreign Affairs of the country of origin, the UAE Embassy in the country of origin, the Ministry of Foreign Affairs in Dubai, with a legal translation into Arabic;
• Original passport, visa and Emirates ID;
• Certificate of the right to inheritance (in case of death of the owner and transfer of inheritance).

What taxes do I need to pay when donating real estate in Dubai? In addition to a fee of 0.125% of the total value of the property, there will be a fee of AED 580 for the title deed. You will also need to pay a fee of AED 2,000 or AED 4,000 to the trustee, depending on the valuation of the property.

How to donate real estate in Dubai with UAE Assets?

Although at first glance the transfer of real estate looks simple, in reality the process can be more difficult. It is necessary to take into account many factors, collect and execute documents, which can become a problem. Also, difficulties may arise if the owner of the property (donor) or the recipient (donee) cannot attend all the procedures necessary for donating real estate. Having a UAE Assets agent to advise you throughout the process will allow you to quickly and seamlessly complete the property transfer process. If you have any questions regarding the donation of real estate in the UAE and Dubai, then our specialists will be happy to provide you with the necessary support. To contact our agency, use the contact phone number or leave a request on our website. We will contact you as soon as possible and answer your questions.