The gift or “Hiba” as mostly known in Arabic, is the voluntary transfer of property ownership, from the donor to the donee, without remuneration. So, can property be gifted in Dubai? Yes, it is allowed under UAE laws, such as the Law No.14 of 2017 Regulating Endowments and Gifts in the Emirate of Dubai, the process is held according to DLD’s (Dubai Land Department) specific provisions and processed accordingly.
Property gifting is generally allowed among first degree family members, in the aims of determining assets succession, during one’s life. It is also considered a financially preferred option as it offers lower transactional rates than that of the sale agreement. This article explains who can gift property in Dubai, the legal conditions for property gifting in Dubai, and states who can be involved with such process.
Who Can Gift & Receive “Hiba”?
An individual with a clear title deed owning a freehold property is entitled to perform the gifting within the scope of the law; that being said, both nationals and expats are given this right under certain provisions.
Despite having plenty of similarly applied rules, there are remarkable distinctions, such as imposing extra restrictions on expats, depending on the type of ownership, residency status, and relationship degree. While nationals have no limitations on ownership, expats are only allowed to enjoy property ownership in certain designated freehold areas or zones, and in some cases for limited time periods.
Under the UAE’s civil law, and the previously mentioned law of 2017, property gifting is only legalized when it takes place between first degree relatives. The spouse, offsprings, and parents are exclusively listed for being eligible to receive gifted properties, it could also be authorized to arrange the gifting from a company owned by the person and vice versa. This process is often used to escape inheritance and sharia laws and attempt to retain indirect control of the property.
Siblings, aunts and uncles, and nieces; despite being close family members, are excluded from the range of first-degree family members entitled for property gifting.
Want to learn how property gifting works specifically among family members in Dubai? Check out our detailed guide on gifting property to family members in Dubai for rules, procedures, and legal insights.
Conditions for property gifting:
Article (12) of the Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai” stated that Endowed Property must:
1. be legally usable without being consumed.
2. be owned by the Donor or be under his right of legal disposition, and the Donor must not be prohibited from disposing thereof; and
3. be free from encumbrances.
These conditions are crucial for the legal procedure to gift property in Dubai. Donor should be the owner and display proof of his title deed if it’s a ready property, and an initial contract of sale if it’s an off-plan property.
DLD Rules on Property Gifting
DLD requires a list of documents for the gifting procedure, in addition to a valid title deed displaying proof of ownership for the property, and the relationship proof and IDs for donors and recipients, there are specific considerations to keep in mind, such as:
- It is important to emphasize that only ready properties with clear title deed can be gifted. When it comes to off-plan properties or mortgaged, they can only be gifted if the developer issues an NOC, declaring his approval of ownership transfer.
- Regifting the originally gifted property is prohibited by law. If a property has already been gifted once, the next transfer must be through sale-purchase.
When DLD may reject a gifting request
In case the DLD detects a title deed defect, incomplete or invalid documents, non-compliance with its set forth regulations, fraud suspicion, as in forged signatures or if the donor is mentally incompetent, then the property gifting request may be rejected; and the matter then gets referred to the courts.
Financial Saving Features:
The Dubai Land Department (DLD) is an authorized entity regarding real estate registration and transfers. DLD imposes a total of four percent of the whole property’s value upon registration due to property sale transfer, in addition to the title deed fee.
In contrast, gift transfers require a drastically lower transfer fee of 0.125% of the property’s value, with a minimum of two thousand Dirham, in addition to trustee and administrative fees. Thus, property gifting promotes an affordable option for property owners.
Final Thoughts:
In conclusion, Can property be gifted in Dubai? Yes, it is fully legal and cost-effectiveroute for transferring ownership to first-degree relatives or corporate entities under well-structured estate planning scenarios.
Property gifting only includes administrative and transfer fees, family members’ gifting is simpler than gifting a property owned by a company, as the latter involves additional steps such as share transfers, and corporate approvals.
Want to learn more about the detailed legal procedure, fees, and compliance for family property gifting in Dubai? Check out our main pillar blog on family property gifting in Dubai for a complete guide.
FAQs:
Is it possible to only give a share of the property and not on whole?
Yes, a percentage of the property to a qualified first-degree relative, the new title deed will then display joint ownership.
Can the gifted property be retained later?
No, once the gift transfer is registered and the title deed is issued in the donee’s name, the donor then loses ownership rights. In order to reverse such action, the beneficiary would need to gift it back to the original donor.
Is there a minimum property value to qualify for gifting?
The law didn’t specify a minimum property value for gifting, even low-value properties can be gifted. However, the minimum DLD fee of 2000 AED still applies upon the property transfer, regardless of the property’s value.
What if one of the gifting parties resides abroad?
The gifting process can still be completed, but the absent party should appoint an attorney to represent him using a POA that specifically authorizes gifting. POA is to be notarized and attested for UAE use. POA.ae can assist with issuing and attesting a POA from abroad.
Can property gifting be used to avoid paying the transfer fees of sale?
No, the DLD monitors gift transfers strictly. Upon the attempt of disguising the sale as a gift, penalties may arise, cancellation, and legal issues.
If you wish to gift your property in Dubai, whether you are present or require a POA to proceed, we are delighted to assist you with the required steps to be taken.
