Gifting of property
Precision Legal: Expert Legal Services in Property Gifting and Estate Planning
At Precision Legal, we are a multilingual law firm specializing in both Sharia and non-Sharia law, offering extensive experience in wealth protection, estate planning, and succession matters. Our team is registered with the Indian Courts, DIFC Court and ADGM Courts equipping us with a thorough understanding of both UAE and Indian laws and their application to expatriates in the UAE. Renowned for our expertise in wealth preservation, we provide tailored legal solutions to meet the unique needs of our clients.
We understand that your needs are specific, and we take a personalized approach to crafting the necessary legal documents for you. As a niche firm, we offer the flexibility of fully digital services, including video conferencing, for your convenience.
What is Property Gifting?
Property gifting, known as “hiba” in Arabic, is a popular and advantageous method of transferring property ownership in Dubai. This voluntary transfer of property—either partially or in full—can occur between individuals, individuals and companies, or companies to individuals. The primary benefit of property gifting is succession planning and inheritance management, making it an attractive option for many. Additionally, property gifting is exempt from the standard 4% transfer fee in Dubai. Transfers between first-degree relatives (such as parents and children) qualify as gift transfers, leading to additional cost savings at the Dubai Land Department.
How Does Property Gifting Work in Dubai?
The Dubai Land Department (DLD) has specific rules governing property gifting, typically allowing transfers between first-degree relatives, such as parents to children or spouses. Other relationships may be considered under specific circumstances, but eligibility criteria must be understood.
The Process of Property Gifting in Dubai
Property gifting in Dubai is a cost-effective and strategic way to manage assets. Here’s a breakdown of the steps involved in property gifting:
- Title Deed Requirement: The property must have a valid Title Deed. Off-plan properties cannot be gifted at the DLD.
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Required Documentation:
> Affection Plan: An official site plan.
> Valuation Certificate: Issued by the DLD to determine the property’s value. - No Objection Certificate (NOC): A crucial document issued by the developer certifying no objections to the transfer.
- Payment of Transfer Charges: The donor is responsible for transfer fees, administrative fees, and registration trustee fees.
- Title Transfer Process: All parties involved must be present, and a Power of Attorney can be used to facilitate the process. Once all documents are submitted and fees paid, the trustee office will complete the transfer and issue a new Title Deed in the recipient’s name.
Documents Required for Property Gifting in Dubai
The Dubai Land Department requires specific documentation for a legitimate property gifting process. Here’s a list of what is needed:
- For Individuals:
- Title Deed of the Owner
- NOC from the Developer
- Property Evaluation Certificate
- Birth Certificate (for children or parents)
- Marriage Certificate (for spousal gifting)
- Attested documents: Birth and marriage certificates must be attested by the Ministry of Foreign Affairs and translated into Arabic.
- Identification: Passport, Visa, and Emirates ID of the individuals involved
- Succession Certificate: Required in case of inheritance transfer following the owner’s death.
- For Companies:
- Title Deed of the Owner
- NOC from the Developer
- Property Evaluation Certificate
- Trade License (for LLC companies)
- Certificate of Incorporation (for companies in free zones)
- Shareholder’s Passport, Visa, and Emirates ID
- Power of Attorney and/or Board Resolution (as needed)
Costs of Property Gifting in Dubai
When transferring property via gifting, the cost is significantly lower than standard sale transactions. The transfer fee is just 0.125% of the property’s value, with a minimum fee of AED 2,100, plus AED 580 for the title deed. Registration trustee fees range from AED 2,100 to AED 4,200 depending on the property’s valuation. This is a notable cost-saving compared to the traditional 4% transfer fee associated with property sales.
Eligibility for Property Gifting Under UAE Law
- Family Transfers: Property gifting is typically available to first-degree relatives (parents and children), but transfers between siblings are not permitted. Property owners may gift property to certain family members to bypass Sharia law’s inheritance distribution, streamlining succession. For instance, a husband may gift his property share to his wife to avoid his siblings inheriting it, or to remove a spouse from the title following a divorce.
- Offshore Companies: If property owners wish to avoid Sharia law’s application but retain ownership, they may transfer the property to an offshore company. The property can then be managed through the company's shareholders, allowing for indirect ownership.
Advantages of Gifting Property in Dubai
Gifting property in Dubai offers multiple benefits, such as:
- Preventing Inheritance Disputes: Property gifting allows you to control the distribution of your assets, circumventing Sharia law inheritance rules.
- Establishing Ownership in Advance: Gifting allows a chosen beneficiary to assume ownership early, preventing complications if the owner passes away intestate.
- Cost Savings: Gifting reduces transfer costs significantly. With a standard sale transaction incurring a 4% fee, gifting costs just 0.125% of the property value (minimum AED 2,100). Gifting within the immediate family provides the most savings.
Why Legal Assistance is Essential for Property Gifting in Dubai
While property gifting may seem straightforward, it involves intricate legal processes. Here’s why legal assistance is vital:
- Understanding Local Laws: Dubai's property laws differ from other jurisdictions. Legal experts ensure compliance with local regulations.
- Document Expertise: A lawyer ensures all documents, including the gift deed and title deed, are accurate and legally sound.
- Due Diligence: Lawyers conduct thorough checks to ensure the property is free of disputes or encumbrances.
- Protection and Representation: In case of disputes, legal experts protect your interests and represent you in legal proceedings.
- Estate Planning Guidance: Lawyers assist with integrating property gifting into a broader estate planning strategy.
- Peace of Mind: Having legal professionals handle the transfer process ensures compliance and minimizes future legal risks.
How Precision Legal Can Assist You
Though the property gifting process may appear simple, it can become complex without proper legal guidance. At Precision Legal, we provide expert legal representation for property transfers, including gifting to family members or companies. Whether you’re gifting property to your children, spouse, parents, or business, our team ensures a smooth and legally compliant process. Contact us today for assistance with your property transfer in Dubai.
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