Things to Know About Gifting Property to Children in Dubai

Posted by POA Dubai on September 3rd, 2019

The primary point to note is that you can technically gift a property to whomever you wish. If you agree to give it away for free, there is no law or guideline that says you need to charge for it. This principle applies whether it’s being gifted to a close family member, a distant relation or a complete stranger.

In any case, it's essential to comprehend the diverse treatment by the Dubai Land Department of specific kinds of gift in terms of transfer fee. The key point here is that gifts to spouses and immediate family members attract a reduced transfer fee of 0.125% of the deemed value of the property. Whereas gifts to some other individual do not qualify for the minimum fee, and therefore attract the standard 4% transfer fee.

The DLD classes a close family relationship as being between spouses or between parents and their children. For instance, if you want to gift your property to your brother or sister, to whom you might be very close, you would not qualify for the reduced gift rate. Consider also the position of separation. If, as part of the separation settlement, you gift a jointly held property to your spouse but do so prior to the divorce being finalised, you would be entitled to the reduced 0.125% gift rate. If however you complete that transfer a week after the divorce has been finalized, you would become liable for the full 4% transfer fee.

So as to prove the immediate family relationship, the Land Department will need to be provided with evidence, which must be legalized if emanating from overseas. This evidence is generally in the form of a marriage certificate and passport copies of spouses, or a birth certificate and passport copies of children and parents.

The other situation where gifting is involved is where an individual wishes to transfer a property from a company he entirely owns, to himself (or vice versa). Here, if he can demonstrate that the ultimate beneficial ownership will be the same before and after the transfer, then the reduced rate of transfer fee may be applied by the Land Department.

If you want to proceed with a gift transfer you need to have a title deed and an affection plan for the property, apply for a valuation of the property by the Land Department, pay off any outstanding charges relating to the property, obtain an NOC from the developer, submit all of the documentation proving the relationship on the basis of which you are applying for the reduced transfer fee to be applied, then attend at the Registration Trustee Office, submit the documents, pay the transfer fee and wait for the new title deed.

Despite the fact that superficially property gifting process may look like an easy task, actually, it is a complicated process that involves several steps as well as certain legal issues for both donors and

In addition, if you are gifting property to children before they reach a legal age under UAE laws (i.e. 21 years old), then you need to take into consideration guardianship laws and their implications. Thus, it is of utmost importance to get sound legal advice from experts before Gifting Property to Children.