The Art of Property Gifting in Dubai Posted on October 27, 2023 by badmin In the Emirate of Dubai, first-degree relatives, such as parents, children, and husbands and wives, can transfer property among themselves, constituting a gift transfer. Recent rule changes at the Land Department, however, have prohibited property transfers between siblings. In cases where a property transfer qualifies as a gift transfer, the standard 4% transfer fee, typically paid to the Land Department during the property transfer, is not applicable. Instead, a nominal transfer fee of 0.125% is due at the time of the transfer. This reduced fee significantly simplifies the cost-effective transfer of property between first-degree relatives, eliminating the need to consider substantial cost implications. The process of gifting a property in the Emirate of Dubai is as follows: The owner must pay AED 4,020 to obtain an evaluation report on the property’s price from the land department. The owner and the donee must obtain a No Objection Certificate (NOC) from the property’s developer. Both parties must prove their first-degree relationship by providing an official document issued in their respective home countries. For example, if the owner is the father or mother of the donee, they must provide a birth certificate as evidence of their relationship. This document must be legalised and notarized in their home country and then submitted to the Ministry of Foreign Affairs in the UAE. In addition, the document should be translated into Arabic and receive a stamp of approval from the Ministry of Justice. Once the original documents are in hand, you can complete the property transfer by visiting the Trustee offices. The cost of a gift transfer of property in the Emirate of Dubai includes the following: The minimum gift transfer fee payable to the land department is AED 2000. However, if the property’s value exceeds AED 500,000, the transfer fee payable to the land department is 0.125% of the property’s overall value, based on the evaluation certificate issued by the land department. A fee of AED 580 for the name title deed. A fee of either AED 2,000 or AED 4,000, depending on the property’s evaluation, payable to the trustee offices. Once you have submitted the required documents and paid the associated costs at the trustee office, the trustee office will facilitate the property transfer, resulting in the issuance of a new title deed in the name of the donee. Once the Land Department issues the new title deed, the donee will officially assume ownership of the property. Do I need a Power of Attorney for a gift transfer? A Power of Attorney is not necessary for a gift transfer in the Emirate of Dubai if both the owner and the donee are present during the transfer. However, our partner, Vision Conveyancing, is pleased to offer its services as your Power of Attorney through a special POA to facilitate the entire gift transfer process in the name of the donee. They provide a comprehensive end-to-end service for gift transfers, ensuring a swift and efficient process. VC is committed to delivering a streamlined and stress-free transaction experience for their clients, starting from the initial contract signing and concluding with the property ownership transfer. If you have inquiries, you can reach out to them at info@visionconveyancing.com. Property gifting in Dubai serves as a legal and efficient means of transferring ownership while upholding the city’s tradition of generosity and openness. Dubai, as a thriving global metropolis, continuously draws investors and residents worldwide, making property gifting an exceptional way to embrace the Dubai lifestyle and partake in its prosperity. When contemplating property gifting, it’s crucial to seek guidance from legal experts and real estate professionals. In Dubai, the process of property gifting embodies the principle of “giving is receiving,” enriching both the giver and the recipient.
Frequently Asked Questions About Selling Your Property in Dubai Posted on October 21, 2023 by badmin Selling a property can be a source of considerable stress, but our aim is to ensure that your selling experience is as smooth and hassle-free as possible. It’s important to note that not all costs and processes will necessarily apply to you, particularly if you are selling a property without any outstanding financial obligations. Documents Needed When Selling a Property: To sell your property, you will require a title deed for the property obtained through registration at the Dubai Land Department. You will also need a No Objection Certificate (NOC) from the developer to confirm that the property is free from any liabilities, such as outstanding mortgages, unpaid installments, or service fees. Your original passport and any other documents and receipts related to the original sale and the current state of the property will be required. If your property is rented, you will need a copy of your tenancy agreement, and if you have sold it through a registered Real Estate Agency, a signed seller agreement known as Form A will be needed. Is it necessary to hire a lawyer when selling my property? In many places around the world, it’s common to involve a lawyer when selling property. However, in Dubai, the sale process often doesn’t require legal representation. Dubai uses a standard electronic contract, known as Form F or MOU, provided by the government. The transaction agency typically oversees the management of these documents. You do have the choice to hire a lawyer or conveyancing company if you prefer Can I sell my property if it is currently tenanted? If so, what is the notice period required if I want the tenants to vacate the premises? Having an active tenancy contract on your property does not prevent you from selling it. When selling, you will typically include a provision in the agreement with the buyer to transfer the existing tenancy to them. The buyer will inherit the terms of the tenancy and take over as the new landlord. You may need to consider refunding any future rent for the remaining lease period and transferring the tenant’s security deposit to the buyer. As per Law 33 of 2008, Article 25, a landlord can request eviction upon the expiration of the tenancy contract if the property owner intends to sell the leased unit. However, the landlord is required to provide the tenant with a 12-month notice before the designated eviction date, and this notice must be delivered through a notary public or registered mail. What is the cost of registering my title deed? In the case of off-plan sales, the developer manages the land registration process in tandem with the initial property purchase. The registration fees amount to 4% of the purchase price, and this cost is VAT-exempt. In the case of secondary sales, the 4% fee, referred to as the transfer fee, is payable during the transfer of ownership and can be divided between two parties: the seller and the buyer. Whether you’re a seasoned property seller or a first-time seller in Dubai, manoeuvring the real estate market can be a complex yet rewarding journey. We believe that the insights and information shared in this blog have proven valuable in your mission to sell your property. Should you have any additional questions or require assistance, our team is readily available to support you at every stage. Your property sale in Dubai is more than just a transaction; it represents a significant milestone in your life’s journey, and we are here to ensure it proceeds smoothly and successfully. We appreciate your consideration in choosing us as your trusted partner and extend our heartfelt wishes for your success in your property-selling endeavours.
Mandatory Life Insurance for Your UAE Mortgage Posted on October 18, 2023 by badmin When you acquire a mortgage in the UAE, it’s essential to be aware that life insurance is mandatory; hence optional when buying with cash. Whether you’re fully informed about it or not, life insurance is an integral part of your home loan. Mortgage life insurance is specifically designed to safeguard your mortgage debt in the event of your passing. This ensures that your family can continue to enjoy the property without the burden of mortgage payments. Most banks typically charge this insurance on a monthly basis, independent of your loan or through an increase in the interest rate to cover the monthly insurance cost. However, certain banks may request upfront payment, while others might incorporate the insurance premium into your interest rate. Alternatively, you have the option to explore more cost-effective options, such as procuring life insurance from an independent insurance company. Some banks may accept life insurance policies from external providers, but each bank retains the pre-rogative to mandate insurance under their specific program. In the case of married couples where the property and mortgage are solely in the name of the working partner, it’s not obligatory for the non-working spouse to have life insurance. However, most advisors recommend at least partial coverage. If both spouses are on the property title, some banks insist that all loan applicants are covered, regardless of their income source. It’s imperative to factor life insurance premium payments into your ongoing expenses when managing a mortgaged property. For non-smokers under the age of forty, life insurance costs are relatively affordable for an average loan. Nevertheless, expenses can escalate significantly as you age, experience health issues, or require higher insurance coverage. Full disclosure of any pre-existing medical conditions is a legal obligation. Failing to disclose such conditions could lead to the denial of your claim, potentially depriving your family of the insurance benefit when they need it the most. Critical Illness Cover (CIC) Additionally, life insurance advisors often suggest considering Critical Illness Cover (CIC). CIC can provide coverage for your mortgage payments in the event of a serious illness that renders you unable to work. While CIC is not mandatory in the UAE, it is advisable, especially if you are beyond your twenties. Having adequate CIC insurance can cover your loan payments for a few years, giving you the time needed to recover or sell the property if necessary. Cost of Life Insurance Life insurance premiums are an ongoing cost of owning a mortgaged home, and they should be factored into your budget. For non-smokers under the age of 40, life insurance costs are relatively low. However, costs increase significantly with age, health condition, and the insured amount. It is crucial to disclose any pre-existing medical conditions to your life insurance advisor to avoid potential claim rejection. For instance, on a AED 1,000,000.00 mortgage, life insurance can cost as little as AED108 per month. Factors Affecting Costs Various factors can affect the cost of your life insurance, including your age, occupation, medical history, and even your country of origin. People from Western countries typically enjoy lower premiums. Smoker status can also substantially impact premiums; if you’ve consumed nicotine in any form in the last year, you may be considered a smoker. Bank In-House vs. External Policies Banks often offer in-house life insurance policies underwritten by major international insurers. However, in some cases, obtaining an external policy can be more cost-effective, especially for young and healthy individuals. Some banks allow you to use an external insurance policy, while others do not. External policies also have the advantage of portability, meaning you can transfer them to another property or bank in the future. Pre-Paid Life Insurance Policies Certain UAE banks may require pre-payment of a 25-year life insurance policy, adding the cost to your loan. While this eliminates monthly premiums, it significantly increases the total mortgage amount, resulting in higher interest costs over the life of the loan. It’s important to note that if the loan is terminated prematurely (e.g., selling or refinancing), you may receive only a partial refund of the pre-paid policy. Decreasing Term vs. Level Term Policies Some life insurance policies have decreasing sums insured over time as your mortgage balance decreases, known as “Decreasing Term” policies. These are typically designed for mortgage protection and are more cost-effective. In contrast, “Level Term” policies maintain a constant sum insured throughout the policy term and are suitable for broader family protection. Property Insurance Vs. Content Insurance Furthermore, when acquiring a property through bank financing, the bank typically requires the protection of the investment through property insurance. This insurance is essential to cover potential losses related to building costs and significant maintenance. It is a mandatory requirement when obtaining mortgage finance, ensuring the property’s safeguard. However, when purchasing a property with cash, property insurance becomes advisable rather than obligatory. The decision to secure this insurance rests with the buyer. In contrast, contents insurance remains entirely at the discretion of the occupier. If an occupier chooses not to procure any insurance and an unfortunate event occurs, such as damage or loss to personal belongings, the responsibility for repair or replacement falls squarely on their shoulders.
