Property transfer fee to double from Sunday

The Dubai property transfer fee will double from Sunday next week.

Arabian Business revealed exclusively on Thursday that the tax will increase from 2 percent to 4 percent of the sale price for all properties, except the first direct sale from a developer to buyer, which will remain at 2 percent.

Industry insiders believed the change could have taken affect as early as this weekend but it has now been confirmed for Sunday.

The short timeframe for buyers and property agents to prepare means some deals are expected to fall over, particularly those involving mortgages, as buyers and sellers haggle over who will pick up the increased bill, which must be paid in cash.

By law, the property transfer fee is paid equally by both buyer and seller, but industry spokespeople said in practice, the buyer usually ended up paying the full amount.

The increase to 4 percent means the charge on a AED2m home would double from AED40,000 to AED80,000.

The amount must be paid in full, in cash and cannot be incorporated into a mortgage.

The increase is intended to stop the rapid on-sale of new and off-plan properties, which has been blamed for much of the escalation in Dubai property prices.

“[The] idea is to curb flipping. It’s a good move. Keeps end users and longer term investors in the game,” a well regarded Dubai developer told Arabian Business, adding: “Gets rid of brokers who put down checks [sic] against properties hoping to find buyers quickly.”

The larger transfer fee should make it less attractive for buyers to purchase from speculators, but it also has the potential to affect end users.

A property sold by an end user – such as someone who has lived in the home for several years and wants to upgrade or leave Dubai – to another end user still would attract the higher transfer tax.

At least one real estate agent said it would likely encourage end users to remain in their property for longer.

With more than $6bn worth of property and land transferred in the year to July, according to Dubai Land Department figures, the increased fees could also see government coffers significantly enhanced.

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Posted by: Baig

Too short notice specially banks were not able to cope up the rush of issuing Manager's Cheques. Bank's printers went out of order Land department should consider extending for one week at least for properties purchased from developers .This way they can collect more funds quickly since people may now delay in registering their properties for the increased charges

Posted by: Cathy

Apparently it has been confirmed, regardless of whether purchases are direct from the developer or not, the registration or transfer fees are 4%. The system that developers use, will only allow 4% as of yesterday. Developers have confirmed this with Dubai Land Department and the system has no room for a 2% input. Developers are collecting 4% as of yesterday so, although I appreciate the article, this "exclusive" doesn't seem to be the case?

Posted by: Nooa

I came from California all the way to register my apartment with the Land department after Emaar sent me an e-mail on the 29th of Sept to come immediately otherwise I will be ending by paying 4%. I have been in Emaar office on thrsday at 8,00 am at 9.30 I have been told that they are not accepting applications anymore because the system (computer) in the Land Department is out of order. Is this my fault?????. Why they did not give us time. Like a month . I am very much disappointed because it is not a good reputation for Dubai .Can anyone help me. Thanks

Posted by: Bob Hope

I was in the land dept today. They stopped issuing tokens to transfer property. result: I have to pay an extra 2% to register my property. Why didn't I go yesterday... I wish I could have, I cant just leave work as I wish. This is a sad development by the land department. So wrong to treat people with fees like this and no lead time, follow up with shocking customer service and it leaves you deflated. Please extend the deadline. we are all trying to accommodate your fee hike the best we can. The people need time.

Posted by: Mike

If they wanted to stop flipping. What about if the property is resold within the first year DLD fee is 4%, 2nd year 3%. and after 2 years of ownership the 'normal' 2%. And at least give people 1-2 months notice to finish their deals before implementing the law.

Posted by: Craig

Are the transfer fees to come in to affect too if you are getting a divorce? My wife is to transfer our property in Dubai to my sole name will we incur a 4% transfer fee for this?

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