Dubai Transfer fees

Dubai Land Department Transfer Fees to change again???

The new transfer fee of 4% has now been running for the past 3 weeks and it seems to be coming accepted by the property fraternity that the buyer will pay the full amount.

This was confirmed at my last transfer on Thursday when the transfer office actually refused to give 2 receipts for the 4% split 2% and 2% for the buyer and seller. One receipt for 4% to either the buyer or seller is all they will produce.

There is also a rumour floating around that there is going to be another change to the transfer fees...

Now that the 4% transfer fee has been accepted the DLD look like they might introduce a fee specifically for off plan sales in Dubai.

The speculation is anticipating a 9% transfer fee for off plan sales in Dubai and 4% for completed property.

This would be a dramatic change to a market that was only charging 2% 4 weeks ago and some will think that it will dampen the market too much.

I am not convinced it will dampen the market like people think but I do think it could influence the profile of buyers that are active.

I won't bang on too much  but my little theory runs like this.

If you take a recent Emaar launch in Downtown we all remember the mega queues and scuffling that took place to get a ticket. As agents we also know that a lot of the tickets were sold to agents who hustle and do anything required to get to the front of the queue so that they can get a ticket to either sell on or put a deposit down with the intention of immediately selling at a profit/premium. It's only a guess but I would think that at least half of all off plan launch sales are sold to a second buyer at a premium within 4 weeks. These second string buyers then keep the property until completion.If you could stop the brokers and hardcore flippers from getting to the front of the queue then in theory you may get a much larger percentage of genuine buyers putting deposits down at launch and holding until completion.

If done correctly the 9% transfer will stop 'some' people/agents from even bothering to stand in line and fight like WWE wrestlers for a ticket.What the DLD need to understand is that some developers will allow the first buyer who puts down a deposit to  change the name of the buyer to a nominee which actually defeats the object the DLD are trying to achieve. In this instance the agents would still turn up as they know they can change the name on the contract before the DLD would charge the 9%. I would advocate a large fine to the developer who participates in this practice. It currently happens on nearly every launch.

We are definitely going through a period of change in the property market and as it evolves to the next level of maturity I hope the new regulations, whatever they may be, have the desired effect and close all potential loopholes ensuring that right people have a chance to purchase at the beginning of the cycle.