No changes in DIFC freehold transfer fee

Dubai International Financial Centre (DIFC) has neither plans to reduce the current freehold transfer fee nor introduce any additional fee on property transactions, Emirates 24|7 can reveal.

“There is currently no plan to either reduce the freehold transfer fee or impose additional fees imposed by other jurisdictions, for example, on mortgages," a DIFC official confirmed to this website.

"Previously the interest payable on late and unpaid freehold transactions were waived over a definite period to assist parties that had inadvertently omitted to comply with their obligations under the DIFC Real Property Law and Regulations,” the official added.

The centre is also not contemplating changing other fees associated with freehold transactions.

"We have attempted to keep lodgement fees to a minimum and where they do not meet the cost associated with providing the service, they are effectively subsidised by the DIFC Authority.”

The freehold transfer fee is currently calculated at the rate of 3.5 per cent of the amount referred to in clause 3.1 of DIFC Real Property Regulation, which reads as follows: “The freehold transfer fee is based on the amount of the consideration paid or payable for the interest, or an amount that is 15 per cent below the market value of the interest, whichever is the greater.”

If the transfer fee is not paid within 30 days after the effective date of the freehold transaction, interest is payable at the rate of five per cent per annum until the fee is actually paid.

In November, the DIFC announced a series of changes to its property regulations and amendments to the definition of freehold transaction and where freehold transfer fee were not payable.

“The amendment in the Real Property Regulations has been made to bring further clarity to the meaning and intention of the transactions that fall within the definition that require compliance,” the official added.

As per the DIFC, a full freehold transfer fee payment will be exempted in the following circumstances: Where a transfer is to accommodate a change where the beneficial interest does not significantly change (for example, where a person wishes to transfer his or her interest to or from a company where that person is the sole director and shareholder); a party enters into an Islamic financing agreement; the buying and selling of shares of a publicly listed company through stock markets; and when a person inherits the estate of another by law or by the terms of a will.

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