No increase in Dubai property fees but new penalties regime introduced

International City apartments in Dubai. Antonie Robertson / The National

Dubai Land Department on Monday reiterated that it is not planning to increase transfer fees for registering new properties, which currently stand at 4 per cent.

The Land Department had initially set a deadline for registering properties of June 30 this year. As that deadline approached, the department moved to quash rumours that the registration fee would be doubled again – to 8 per cent. It also pushed the deadline back to October 31 to give procrastinating developers and property owners who had not registered their units more time to do so.

As the October deadline loomed, rumours again circulated that registration fees – which initially doubled to 4 per cent from 2 per cent in September 2013 as part of moves to cool an overheating market – would double.

The director-general Sultan Butti bin Mejren on Monday said that the fee would not be increased. However, he added that the department will levy higher charges on customers who have been deemed to be evading fees, or those who provide misleading information on transactions.

For instance, if a buyer is found to have understated the value paid for a property in a bid to pay a lower fee, they will be hit with higher charges.

Buyers of new properties now have 60 days in which to register their purchase. Failure to do so, or any attempts to mislead, could lead to the department levying penalties that effectively double the registration fee to 8 per cent.

DLD has also set up a committee to deal with appeals from those who are hit with charges. Those who have a justifiable reason for missing will have penalties quashed, a spokesman said.

Speaking at a panel debate at the launch of Cavendish Maxwell’s third-quarter property report in Dubai last month, Zarah Evans, managing partner of Exclusive Links Real Estate, argued that investors should be given longer lead-in times to to deal with rule changes imposed on Dubai’s property market.

For instance, she said that power of attorney was recently removed from real estate brokerages to act on behalf of buyers and sellers. Although the move had been introduced to protect investors who suffered at the hands of rogue brokers, she argued that it has had an effect on transactions.

Follow The National's Business section on Twitter