DIFC To Hike Freehold Transfer Fee
by Lorys Charalambous, Lowtax.net, Cyprus
27 March, 2014
The Dubai International Financial Centre Authority announced on March 24, 2014, that it has approved a revision to the transfer fee on real property transactions from 3.5 percent to 5 percent.
The Freehold Transfer Fee is payable for freehold transactions in real property within the jurisdiction of the DIFC, to help defray the cost of guaranteeing title to real property. The freehold transfer fee is based on the amount of the consideration paid or payable for the interest, or an amount that is 15 percent below the market value of the interest, whichever is the greater.
Originally it was proposed that the Freehold Transfer Fee be increased from 3.5 percent to 6 percent. However, in light of the comments received, the increase has been revised downward to 5 percent.
The amendments to the Real Property Regulations will come into effect on April 1, 2014, allowing a one week grace period for relevant parties to register their freehold transfers at the current rate of 3.5 percent.
This change is in line with market trends. It addresses the International Monetary Fund's concerns about overinflated markets and endeavors to secure the long term stability of the DIFC property market.
DIFC is a financial free zone connecting markets in the Middle East and North Africa with the rest of the world. The benefits of doing business in the center include 100 percent foreign ownership, zero percent tax on income and profits for 50 years, and an international legal system based on English Common Law.
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