A property registration fee refers to a fee charged by and paid to the DLD. The registration fee in Dubai is governed by Law No. 21 of 2006, Amending Some Provisions of the Land Registration Fees Law No. 7 of 1997. Under Article 4 of Law No. 21 of 2006, the registration fee is 2% of the “sale price,” of which 1% is paid by the purchaser and 1% by the developer.
There was a time when developers required purchasers to pay the entire 2%. That practice was later outlawed by the DLD. But the problem arises when the developer does not pay his 1% share, forcing purchasers to pay both shares in order to secure his interest in the property. In such situations it should be incumbent on the DLD to enforce the laws by requiring the developer to pay his share. Yet, the DLD often cites with developers by allowing them to pass their payment obligation to purchasers.
Even more alarmingly are reports that the DLD now requires that the fee is calculated not from the “sale price,” as per the law, but rather from the “market price.” This so-called “market price” is determined by the DLD. It is always above the “sale price,” resulting in a higher registration fee to the DLD. There are reports of several transactions having been cancelled because of this practice.
It is unclear as to what gives the DLD the right to change the law. Also, it is unclear as to who in the DLD has the authority and qualifications to determine the “market price.”
@Emirates24|7
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