Dubai: The Dubai Land Department has put to rest all speculation that moves were afoot to raise the property registration charges from the current 4 per cent. It was in September 2013 that the charges were doubled and which have been in effect since. The move, along with other regulatory push, had a seminal impact on transaction activity in the market since the second quarter of 2014.
In a statement issued yesterday, the Land Department noted that it does not plan to raise charges in the ‘near future’.
The government entity also confirmed a deadline extension for developers and investors to register their units with the Dubai Land Registry by the end of October.
“A number of market players are talking about alleged reports that Dubai Land Department will be increasing real estate registration fees from 4 per cent to 8 per cent,” said Sultan Butti Bin Mejren, Director-General. “This is a baseless rumour and only serves to encourage the return of speculation … it confuses buyers and needlessly compels them to speed up their purchasing decisions.”
The marketplace has been swirling with rumours; those related to increases were most likely set off by sellers in the secondary market looking to get prospective buyers to seal the deal now rather than wait. In a marketplace where secondary market transactions are down 50 per cent in the first-half of the year, sellers are deploying slick methods and not necessarily related to property fundamentals.
The Land Department statement also noted that decisions to increase the various fees relating to real estate are issued by Dubai Executive Council.
In September 2013, the Land Department implemented the Council’s resolution to increase registration fees from 2 per cent to 4 per cent. The charges are paid by the seller and the buyer equally unless otherwise agreed between the two parties.
The higher charges effectively cut out speculative buying that was ‘challenging the market’.
According to Bin Mejren, those in the market with an interest in selling property must “follow professional methods on a competitive basis when promoting their properties.”
The announcement by the Land Department regarding status quo on the registration fees also ends speculation of another kind — that the authorities might consider dropping the 4 per cent fees given the lukewarm market conditions.
The sentiment among some market insiders was a change back to 2 per cent would fire up transactional activity, particularly in the secondary space.
