Back in the heady days of Ireland's property boom, quite a few other countries experienced similar nonsensical price increases, including Dubai in the United Arab Emirates. It was a little unusual in that property ownership only became possible there in 2002, which made it a very rare new frontier in the realm of freehold property ownership.
At the time, it held great appeal for some Irish investors and a number of companies started to market property in the Emirates quite heavily here. A lot of deposits were taken prospectively on properties to be built in Dubai in the future. At the time, most buyers didn’t realise just how far in the future this might be. In fact quite a few would never be built.
Dubai managed to prolong its property boom for a while longer than Ireland, or at least it managed to hide the downturn for longer. When it did crash, it did so spectacularly, but prices had begun to appreciate again by late 2009.
By 2012 another property boom looked imminent and the authorities took action to cool the market. These actions included mortgage restrictions and an increase in the Property Registration Fee from 2 per cent to 4 per cent.
Many who purchased in Dubai in the past decade were not aware of the Dubai Land Department (DLD) Property Registration Fee, although it has always existed and will be somewhere in the small print of contracts. Developers were given the option to allow the fee to be paid on completion of the property and, of course, many of them haven't completed to this day.
Also, most overseas buyers in Dubai never intended to take ownership of the properties, so those who were aware of its existence were happy to allow whoever would be paying for completion to cover the cost.
The relevance of the fee at this stage is that when the increase was announced in 2013, a payment deadline of June 2015 was also introduced. Owners were given a further four month grace period, which means payment is due at the latest by the end of October 2015, that is, this month.
Also, many projects that were sold in Ireland and the UK up to a decade ago have sprung back to life in the past few years and are now reaching completion, with some owners totally unaware of this development.
Most owners of property in Dubai, or at least those who put deposits on property there some years ago, have at this stage received notification that the payment is due, but some who have changed contact information have no idea of the existence of the fee or the fact that it is now due.
The DLD claimed “failure to comply will attract action and penalties”, which have as yet remained unspecified. It has strenuously denied rumours that the tax will be doubled to 8 per cent for those who fail to register payment on time.
Some property developments sold in Dubai during the noughties will never be built and the registration requirement will die with them, but other owners who thought they would never see a property in the Emirates may still have an asset worth something or may ultimately receive a property, if somewhat belatedly.
If you wish to find out if you have a Registration Fee liability, you should try to contact the developer to see if the project is still in existence or likely to materialise.
