Joint ownership of Dubai property – What to consider

Many clients ask us about buying Dubai property in joint names and how title deeds play a role in this process. Their queries vary – what is a title deed? Is joint ownership of property possible? Do we have to be married? What share in the property will we each have? What happens if one of us wants to sell? What happens if we get divorced? What happens if one of us dies? Let’s clarify some of the issues and explain the title deed and joint property ownership process.

What is a title deed?

A title deed is a legal document that confirms ownership of a property in Dubai. It contains critical information such as the property’s layout, size, location, and the owner's full name. If you’re buying property in Dubai, whether individually or through joint ownership, the title deed will be issued in your name after the transfer process is complete. In cases where a mortgage is involved, the bank will hold the title deed until the mortgage is fully paid off.

Can you have joint ownership of property in Dubai?

Yes, it’s possible to have joint property ownership in Dubai. The title deed can be issued in the names of two or more parties, such as friends, business partners, or married couples. You can specify the percentage share each party holds, which is then documented in the title deed, subsequently issued by the Land Department on completion of the transfer. In most cases, the percentage share of ownership will reflect the ratio of financial investment by each party. In the case of married couples, this is usually 50/50.

Selling a share in joint ownership of property in Dubai

When it comes to joint property ownership, all of the joint owners must consent to the sale. In the case of a group of investors, you may want to consider putting in place some form of collective investment agreement to deal with this situation. That agreement could provide for a right of first refusal in favour of the non-selling investors, coupled with an obligation on all investors to consent to a sale in the event that the parties cannot agree the terms of a sale by one of their number only. Alternatively, an offshore corporate structure could be considered through which the property could be owned (through a JAFZA offshore company, under current regulations).

Note that where one of a number of joint owners sells his or her share, the 4% Land Department transfer fee is calculated on the value attributed to the seller’s share only, and not on the value of the whole property. If the transfer is between two joint owners who are closely related, whether as husband and wife, or as parent and child, then it is possible to apply for a reduced ‘gift rate’ transfer fee of 0.125%.

Divorce and joint ownership of property in Dubai

One spouse cannot sell his or her share without the consent of the other spouse. Usually of course spouses agree on a sale of a property they own jointly, but there are circumstances, such as where a divorce is in process, where disagreement may arise. Often a Dubai property remains in joint names until divorce proceedings have been concluded, providing for a transfer of the property from one spouse to the other.

If a couple buy a property in joint names, and then subsequently marry, the wife will often adopt the husband’s family name and change her passport accordingly. In that case it’s advisable to apply for the title deed to be amended to show the new surname, thereby avoiding complications on any later sale. This is a relatively straightforward and inexpensive procedure.

However, if this is left to occur only after the divorce has been finalised, then technically it is a transfer between 2 unrelated individuals and the 4% transfer fee will apply. If the transfer is completed before the decree absolute, then the transfer is between spouses and a reduced fee of 0.125% will apply. So divorcing couples with jointly held Dubai properties need to think about the timing of their split!

Finally, what happens on the death of one of two or more joint owners?

In some countries the deceased’s share automatically passes to the surviving owner (legally the owners are referred to as ‘joint tenants’). Not so in Dubai. Here, the deceased’s share in the property passes to his or her heirs (legally the owners are referred to as ‘tenants in common’). So married couples must be sure to each make a will (read more about DIFC Wills here) to ensure that the deceased’s share of the property passes to the surviving spouse – if that is what’s intended.

So joint ownership of Dubai property is possible, but there are a few things to bear in mind if you are not to fall foul of unexpected consequences.