There are two ways to let a home in Dubai: long-term letting and holiday letting. Both are regulated, the second considerably more strictly. This guide describes the rules, the ongoing costs and the risks. We give no figures for rental income, because it cannot be predicted reliably.
Long-term letting: Ejari
Tenancy contracts are recorded in Ejari, the system run by the regulator, RERA; according to the Dubai Land Department (DLD), registration is mandatory. Online it costs AED 100, plus a knowledge fee and an innovation fee of AED 10 each (DLD, read in November 2026).
Rent increases on renewal
Decree No. 43 of 2013 caps rent increases when a contract is renewed. The yardstick is the average rent of similar units under the rent index approved by RERA.
| Current rent compared with the average rent | Permitted increase |
|---|---|
| up to 10% below | none |
| 11–20% below | up to 5% |
| 21–30% below | up to 10% |
| 31–40% below | up to 15% |
| more than 40% below | up to 20% |
Since 2025 renewals have been governed by the DLD’s “Smart Rental Index”, which is based on a classification of buildings. An increase requires at least 90 days’ notice before the contract expires and applies only if the index confirms eligibility. For a new lease the index is, according to the DLD, indicative only: the cap concerns renewals, not a first letting.
Holiday letting: only with a licence and a permit
Short-term letting is not freely available in Dubai. Under Decree No. 41 of 2013, no one may let holiday homes without a licence from the tourism authority (now the Department of Economy and Tourism, DET). Administrative Resolution No. 1 of 2020 sets out the details:
- Each unit needs its own permit, which is valid for one year and renewable.
- The applicant must prove the right to dispose of the unit, and the sale and purchase agreement must not expressly exclude holiday-home use.
- The unit must be in an area where the activity is authorised.
- The home is let as a whole, not as separate rooms or bed spaces.
Violations carry fines of AED 200 to AED 20,000. We were unable to verify whether an owner living abroad may hold the permit personally or must use a licensed operator. Confirm this with the DET or a licensed operator. Whether a given building and contract allow holiday letting has to be checked case by case.
The landlord’s ongoing costs
- Service charges: According to the DLD, the owner is responsible for paying them. The approved amounts for each project are in the Service Charge Index.
- Municipal housing fee: 5% of the annual rent, collected through the electricity bill. Where the property is let, the tenant bears it; where there is no tenant, the owner pays it, according to PwC.
- Vacancy, management, maintenance: These items depend on the property and belong in every calculation.
An overview of all items is given under purchase costs.
Tax
The UAE does not currently levy personal income tax on individuals. That describes the UAE side only: rental income may be taxable in your country of residence, and Germany has no double taxation agreement with the UAE in force. Details are in the guide to tax for buyers from Germany, Austria and Switzerland; your own case is for a tax adviser.
Risks in 2026
Since late February 2026 the region has been affected by an armed conflict. On 17 July 2026 the IMF described a slowdown in tourism, transport, trade and real estate, and elevated uncertainty. According to a press report, the consultancy CBRE recorded falling average rents for the second quarter of 2026; that is a company’s own data, not an official figure.
Then there is supply: according to a press report of 7 October 2026, the rating agency S&P expects residential stock, especially apartments, to rise by about 20% over the next two years. That may affect, in particular, locations dominated by residential towers, such as Dubai Marina. Rents are paid in dirhams; you carry the exchange-rate risk against the euro or the Swiss franc. Past rents say nothing about future ones.
If you would like to put a plan into context, you will find further articles in the guide.
Key points
- Long-term tenancy contracts are registered in Ejari.
- Rent increases on renewal are capped by Decree No. 43 of 2013; for a first letting the index is indicative only.
- Holiday letting requires a licence and a permit for each unit; it is not permitted in every building.
- The owner bears the service charges, and the cost of vacancy too.
- Rental income may be taxable in your country of residence.
- In 2026 elevated uncertainty and a large supply pipeline weigh on the rental market.
Frequently asked questions
May I let my home in Dubai as a holiday home?
Only with a licence from the Department of Economy and Tourism and a permit for each unit. The area must be authorised for the activity, and the sale and purchase agreement must not expressly exclude that use. Whether this is the case for your building and your contract has to be checked individually.
Can I raise the rent as I wish?
Not when a contract is renewed. Depending on how far the rent is below the average, Decree No. 43 of 2013 allows no increase or a maximum of 5% to 20%, and the increase requires at least 90 days’ notice before the contract expires. For a new lease the rent index is, according to the DLD, indicative only.
What rental yield can I expect?
We do not quote yields, because they cannot be predicted reliably. In 2026 there is also elevated uncertainty, a growing supply of apartments and exchange-rate risk. Work with your own cautious assumptions, including vacancy and costs.
