- What is Short-term Rental in Dubai
- Advantages of Short-term Rentals
- Registration Process
- Short-term Lease in Dubai for Tenants
- Penalties for Breach of Contract
- FAQs
There is a growing demand for short-term rentals in Dubai. Tourists visiting the city prefer staying in short-term rental units as an alternative to hotels, but residents may also opt for such accommodations for several reasons. As for homeowners, they benefit from flexibility and chances of higher returns. We have compiled a detailed guide for leasing properties in Dubai on a short-term basis.
What does short-term rental in Dubai mean?
Short-term rental properties in Dubai refer to the units offered for rent on a monthly, weekly or daily basis. Usually, these units are furnished and include basic utilities including electricity, water and internet, among others.
Properties rented for short-term in Dubai are known as holiday homes. These units include apartments based in residential or mixed-use buildings or independent villas. That said, it’s important to note that the entire property has to be rented out for short-term rentals in Dubai, and not just a part of the unit. Here is how to register or renew a holiday Home permit in Dubai.
Short-term rentals in Dubai are typically fully-furnished offering exclusive amenities for guests including house-cleaning services, TV and internet connection, DEWA connection, laundry facilities, gym and pool facilities, housekeeping and valet parking.
Note: According to the Dubai Department of Economy and Tourism, hotel and hotel apartment buildings are NOT permitted to rent units as holiday homes.
Who is staying at the short-term rental unit?
The rise in tourism in the UAE, especially in Dubai helps thrive short-term rentals. For a long time, hotels were selling the home away from home experience. However, the short-term rentals in Dubai are also as good and sometimes offer more than hotels. Competitive rates, ease of accessibility to major tourism spots, availability of public transport add to the popularity of short-term rental units in prominent locations of Dubai.
Consultants, mid-tier business professionals and families visiting the city for a holiday often prefer living in short-term rental units. Such units offer a fully-equipped house and more freedom when compared with hotels.
Here is a list of popular monthly and daily rentals in Dubai.
Advantages of short-term rentals
Short-term rentals in Dubai are beneficial for tenants and landlords, alike.
Benefits of short-term rentals for tenants
Tenants living in short-term rental units in Dubai enjoy a fully-furnished property with all the utilities. Simply put, tenants don’t have to go through the hassle and expenses of setting up a property for a short-term.
Benefits of short-term rentals for landlords
As for landlords or property owners, they get better-yields with short-term rentals than traditional long-term leases. This is because they have the flexibility to lease their property for the duration of their preference. Moreover, with short-term rental properties, landlords can increase the rental returns by adjusting the price depending on seasonal demand.
Short-term rentals aren’t limited by a long-term contract giving landlords the leverage to use their properties when needed.
Laws for short-term rentals in Dubai
In Dubai, long-term rentals are registered in the Ejari system, while the Department of Economy and Tourism (DET) regulates short-term rental contracts.
For leasing units to tenants for a short-term in Dubai a permit and approval is required from the DET. Homeowners in Dubai can request a permit for renting their property on short-term by registering themselves as an individual operator on the DET website, they can also utilise services of licensed operators, who can take care of the process on their behalf.
Tenants can also sub-lease their property on a short-term basis, given they have a no-objection certificate from the property owner.
Registration Process
Let’s go through the working process of short-term rental contracts in Dubai.
Registration and Permit
As the first step, individual operators, including homeowners or tenants, must login to the Department of Economy and Tourism website and register themselves. This can be done via the Holiday Home Section, by signing up as a ‘Homeowner.’
What types of units are eligible for short term rent in Dubai?
Apart from hotel apartments, all kinds of units are eligible for short-term rental contracts. Moreover, any house in a gated community with at least four villas can be rented out for a short duration. According to DCM rules, villas located on highways can also operate as holiday homes.
Individual operators must upload copies of their Emirates ID or passport and fill out the required information to register. The registration fee as an individual operator is AED 1,500 (+ AED 10 knowledge fee and AED 10 innovation fee).
Homeowners must upload the property title deed and the DEWA bill under the owner’s name when applying for a DET permit for short-term rentals. That said, in case a tenant is subletting a property on a short-term basis, they are required to upload additional documents, including:
- The lease agreement mentioning the subletting clause
- NOC from the owner in the DTCM template
- Owner’s passport or Emirates ID
What is the maximum number of permits for one landlord?
After registration, a homeowner can apply for the necessary permit for their property. Homeowners can apply for a DTCM permit for up to 8 units. If anyone wants to apply for more units, they need to submit a trade licence and apply as a professional operator.
How much is the cost for a DTCM Permit?
The cost of a DTCM permit differs according to the type of unit and the number of rooms. The average permit fee for villas and apartments short term rent are:
- AED 370 for a studio or 1-bedroom apartment
- AED 670 for a two-bedroom unit
- AED 970 for a three-bedroom unit
- AED 1,270 for units consisting of four bedrooms or more
- The average cost of acquiring a DTCM permit for short-term rental in Dubai is AED 1,520 per year
- The validity for a short-term rent permit in Dubai is a year and has to be renewed every year
- The permit to rent a holiday home is for a minimum of 3 months and a maximum of 12 months
- The permit fees for these units are regardless of the validity period
Operating short-term rental property in Dubai
After the Department of Economy and Tourism issued a short-term rental permit in Dubai, homeowners can start listing properties on property portals like dubizzle and Bayut on a daily, weekly or monthly basis. Please note that tenants must rent out the entire unit, and the homeowner cannot simultaneously occupy part of the property.
As per DET, short-term rental property operators in Dubai must be fully furnished, provide a safe and secure environment for the guests, ensure cleanliness of the property and have insurance that covers risks posed to guests, the property or the building.
When renting apartments on short-term rent, DET recommends informing the building management beforehand about rental operations for apartments.
It’s important to note that there is no specific DET template for a short-term rental contract between the operator and the guest. That said, operators must register all the guests who check in to the property onto the DTCM system.
The operator must upload either a copy of the National ID (for GCC Citizens) or the passport (for other nationalities) when guests check in to the property.
Tourism and Dirham
The Tourism Dirham is a kind of tax charged in the UAE on guests by hotels, hotel apartments and short-term rental properties in Dubai. This tax is charged to help develop the trade and tourism sector in the Emirate.
Homeowners managing properties on short-term lease in Dubai will collect Tourism Dirham from their guests on DCTCM’s behalf. The total monthly amount collected from Tourism Dirham must be paid to the Dubai Corporation for Tourism and Commerce Marketing by the 16th of the following month.
How is tourism Dirham calculated for short-term rental properties
Tourism Dirham is charged according to the number of rooms per night occupied for short-term rentals in Dubai. The amount charged for Tourism Dirham depends on the category of the property: standard or deluxe. This classification is done when applying for the permit on the DTCM website.
The Tourism Dirham fee for standard or deluxe properties (per night per room) is as follows:
- Standard: AED 10
- Deluxe: AED 15
When checking out the guests through the DTCM system, the Tourism Dirham fee for their stay is calculated. This fee has to be listed by the operator as a separate charge when presenting the invoice or bill to the guests.
Please note that Tourism Dirham is only charged for the first 30 consecutive days of the guest’s stay; this ranges from AED 7 to 20 depending on the property type.
Required Documents
Landlords or property owners require a permit from DET to rent their properties as holiday homes for a short-duration. Moreover, tenants need to register on the DET website when they choose short-term rentals in Dubai. To register their unit as a holiday home, the property owner must submit the following documents:
- Title deed or sales purchase agreement copy or payment completion certificate
- Passport copy or Emirates ID of the owner
- Trade licence copy (for companies)
- Property management letter in a downloadable template
- Recent DEWA bill
- Tenancy contract for individual tenant
After the documents are submitted, property owners need to make corresponding payments according to the property unit type. DET then reviews the application and approves it.
What should tenants know about short term leases in Dubai?
The tenants or guests must go through the following points before renting a short-term property unit in Dubai:
- The advertised rental price listed on property portals for short-term apartments and villas usually doesn’t include the Tourism Dirham tax, VAT and refundable deposits.
- The rental price also doesn’t include the cost of utilities such as internet, water, electricity and other maintenance expenses.
- A number of short-term rental properties in Dubai require the guests to stay for some nights.
- The rent for short-term units in Dubai is mostly on the higher side as these units are usually fully furnished.
For more information, here is detailed advice for choosing short-term rental units in Dubai.
Popular areas for short-term rental in Dubai on a monthly basis
According to dubizzle’s 2022 annual rental report, popular areas for renting short-term properties in Dubai on a monthly basis are classified in affordable and luxury categories. Popular areas for renting affordable apartments in Dubai on a monthly basis include:
- Dubai International City
- Jumeirah Village Circle
- Deira
- Bur Dubai
- Al Barsha
Popular luxury areas for monthly short-term rental apartments in Dubai include:
- Dubai Marina
- Business Bay
- Downtown Dubai
- Jumeirah Beach Residence
- Palm Jumeirah
Popular areas for renting short-term properties in Dubai on a daily basis
Areas popular among affordable apartments for rent on a daily basis include Al Barsha, Deira, Bur Dubai, Dubai Silicon Oasis and Jumeirah Village Circle.
On the other hand, popular areas for daily short-term rental of luxury apartments in Dubai include Dubai Marina, Downtown Dubai, Jumeirah Beach Residence and Business Bay.
If you’re looking to rent properties on a daily basis, go through these properties for daily rentals in Dubai.
Popular areas for renting villas on short-term basis in Dubai
Popular affordable for renting villas on short-term basis in Dubai include Damac Hills 2. Whereas, popular luxury areas for short-term villa rentals in Dubai include Palm Jumeirah and Damac Hills.
Penalties for Breach of Contract
Homeowners who rent properties for short-term rentals in Dubai without a licence are fined AED 5,000.
FAQs
What laws govern the short-term rental markets in Dubai?
The activity for leasing Holiday Homes in Dubai is regulated under Decree No. 41 of 2013. All units offered for short-term rental in Dubai need to be registered with the government on the DTCM’s website. The fees and fines pertaining to the leasing of holiday homes in the Emirate is regulated by the Executive Council Resolution No. 49 of 2014.
Property operators need to register all the guests for holiday homes. Operators also need to follow the legislative guidelines established by The Department of Tourism and Commerce Marketing. The regulations ensure convenient classification, grading and maintaining short term rental units in Dubai by ensuring a safe, secure environment, insurance and cleanliness of the unit.
What steps are necessary to let out a property for short-term rent in Dubai?
To rent a property unit for a short term in Dubai, owners can either utilise the services of a Holiday home operator or list themselves as homeowner on the DTCM website. Independent homeowners must provide a fully furnished unit that is inspected regularly as per the DTCM standards.
To maintain occupancy throughout the year for multiple units, it is suggested to go with a holiday home operator or company. Properties have to be advertised on local property websites offering multiple property viewings.
Can I stay in the same property and let it out as a vacation home?
No, only entire units can be given for short-term rentals in Dubai. These units can not be shared with the property owner or other guests.
What is the cost to acquire a DTCM permit?
The cost to get a DTCM permit without using an agency is AED 1520 per year.
Can all types of villas acquire holiday home permits?
No, only residential villas based in gated communities, including at least four villas, are eligible for holiday home permits. As per DET, commercial villas on main roads are also eligible to operate as holiday homes.
What is the validity of a holiday home permit?
A holiday home permit is issued for a minimum of 3 and a maximum of 12 months. The permit fee is regardless of the validity period.
What are the benefits of short-term rentals in Dubai?
There is an expected premium for short-term rental units in Dubai compared to long-term rentals. This is because the tourism industry in the Emirate is growing at a rapid pace, and people prefer residing in holiday homes. Though the operating expenses for short-term rentals might increase, there is a substantial net rental yield.
Who should be contacted for more information on short-term leases in Dubai?
The Dubai Economy and Tourism department can be contacted at 600-555-5559 for further information on short-term leases in Dubai. Queries can also be sent at info@visitdubai.com.
That concludes our guide on short-term rental in Dubai. If you are a homeowner, you can list your properties for rent in Dubai on dubizzle. Besides, property seekers looking for rental apartments can go through this list of apartments for rent in Dubai.
Stay tuned to dubizzle’s property blog for useful guides on matters pertaining to property.
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