As a prime tourist destination, Dubai has seen tremendous growth in demand for Airbnb rentals, with listings increasing by 30% year-on-year as of 2023. But if you’re considering renting out a property yourself, it’s important to understand the rules that govern property ownership, tenancy, and Airbnbs in Dubai. Here, we’ll outline who can host, the legal requirements for hosting, expected fees, and the best hosting practices so you can host a Dubai Airbnb with peace of mind.
Who Can Host on Airbnb in Dubai?
Before listing a property on Airbnb, it’s essential to determine whether you can legally host. Dubai property ownership rules can differ depending on whether you’re a UAE national, an expatriate, or a foreign investor.
If you own a property in Dubai, you must ensure it’s in a freehold area, meaning expatriates and foreign investors can legally own and rent out properties there. For UAE nationals, you can rent out a property practically anywhere in the UAE. If the property is mortgaged, you may also need approval from the bank before listing it on Airbnb.
Tenants can also rent out their properties as holiday homes. As a tenant renting out, you must obtain written approval from your landlord. Additionally, you’ll need to register their lease with Ejari, the government’s tenancy contract registration system. This ensures compliance with tenancy rules and regulations and prevents unauthorised subletting.
Legal Requirements for Airbnb Hosting
Dubai has a structured regulatory framework for short-term rentals, primarily overseen by the Dubai Department of Economy and Tourism (DET). To legally operate an Airbnb, hosts must fulfil the following requirements:
- Obtain a Holiday Home: Hosts must apply for a Holiday Home Permit through the DET or work with a licensed property management company. The application process includes submitting property details, proof of ownership or tenancy approval, and compliance with safety and hygiene standards. Permits are valid for one year and must be renewed annually.
- Follow Tourism and Community Regulations: Once a property is licensed, hosts must adhere to Dubai’s tourism standards, which include maintaining proper guest records and ensuring security compliance. Additionally, some residential communities and buildings have specific rules regarding short-term rentals, so it’s best to check with building management before listing.
- Understand Fines and Penalties: Failure to comply with Dubai’s Airbnb rules can result in significant penalties. Hosting without a property permit can lead to fines starting from AED 5,000. Unauthorised subletting by tenants without landlord consent may also result in eviction or further legal action.
Fees for Airbnb Hosts
Dubai has specific financial obligations for short-term rental hosts. Airbnb hosts must charge a nightly Tourism Dirham Fee, which varies based on the property’s star rating. This fee is collected by the host and paid to the Dubai government.
Hosts will also need to register with Dubai’s Federal Tax Authority (FTA) and receive a registration number. You can then declare your rental income and pay taxes to Dubai’s Land Department (DLD). While residential leases are VAT-exempt, short-term rentals (including Airbnb) are subject to a 5% Value Added Tax (VAT) in Dubai, so hosts earning over AED 375,000 annually from rentals must register for VAT and comply with reporting obligations.
Other fees you may need to factor in are application fees, knowledge fees, innovation fees, utility bills, and insurance premiums.
Best Practices for Airbnb Hosting in Dubai
Maintaining a successful and legal Airbnb business means adhering to certain practices. Bear in mind our checklist before you begin:
- Follow regulations: Obtain any necessary permits and your landlord’s approval if you’re renting.
- Meet hospitality standards: Try to maintain cleanliness, security, and your guests’ satisfaction.
- Stay informed: Keep up with updates from DET on short-term rental laws.
The team at Frank Porter is here to support you every step of the way. Contact our experts for a streamlined listing process.
