The popular practice of renting out your apartment in Dubai as a holiday home for a month or two, will is regulated in accordance to June 2014 rules, announced by the Department of Tourism and Commerce Marketing. Now there will be a fine of AED 5,000 for short-term rentals in Dubai, if owners failed to register with the department.
Leasing residential units to tourists and visitors of the city on a short-term basis has been a widespread practice among some property owners who don’t want to rent out for a long term. But it is also a way to make more profit out of the property, compared to the traditional leasing to tenants based on one-year contracts. However, this practice hasn’t been official and there have been practically no rules regarding payment, leasing conditions, or rights and obligations of both parties. Now the Department of Tourism and Commerce Marketing (DTCM) says that homeowners who want to rent out their apartments will need to apply for a license.
Last summer DTCM said that only licensed operators would be able to lease residential properties as holiday homes. They are determined as furnished accommodation, rented on a daily, weekly, monthly or early basis without a legal agreement between the homeowner and the renter. To register with the department, owners need to apply for a license and pay the submission fee of AED 110. If they are approved, they will be able to receive their license only after paying the final fee. However, the license fee hasn’t been fixed by the department, which is quite unusual, but its cost will probably depend on the square footage, location and quality of the property in question. In addition, there will be a permit fee of AED 300 for every bedroom, which will be paid each year and a classification fee of AED 50.
So, now Dubai property investors will become licensed operators. Those who fail to register with DTCM however, will be fined AED 5,000 if found transgressing. According to the DTCM, it has issued only 39 initial approvals so far, which is a very small number, compared to the thousands of apartments, which are offered as short term rentals to visitors in the city.
