Dubai stands as a highly lucrative hub for tourism, where there is a convergence of cultures, adventures in the vast deserts of the Middle East, and luxurious shopping experiences in areas like the old souks and many malls which host millions of visitors annually.
The holiday homes market in Dubai has prospered in the wake of Airbnb and similar services which offer property owners business prospects through short-term property rentals.
Recent regulatory shifts in Dubai have reshaped the landscape for holiday home operations. Property owners can now list their properties as short-term holiday homes through obtaining licensing and permits from the Dubai Department of Tourism and Commerce Marketing (DTCM) and Dubai Economy and Tourism Department (DETD).
This article explores the aspects of obtaining a holiday home license in Dubai.
Advantages of Obtaining a Holiday Home License in Dubai, UAE
Thriving Hospitality Sector: Dubai hosts approximately 20 million visitors annually along with hosting major events which drawing an additional number visitors per year, such as Expo 2020 which led to an increase of 5 million visitors to Dubai. Dubai’s hospitality sector provides a robust platform for property owners to capitalize on tourism.
Streamlined Regulations: Simplified holiday home license and permit regulations in Dubai make it more profitable and accessible for property owners, resulting in a higher return on investment compared to long-term rentals due to the premium short term rental properties can demand.
Higher Returns: The streamlined regulations contribute to a high average premium on the return on investment for holiday homes in Dubai, making it an increasingly popular and lucrative investment.
Dubai Holiday Home Rentals Regulations
Licensing Requirement: Homeowners must apply for an annual holiday home license from DTCM and DETD, with licenses and permits are subject to renewal.
Insurance Requirement: Property owners are required to have insurance coverage for their holiday homes.
Role of Holiday Home Operators: Many property owners engage holiday home operator services for maintenance, marketing, and bookings. Operators must have contracts with guests and incorporate a security deposit to protect the property owner’s investment.
Continuous Rental: Temporary or permanent cessation of holiday home rentals during the license term requires prior approval from DTCM.
Property Standards: Holiday homes must adhere to specific standards, including the provision of essential items such as fire extinguishers, first aid kits, prayer mats, escape plans, curtains, a telephone, safe, beds, bedding, and linen.
Cost of a Holiday Home License in Dubai
License Cost: Ranging from AED 10,000 to AED 12,000, inclusive of the Knowledge and Innovation fees of AED 10 each.
Additional Fees: Considerations include DTCM approval fees, permit costs based on the number of rooms, DETD fees, and annual fees for Dubai Municipality.
DTCM Holiday Home Fees
Municipality Fee: DTCM imposes a 10% Municipality fee on all holiday home bookings.
Per Room Charges: Homeowners incur charges of AED 10 for standard holiday homes and AED 15 for deluxe holiday homes per booked room per night.
Annual Permit Fees: DETD enforces annual fees of AED 300 per room plus AED 70 per listed home.
The DTCM annual permit fees are calculated on the property’s configuration:
- 1-bedroom homes: AED 370
- 2-bedroom homes: AED 670
- 3-bedroom homes: AED 970
- 4-bedroom homes and larger: AED 1,270
Steps to Obtain a Holiday Home License
List Business Activities: Detail all business activities on the license application forms, ensuring alignment with DETD regulations.
Choose a Company Name: Register a suitable company name adhering to UAE naming policies which United Advocates shall provide assistance for.
Procedure for License Acquisition: Complete application forms, submit required documents including passport copies, photos, property details, floorplans, DTCM approvals, and a No Objection Certificate from the employer if applicable.
Applying for a New Visa: Following the holiday home license acquisition, proceed to apply for a new visa and open a corporate bank account, facilitated by United Advocates.
Collaborating with United Advocates guarantees a smooth journey through the licensing process, ensuring a hassle-free experience from application to approval with lawyers handling the matter to ensure compliance.
Applying for a holiday home license in Dubai can be a complicated process, partnering with United Advocates will save you from unnecessary delays or rejections and streamline the entire process.