All about leasehold property ownership in Dubai

• Key Updates on Leasehold Properties
• What is Leasehold Ownership
• Who Can Buy Leasehold Properties
• Advantages of Leasehold Ownership
• Disadvantages of Leasehold Ownership
• FAQs

Dubai is a magnet for investors worldwide. And announcements of new projects almost daily are spoiling investors for choice when buying property in the city. However, unlike locals, as an expat, your options for owning a property are limited to freehold and leasehold basis. While both options have merits, this guide will focus on leasehold property ownership in Dubai and its pros and cons.

So, without further ado, let’s start with what is leasehold ownership and who can buy such property.

Updates on Leasehold Properties

Before we explore the topic further, here are the latest updates on laws and regulations related to leasehold properties and ownership.

Key Features of Leasehold Ownership in 2025

• Lease Terms: Leasehold agreements can last up to 99 years, with mandatory registration of leases exceeding 10 years at the Dubai Land Department (DLD) to ensure legal protection and transparency.
• Usage Rights: Occupancy, rental and subletting are permitted, but significant modifications or structural changes require the freeholder’s written approval.
• Renewals: Lease renewal terms and rent adjustments are regulated under Dubai’s Smart Rental Index, which ensures fair, market-based rent increases capped at 20% per renewal period.
• Legal Protections: The updated regulatory framework enhances buyer protections through escrow accounts for off-plan projects, digital transaction processing and faster dispute resolution mechanisms via RERA and DLD.

Expanded Freehold Zones and Conversion Opportunities in 2025

One of the most significant updates is the expansion of freehold ownership zones in Dubai. Areas such as Sheikh Zayed Road and Al Jaddaf, previously restricted to leasehold ownership, are now eligible for freehold property conversion (if applicable).

What does this mean for leasehold owners?

• Leasehold property owners in these newly eligible areas can apply to convert their leasehold rights into freehold ownership, gaining full ownership of both the property and the land.
• The conversion process has been streamlined and accelerated, typically completed within 3 to 6 weeks after developer approval.
• This conversion can increase property value and investment appeal by providing greater security and transferability.

Note: Not all areas in Dubai qualify for conversion; investors should verify eligibility using the Dubai Land Department’s updated freehold zones map or consult their developer.

What is Leasehold Ownership?

Leasehold property ownership in Dubai means you own the building or unit, but not the land it’s built on. The land remains with the government or a private landlord. The leasehold title deed grants you rights to the property for a fixed term—commonly 99 years, but durations can vary depending on the developer and location. At the end of the lease term, the property rights revert to the freehold owner.

Moreover, leasehold property laws in the UAE stipulate that significant modifications or renovations to the property often require approval from the landowner or relevant authority. This structure provides a unique blend of ownership and tenancy, governed by regulations that protect both parties.

Who can Buy Leasehold Property?

Expats can buy leasehold property in Dubai, typically for a term of up to 99 years, under long-term leasehold arrangements. The designated leasehold areas in Dubai are outlined by Regulation No. 3 of 2006 and include popular locations such as Palm Jumeirah, The World Islands, Downtown Dubai, Jebel Ali, Al Jaddaf and Ras al Khor. These areas offer diverse opportunities for leasehold property investment in Dubai.

The property purchase options for expats in Dubai are similar for both leasehold and freehold properties, but leasehold areas are specifically designated for non-UAE nationals.

If you want to learn more about the regulations surrounding foreigners owning property in the city, read our blog on rules for foreigners buying property in the UAE. Here, you can find resources on how to buy property in Dubai and other emirates as an expat.

Now, let’s move on to the pros and cons of buying leasehold property in Dubai.

Pros of Buying Leasehold Properties

The advantages of buying leasehold properties in Dubai are:

Limited Liability

In a leasehold property, the landlord (lessor) is typically responsible for managing and financing maintenance and construction. This means lessees (buyers) have minimal financial burden for upkeep. However, with mutual agreement, lessees can undertake maintenance or repairs with prior permission from the landlord.

Lower Initial Cost

Since the lessee has limited property ownership, which is also time-restricted, the initial or upfront cost of buying a leasehold property is low.

Shared Maintenance

Leasehold communities often have a shared responsibility for maintaining common areas and amenities. This spreads the cost amongst residents, reducing the financial impact on individual homeowners.

Government Regulations

Leasehold ownership offers a layer of security through government regulations. These regulations establish guidelines for the development and management of the property. This can be particularly appealing to expat buyers unfamiliar with the local market.

However, it’s important to note that these regulations can also come with limitations, such as restrictions on modifications or potential future changes to fees associated with the lease.

Investment Opportunity

For investors seeking steady returns, some leasehold properties can be particularly attractive. Due to their often lower upfront cost and potentially high rental yields, these properties can generate a substantial income stream.

Flexible Options

Leasehold properties offer flexibility when it comes to ownership duration. Unlike freehold, where ownership is permanent, leaseholds come with predetermined lease periods.

Shorter leases can cater to temporary residents, while longer leases provide stability for those seeking a more permanent foothold in Dubai.

Cons of Buying Leasehold Properties

Here are some of the disadvantages of buying leasehold properties in Dubai:

Limited Control

Modifications in leasehold properties often require approval from the landowner or governing authority. This can limit your ability to personalise the space or make major changes that suit your needs.

Uncertainty

The fact that you don’t own the land can lead to uncertainty about the property’s future, especially if the landowner decides to change the terms or use of the land.

Potential for Disputes

While shared maintenance in leasehold developments can ease the financial burden on individual homeowners, it can also be a source of friction. Disagreements may arise among residents regarding the quality or cost of maintenance or even with the land owner over service charges or management decisions.

FAQs About Leasehold Property Ownership in Dubai

Can I convert a leasehold property into a freehold one?

Converting a leasehold property to a freehold property is feasible, although it requires a significant investment of time and money. Nonetheless, it can be done.

What’s the difference between a leasehold and a freehold property?

There are a few main differences between freehold and leasehold property in Dubai. Freehold ownership grants you complete property ownership, including the land. This means you can freely sell, rent or occupy the property and even pass it down to your heirs.

On the other hand, when acquiring a leasehold property, you only have the property rights for a limited duration, typically no longer than 99 years. Additionally, you don’t own the land, and most major property rights remain with the landowner.

Curious about the distinction between usufruct and lease? Our comprehensive guide on usufruct vs lease offers a clear explanation of these two legal terms.

How to extend leasehold property in Dubai after expiration?

If you want to extend leasehold ownership, here are the general steps to follow:

• Review the lease agreement
• Contact the landlord
• Negotiate new terms
• Create a new lease agreement
• Register the new lease agreement

Where can I buy a leasehold property in Dubai?

Expats can buy leasehold property in designated areas of Dubai. The most popular areas to buy leasehold properties in Dubai are Jebel Ali, Al Jaddaf, The World Islands and Ras al Khor.

How can we register leasehold property in Dubai?

In Dubai, leasehold property registration with DLD (Dubai Land Department) is a crucial step in establishing the legal status of the lease agreement. The post also includes the required documents for leasehold property ownership in Dubai.

And with this, we reach the end of our guide on leasehold property ownership in Dubai. If this has got you thinking about owning a property in the city, take a closer look at the benefits of buying property in Dubai.

However, those who want to invest in a freehold area and enjoy 100% ownership of the property can learn more about the freehold property law in Dubai to make an informed decision.

For more information on how to invest in Dubai real estate, stay tuned to MyBayut!