Property owners in Dubai looking to profit from short-term rentals through platforms like Airbnb have to navigate a licensing process.
The Dubai Department of Economy and Tourism (DET) has introduced rules to regulate the industry, ensuring that all short-term rental hosts comply with specific requirements.
Frank Porter, a property management company in Dubai, explained the necessary steps for registering a property on Airbnb. According to Anna Skigin, CEO of Frank Porter, the first requirement is for hosts to register with the DET and obtain a short-term rental permit.
Steps for obtaining a license
“Applying for a Department of Economy and Tourism (DET) license in Dubai involves several steps and can vary in duration based on several factors, including the type of license, the completeness of your application, and the current workload of the department,” Skigin told Arabian Business.
The first step involves research and preparation. Property owners or managers must familiarise themselves with the DET’s requirements, which vary depending on the property type and intended use.
According to Skigin, the process is as follows:
- Prepare documentation: Gather all necessary documents, including proof of property ownership or lease, identification, and compliance certificates.
- Submit application: Apply for the short-term rental permit through the DET’s online portal or in person at their office.
- Pay fees: Pay any required application and registration fees.
- Complete inspections: Schedule and complete any necessary property inspections.
- Obtain permit: Once your application is approved, you will receive your short-term rental permit.
- Insurance coverage: While not a license or permit per se, obtaining adequate insurance coverage is crucial. This includes:
- Short-term rental insurance: Coverage for property damage, theft, and liability specific to short-term rental activities.
- Liability insurance: Protection against claims for injuries or damages that occur during a guest’s stay.
“As a short-term rental host, it’s essential to comply with various insurance and legal requirements to protect yourself, your guests, and your property. These requirements can vary depending on your location,” Skigin said, adding these are the insurance requirements:
Fees and inspections
The application process involves paying fees, which vary depending on the type and size of the property. For example, annual permit fees range from AED370 for a studio to AED 1,200 for properties with four or more bedrooms.
Additionally, an annual subscription fee of AED320 must be paid when creating an account with DET. After submitting the application and fees, properties must undergo health and safety inspections.
Approval and ongoing requirements
Once the application has been reviewed, hosts will receive their license if everything is in order. The process may take two to three days, depending on the accuracy and completeness of the submitted documents.
After receiving the permit, hosts must also register to collect and remit the Tourism Dirham fee, a charge imposed on short-term rental bookings. Moreover, hosts should be aware of renewal deadlines, as permits must typically be renewed annually.
If the property is managed by a third party, the host must provide a management agreement, while properties that fall under a Homeowners’ Association (HOA) must comply with any HOA-specific regulations. Some communities have restrictions on short-term rentals and require prior approval.
Insurance coverage
Skigin also emphasised the importance of adequate insurance coverage, particularly short-term rental insurance and liability insurance.
“Your property must meet local health and safety standards,” Skigin said. “This may include a fire safety certificate – ensuring that the property has the necessary fire safety equipment – and a building compliance certificate, confirming the property complies with local building codes and safety regulations.”
Short-term rental insurance typically covers property damage, theft, and liabilities related to guest injuries.
Airbnb offers Host Protection Insurance, but it is limited and may not cover all potential claims.
Area restrictions, occupancy limits
Not all areas in Dubai allow short-term rentals. Certain residential areas have zoning laws that limit or prohibit short-term rentals to maintain the neighbourhood’s character and minimise disturbances.
“Make sure to check the zoning laws in your specific area of Dubai. Some districts may have restrictions or specific rules for short-term rentals, which can impact where you can operate,” she advised.
Commercial and mixed-use zones are generally more accommodating, as properties in these areas are designed for temporary guests.
Skigin explained that while Airbnb allows hosts to set maximum occupancy limits, these limits should be based on the size of the property, its amenities, and available services. Hosts can define these details in their listing, and guests are expected to follow the guidelines.
Regulatory changes
Since Airbnb’s arrival in Dubai, the regulatory environment has changed significantly. Initially, there were fewer regulations governing short-term rentals.
However, as the industry grew, authorities introduced stricter measures to control the market. Hosts are now required to register with the DET and obtain a permit to rent their properties legally.
To maintain quality and safety, properties must meet health and safety standards, and owners must secure proper insurance. Additionally, short-term rental hosts are required to pay a tourism fee, which is collected by platforms like Airbnb and used to fund tourism infrastructure and services.
Authorities have also stepped up enforcement, monitoring the market for non-compliance. Penalties, including fines and bans, may be imposed on those who fail to follow the regulations.
Seek professional assistance
Skigin recommended that property owners seek guidance from a property management company or legal expert to navigate the licensing process successfully.
Submitting accurate documents and staying informed about regulatory changes is essential to avoid delays and penalties.
“By staying informed, leveraging professional expertise, and maintaining good practices, you can navigate Dubai’s short-term rental licensing system effectively and ensure a smooth operation for your rental property,” she said.
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