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Playbooks / Property

Dubai rent increase caps and the RERA rental index

How much can a Dubai landlord raise the rent?

How much a Dubai landlord may raise the rent, in five bands against the official index, and what it costs at the centre to refuse an increase over the cap.
The increase Decree 43 permits, by how far the rent sits below the market index. Up to 10% below, 0%. Up to 20% below, 5%. Up to 30% below, 10%. Up to 40% below, 15%. Up to Infinity% below, 20%. Measured against no increase permitted. no increase permitted Up to 10% below 0% Up to 20% below 5% Up to 30% below 10% Up to 40% below 15% Up to Infinity% below 20%

These are the statutory steps, not a negotiating range. A rent within ten percent of the index cannot be raised at all, however long the tenant has been there and whatever the landlord's costs have done.

The rule

Every page on this question prints the same five rows and then one worked example covering one year. The table is the easy part. The part that decides whether a tenanted property is worth buying is what happens on the second renewal, and the third, because the tier is recalculated each year against a gap your own increase has just narrowed.

What the decree actually says

Article 1 of Decree No. (43) of 2013 sets the maximum increase by how far the rent sits below the average rental value. These are the decree's own words, not a paraphrase of them.

How far below the indexMaximum increaseThe decree's wording
Up to 10%0%up to ten percent (10%) less than the average rental value
11% to 20%5%eleven percent (11%) to twenty percent (20%) less
21% to 30%10%twenty-one percent (21%) to thirty percent (30%) less
31% to 40%15%thirty-one percent (31%) to forty percent (40%) less
More than 40%20%more than forty percent (40%) less

So the permitted range runs from no increase at all up to a maximum of twenty percent, and which rung you are on is not a matter of opinion. Article 3 names the authority: the average rental value is determined by the Rent Index of the Emirate of Dubai approved by the Real Estate Regulatory Agency. Not the landlord's view of market rent, not the agent's, and not the rent the neighbour is paying.

The Smart Rental Index changed the number, not the rule

The Land Department's Smart Rental Index was launched on 2 January 2025. It rates buildings on their technical and structural characteristics, the quality of finishes and maintenance, location, and the services and facilities available, and it revalues continuously rather than once a year.

It did not change the tiers. Decree 43 still sets what you may add. What changed is the number you measure the gap against, and it changed in a way that matters: the comparable set is now the building, so two towers on the same street can return different averages, and an argument from what the neighbour pays is weaker than it used to be.

Notice, which is where landlords lose

Changing any term of a tenancy, rent included, requires the other party to be notified no less than ninety days before the date on which the lease contract expires, under Article 14 of Law No. (26) of 2007 as amended by Law No. (33) of 2008, unless the parties have agreed otherwise. Miss it and the tenancy renews on the existing terms.

Ending a tenancy on expiry because the owner wants to sell or occupy is a different provision. Article 25(2) requires the tenant to be notified of the reasons at least twelve months before the date of eviction, and the notice must be served through a Notary Public or by registered mail.

These are procedural, which is exactly why they decide disputes: a landlord with a perfectly good case loses it on service.

The part nobody models: four renewals, not one

Take a unit whose index average is AED 120,000 and whose sitting tenant pays AED 78,000. That is 35% below, so the first renewal permits 15%. Then the arithmetic turns on itself.

RenewalIndexRentGapPermitted
1120,00078,00035.0%15%
2120,00089,70025.3%10%
3120,00098,67017.8%5%
4120,000103,60413.7%5%
5120,000108,7849.3%0%
6120,000108,7849.3%0%

It stalls in year 5, at AED 108,784, permanently 9.3% below the index. Not because anyone refused, but because raising the rent is what moved it into the band where no increase is permitted. Every starting gap does this. From 50% below it takes five renewals and stops about 8% short; from 15% below it takes two and stops about 6% short. The ladder always terminates inside the bottom band, and it never terminates at the index.

So what is vacant possession actually worth

That is the same question asked in money. Against the identical unit bought empty and let at the index from day one:

YearShortfall, AED
142,000
230,300
321,330
416,396
511,216
Five year total121,242

And it does not end in year five. The rent is frozen 9.3% below the index, so the tenanted unit keeps giving up about AED 11,216 a year, indefinitely, under a flat index.

A buyer choosing between this unit tenanted and the one next door vacant now has a number instead of an instinct. If the vacant unit costs less than about AED 121,000 more, before any view on what happens after year five, it is the cheaper purchase. That comparison belongs in the net rental yield calculation, not beside it, and the first year figure is the one that goes into break-even occupancy.

A rising index makes it worse, not better

The obvious hope is that a rising market rescues you, because the cap is generous when the gap is wide. It does the opposite. Hold the same unit and let the index rise 5% a year:

RenewalIndexRentGapPermitted
1120,00078,00035.0%15%
2126,00089,70028.8%10%
3132,30098,67025.4%10%
4138,915108,53721.9%10%
5145,861119,39118.1%5%
6153,154125,36118.1%5%
7160,811131,62918.1%5%

The gap stops closing at 18.1% and stays there. Once it falls inside the 11 to 20% band, the 5% you are permitted is exactly the 5% the index is gaining, so rent and index rise together forever at the distance they happened to be when you arrived. The cap is a speed limit on catching up, and above a certain market growth rate the speed limit is the market's own speed.

This is the honest version of a sentence you will hear from an agent: that a below-market tenancy is fine because rents are rising. Rising rents are precisely what freeze the gap.

Where the index figure comes from

Both sides of this argument need the same number, and it is the one input nobody can guess. The Land Department publishes it through the rental index and rent calculator and through the Dubai REST app: you give the area, the property type, the number of bedrooms and the current rent, and it returns the average rental value for that building and the permitted increase that follows from it. Article 3 of the decree makes that output the reference, so a printout of it is the document to put in front of a landlord, and under the Smart Rental Index it is specific to the building rather than to the street.

What it costs to refuse an increase over the cap

Everything above says what a landlord may ask for. None of it says what it costs to say no, which is the question a tenant holding an over-cap notice actually has. It has a published answer, and no page on this query prints it.

The Rental Disputes Centre was established by Decree No. (26) of 2013. Article 6 gives it "the exclusive jurisdiction to: determine all Rent Disputes that arise between Landlords and Tenants of Real Property situated in the Emirate, including in free zones", so there is one forum and no choice of venue. Article 23 does not set the fee: the Centre charges fees "as determined pursuant to a resolution of the Chairman of the Executive Council", which is why the figure is published by the Centre rather than found in the decree. These are the Centre's own lines.

What you payThe Centre's wording
Registering the claim3.5% of Annual Rent or Lease Value if it is more or less than a year
The floor and the ceiling on that feeFee not less than (AED 500) and not more than (AED 20,000)
Process serviceProcess Service: AED 100
Knowledge feeAED 10 Knowledge fee
Innovation feeAED 10 Innovation fee
If conciliation settles ithalf of the court fee paid for basic claims is refunded

The base is the rent, not the dispute. That is the line that decides whether a complaint is worth making. A tenant arguing about an increase of a few thousand dirhams pays a percentage of the entire annual rent to argue about it, and pays the same whether the amount in dispute is AED 500 or AED 50,000.

The percentage is also only a percentage in the middle. Below an annual rent of AED 14,286 the AED 500 floor is charged instead, and above AED 571,429 the AED 20,000 ceiling is, so the all-in cost sits in a narrow band across every tenancy in between.

Annual rentRegistration feeContested, all inSettled at conciliationAll in, as % of rent
50,0001,7501,8709953.7
78,0002,7302,8501,4853.7
120,0004,2004,3202,2203.6
250,0008,7508,8704,4953.5
600,00020,00020,12010,1203.4

Conciliation is the cheap route, and the decree says so in money rather than in encouragement. A dispute goes first to the Mediation and Conciliation Directorate, which under Article 10(f) will seek to settle it "within a period not exceeding fifteen (15) days from the date of appearance of the parties before it", and under Article 10(i) "One-half of the fee will be refunded if amicable settlement is reached" between the parties. A tenant who is plainly right about the cap has the cheaper path available precisely because being plainly right is what makes a settlement happen.

The smallest over-charge worth refusing

Put the fee against the thing it buys. On the worked tenancy above, the index average is AED 120,000 and the sitting rent is AED 78,000, so the first renewal permits 15% and a lawful rent of AED 89,700. Suppose the landlord serves 20% instead, the top of the decree's ladder, and asks for AED 93,600. The excess is AED 3,900 in the first year.

The Centre's base is the annual rent or lease value and its wording does not say which contract is meant when a renewal is the thing in dispute. The demanded contract at AED 93,600 gives a registration fee of AED 3,276; the existing one at AED 78,000 gives AED 2,730. Take the higher, add the AED 120 of fixed lines, and a contested filing costs AED 3,396.

So the fee takes 87.1% of the first year's gain. Settle at conciliation and the refund brings the cost to AED 1,758, which is 45.1% of it.

That generalises into a threshold. The one-year break-even over-charge is the registration percentage plus the fixed lines spread over the rent, which on this tenancy is 3.6% of the annual rent contested and 1.9% settled. The decree's bands step in five-point intervals. So a landlord who demands one whole tier more than permitted is just worth refusing on the first year alone, and a landlord who demands two or three points more than permitted is not, because the fee is larger than the over-charge, and the honest advice is to pay it and serve the correct notice next year.

What the ladder does to a wrongful increase

The first year is not the whole of it, and the argument you will hear, that an unlawful increase is permanent so any fee is worth paying to stop it, is wrong on this page's own mechanism.

Raising the rent is what moves it into a band where less is permitted. A tenant who pays 20% where 15% was lawful arrives at the top of the ladder sooner, and then stops there at a lower rent than the tenant who paid correctly. Both paths from the same renewal, same index, held still:

YearLawful rentRent after the over-chargeDifferenceCumulative
189,70093,6003,9003,900
298,670102,9604,2908,190
3103,604108,1084,50412,694
4108,784108,108-67612,018
5108,784108,108-67611,342
6108,784108,108-67610,666
7108,784108,108-6769,990
8108,784108,108-6769,314

The overpayment peaks at AED 12,694 in year 3 and then starts coming back. The lawful path stalls at AED 108,784, the 9.3% below the index this page began with. The over-charged path stalls at AED 108,108, because 20% carried the rent across a tier boundary a year earlier. From year 4 the tenant who overpaid pays AED 676 a year less than the one who did not, and on a flat index the entire overpayment is clawed back by year 22.

Two conclusions, pointing opposite ways, which is presumably why neither gets written down. The case for refusing is about the first three years and not about a permanent rent: AED 12,694 against a contested filing cost of AED 3,396 is worth having, by a factor of 3.7. And the case against is that a long tenancy repairs the damage on its own, so an argument in year eighteen is about timing rather than about money.

In most of these disputes the first judgment is the last

Every guide to this process describes three stages, and for a rent cap dispute that is usually wrong. Article 17(a) of the decree carves out judgments issued in rent claims worth less than one hundred thousand dirhams, "which will be final and not subject to any form of appeal". The Centre states the same rule from the other side: an appeal brought on a financial claim alone needs the claimed amount to be AED 100,000 or more, while an eviction may be appealed whatever it is worth.

An over-cap increase of a few thousand dirhams is nowhere near that floor. So there is no appeal to budget for, no fifteen-day window under Article 18 to meet, and no security of half the award to find. Equally, one hearing is all there is, which is the argument for having the tenancy contract, its Ejari registration, the index printout and the ninety-day notice in order before the dispute rather than during it.

The tenant's side of the same rule

The rule is symmetrical in usefulness. A tenant facing an increase can run the Land Department's own calculator, and anything above the permitted figure can be declined without argument, because the figure is not a negotiating position. What the sections above add is the price of insisting, and the threshold below which insisting costs more than conceding.

The same Centre is where unpaid service charges end up as well, through the execution judge named in Article 32(b) of the jointly owned property law, so the forum is worth knowing as an owner and not only as a tenant.

Run your own numbers on the Dubai rent increase calculator, and if you are weighing a tenanted purchase, read due diligence before an offer next, because the tenancy contract and its Ejari registration are documents to read before the price is agreed rather than after.

Every instrument cited on this page, with what it sets in its own words, is on the Dubai property law register.

The arithmetic

Permitted increase on renewal, Decree 43 of 2013 measured against the RERA rental index average up to 10% below the index no increase 11% to 20% below up to 5% 21% to 30% below up to 10% 31% to 40% below up to 15% more than 40% below up to 20% The part that is not a table, because the tier is recalculated every year against a gap your own increase just narrowed: each renewal gap = (index - rent) / index increase = tier(gap) rent = rent x (1 + increase) repeat The sequence terminates inside the 0 to 10% band, every time, from every starting gap. It does not terminate at the index. Notice, Law 26 of 2007 as amended by Law 33 of 2008 changing any term, rent included 90 days (Art 14) eviction for sale or own use 12 months (Art 25/2) service notary or registered mail The cost of refusing an increase over the cap registration = 3.5% of the annual rent, floor AED 500, ceiling AED 20,000 fixed lines = AED 100 process service + AED 10 + AED 10 settle at conciliation and half the registration comes back one-year break-even over-charge = 3.5% of the annual rent + AED 120 which is why a demand one tier above the cap is worth refusing and a demand two or three points above it is not The buyer's arithmetic Year one yield uses the passing rent. Every later year uses a rent the law rations. Vacant possession removes the constraint, and is priced accordingly, and this is how you work out what that price should be.

Where it breaks

  • The schedules on this page hold the index still, and the index does not hold still. They are a model of the rationing mechanism, not a forecast of your rent, and the second one shows what a moving index does to the answer.
  • The tiers apply to the permitted maximum, not to an automatic entitlement. A landlord may still agree less, and in a soft market frequently should.
  • Notice served incorrectly defeats an otherwise valid increase. Procedure decides more disputes here than substance does, and a message on a phone is not service.
  • The decree is written in whole percentages and says nothing about a gap of ten point four percent. This page reads the bands as continuous, and the Land Department's own calculator is the authority on a gap sitting on a boundary.
  • It applies to renewal of an existing tenancy. A new tenancy with a new tenant is a different transaction, which is why vacant possession is worth paying for.
  • The index now rates the building, so the comparable set is narrower than it was and two towers on the same street can return different averages. The old habit of arguing from the rent next door is weaker than it used to be.
  • Rules and tiers are set by decree and can be amended, so a framework page is a starting point rather than a current legal position.
  • The clawback schedule holds the index still. A rising index does not repair an over-charge the same way, because both paths keep climbing, so that comparison has to be run again at the growth rate you actually expect.
  • The centre bases its fee on the annual rent or lease value without saying which contract is meant when a renewal is the thing in dispute. This page takes the higher of the two, which overstates the fee and understates the case for filing rather than the reverse.
  • This is general information and not legal advice. A live dispute belongs with the Rental Dispute Centre or a lawyer, not with a calculator.

When to use it

Before buying any tenanted property, because the achievable rent is a legal question before it is a market one, and because the difference between the passing rent and the index is the number that tells you what vacant possession is worth. Also every year before serving or receiving a renewal notice.

Run it on your own numbers

The Dubai Rent Increase does this arithmetic for you, in your currency, in about thirty seconds.

Open the calculator

Sources

  1. Decree No. (43) of 2013 determining rent increase for real property in the Emirate of Dubai
  2. Law No. (33) of 2008 amending Law No. (26) of 2007 regulating the relationship between landlords and tenants in Dubai
  3. Dubai Media Office, Dubai Land Department launches the Smart Rental Index 2025
  4. Dubai Land Department, rental index and rent calculator
  5. Decree No. (26) of 2013 concerning the Rent Disputes Settlement Centre, Articles 6, 10, 17, 18 and 23
  6. Rental Disputes Centre, published fees for registering a claim

Last reviewed . Commercial relationship disclosure: the author works in Dubai real estate brokerage. See the disclosure standards. Disclosure standards.