Dubai’s holiday home market is red-hot in 2025. Investors from across the globe are tapping into the city’s ever-growing tourism appeal. With the right strategy, owning a licensed short-term rental can yield significant profits. But it all starts with understanding the holiday home license cost in Dubai.
In this guide, we break down everything—from official fees and hidden costs to ROI insights and licensing hacks.
Why Dubai’s Holiday Home Market Is Booming in 2025
Tourism Growth & Demand Surge
Dubai remains a magnet for global travelers. In 2025, over 25 million tourists are expected to visit the emirate. This tourism boom has supercharged the demand for short-term rentals.
Why? Tourists increasingly prefer holiday homes over hotels. The reasons are clear:
- More privacy
- Cost-effectiveness
- Home-like amenities
- Prime locations like Marina, JBR, and Downtown Dubai
Licensed properties now enjoy occupancy rates above 75%. Many investors are witnessing full bookings during high seasons, including Expo follow-up events, global conferences, and holidays like Eid and New Year’s Eve.
How Much Does a Holiday Home License Dubai Cost?
Before diving into Dubai’s holiday home rental market, it’s essential to understand the full financial picture. While the registration and permit fees may seem straightforward, several hidden and variable charges can affect your investment ROI.
Here’s an updated 2025 cost table based on the latest DET data and competitive insights:
Holiday Home License Cost Breakdown (2025)
| Category | Cost (AED) | Details |
|---|---|---|
| Initial Registration Fee | 1,500 | One-time DET application fee |
| Knowledge Fee | 10 | DET-mandated fee |
| Innovation Fee | 10 | DET-mandated fee |
| Permit Issuance Fee (Per Bedroom) | 300 | Annual fee per bedroom |
| Holiday Home Classification Certificate | 50 | For Standard or Deluxe classification |
| Annual Renewal Fee (Per Bedroom) | 300 | Payable yearly |
| Tourism Dirham Fee (Standard) | 10 per night | Charged per occupied bedroom per night |
| Tourism Dirham Fee (Deluxe) | 15 per night | For Deluxe-rated units |
| Municipality Fee | 10% of rental income | Deducted monthly from bookings |
| Ejari Registration | 195 | Required for tenancy verification |
| DEWA Deposit | 2,000–4,000 (refundable) | Based on property size and consumption estimate |
| Home Insurance | 1,000–2,000 annually | Mandatory for all licensed units |
| Furnishing & Setup | 20,000–60,000 (one-time) | Depends on property condition and classification |
| Property Management (Optional) | 15%–20% of rental income | For outsourced services like Airbnb hosting, guest check-ins, etc. |
| Cleaning & Supplies (Ongoing) | 150–250 per guest turnover | Varies depending on property size and service level |
| VAT (if applicable) | 5% (may apply to short-term rental income) | Subject to DET policy in late 2025 |
| Smart Tech Tools (Optional) | 1,000–3,000/year | Includes auto check-in, guest messaging, dynamic pricing |
| Trade License (if operating as company) | 10,000–15,000 annually (optional) | Required if you want to manage multiple units as a business |
✅ Note: Costs like the Municipality Fee and Tourism Dirham are recurring and directly tied to guest stays. Tracking them monthly is essential for profitability.
Holiday Home ROI Calculator (Dubai 2025)
ROI Potential
Short-term rentals offer 7% to 11% annual returns, far better than many traditional rental models.
During peak tourist seasons or major events, hosts can charge a 30% premium or more. A 2-bed unit that rents for AED 400/night could fetch AED 600/night during events like Gitex or the Dubai Shopping Festival.
For smart investors, this translates to flexibility, control, and high yield.
Breaking Down the 2025 Holiday Home License Costs
Official Fees (DET/DTCM)
The Dubai Department of Economy and Tourism (DET) oversees holiday home licensing. As of 2025, here’s a breakdown of the main costs:
- Registration Fee: AED 1,520
(Includes AED 10 Knowledge Fee + AED 10 Innovation Fee) - Annual Permit Fees (per unit):
- Studio/1-bedroom: AED 370
- 4-bedroom or larger: AED 1,270
- Tourism Dirham Fee: AED 10 to AED 15 per room per night
(This is paid monthly based on actual bookings.)
Hidden Costs Most Investors Miss
Beyond official fees, you’ll need to account for additional costs:
- Ejari Registration: AED 195
(Required to prove property tenancy or ownership) - DEWA Deposit: AED 2,000–4,000 (refundable)
(Depends on property type and usage) - Mandatory Home Insurance: AED 1,000–2,000 annually
- Furnishing & Setup Costs: AED 20,000–60,000 (varies by size and quality)
- Property Management Fees: 15–20% of monthly revenue
(If you hire a professional short-term rental agency) - Cleaning, laundry, and guest supplies: Ongoing operational costs
(Roughly AED 150–250 per turnover)
Step-by-Step Licensing Process (2025 Updates)
Pre-Application Checklist
Before you apply, ensure the following:
- Title Deed (if owned) or Tenancy Contract + NOC from the landlord
- Latest DEWA Bill
- Valid Emirates ID or passport copy
- NOC from developer or building management
- Location Eligibility:
- For apartments: Must be in buildings with 4+ units
- For villas: Must face a main road or be in a gated community
DET Portal Walkthrough
Apply through the DED Trader or DET Holiday Home portal:
- Create an account with UAE Pass or Emirates ID
- Upload documents and select property classification:
- Standard
- Deluxe
- Pay the licensing and registration fees
- Schedule an optional inspection (mostly waived for deluxe-rated homes)
Timeline: Approval typically takes 2–5 business days.
Smart Cost-Saving Strategies for License Holders
Bulk Licensing for Portfolio Owners
If you own or manage multiple units, bulk licensing is your best friend.
- Corporate investors can bundle applications to save time and money
- DET may offer discounts for volume licensing
- A single trade license can cover up to 5–10 units, depending on business setup
DIY vs. Agency Costs
You have two main choices:
- Self-Application:
- Total cost: Around AED 1,520
- Best for hands-on investors with time to spare
- Hiring a Holiday Home Consultant:
- Cost: AED 10,000–15,000 (including trade license, NOCs, portal management)
- Ideal for international investors or busy professionals
Tip: Do it yourself if you’re comfortable navigating UAE systems and regulations. Otherwise, a seasoned agency can handle end-to-end compliance.
Compliance & Penalties: Avoid Costly Mistakes
Top Violations in 2025
Compliance is non-negotiable. DET has tightened regulations this year.
Common mistakes (and penalties):
- Unregistered Listings: AED 5,000 per listing
(Applies to platforms like Airbnb, Booking.com, etc.) - Failure to Submit Guest Passports: AED 1,000 per offense
(All guests must be logged in DET system) - Late Renewal: AED 200–500 fine depending on delay
- Overcrowding or Noise Complaints: Fines + potential blacklisting
Annual Renewal Hacks
- Renew Early: Save time and avoid late fees
- Use DET’s Auto-Renew Feature: Automates paperwork and payment
- Install Guest Management Tools: Ensure all check-ins are logged correctly
Pro tip: Keep digital copies of guest passports and payment records for at least 12 months.
ROI Calculator: Is a Holiday Home License Worth It?
Case Study: 2-Bed Apartment in Dubai Marina
Let’s do the math.
License Costs:
- Annual DET License: AED 670
- Tourism Dirham Fee: AED 10 x 2 bedrooms x 180 nights = AED 3,600
(Assuming 60% occupancy)
Operational Costs:
- Cleaning & supplies: AED 12,000/year
- Internet, DEWA, maintenance: AED 8,000/year
- Total: AED 23,270/year
Revenue Potential:
- Average nightly rate: AED 400
- Booked nights: 300/year
- Total Revenue: AED 120,000
Net Profit: AED 96,730/year
ROI on setup (AED 60,000 initial investment): ~160% in Year 1
Future-Proofing Your Investment
2025 Regulatory Trends
The DET is eyeing several new rules to further regulate the sector:
- VAT on short-term rentals: Under review. May apply later in 2025.
- Mandatory Safety Audits: Smoke detectors, fire extinguishers, and digital locks becoming mandatory.
Stay updated by subscribing to DET alerts or working with a local consultant.
Tech Integration
Invest in smart tools to boost guest experience and slash overheads:
- Automated check-in systems (like ChargeAutomation or Hospitable)
- Dynamic pricing software to maximize revenue
- Digital guestbooks and self-checkout tools
These platforms help you comply with regulations while impressing guests with seamless service.
Conclusion
With Dubai’s holiday home market expected to grow by 12% in 2025, getting licensed is more than a regulatory checkbox—it’s a strategic investment move.
Yes, the cost of a holiday home license in Dubai includes more than just the DET fee. But when planned right, the returns easily outweigh the expenses.
Whether you’re a local landlord or an overseas investor, Dubai’s short-term rental market is ripe with opportunity. Just follow the rules, optimize your property, and focus on guest satisfaction.
Need help navigating the process? Partner with staybetterdxb.ae for expert support—from cost planning and licensing to listing optimization and compliance.
FAQ’s
How much is a holiday homes license in Dubai?
A holiday home license in Dubai costs AED 1,520, including registration and innovation fees. You’ll also pay an annual permit fee starting at AED 370 per unit, plus AED 10–15 per night as a Tourism Dirham fee.
How to start a holiday home business in Dubai?
To start a holiday home business in Dubai, register your property with the Dubai DET, submit required documents (title deed, Ejari, NOC), and pay the applicable fees. Once approved, you can legally list your property on short-term rental platforms.
How much is home business license in Dubai?
A home-based business license in Dubai (such as eTrader or freelance permit) typically starts at AED 1,070 to AED 2,500 annually. However, for holiday homes, you must get a short-term rental license through the DET, starting at AED 1,520.
How to get a short-term rental license in Dubai?
Apply via the Dubai DET portal with documents like title deed, DEWA bill, and NOC from the developer or landlord. Choose your property type, pay the required fees, and receive approval within 2–5 working days.
