Freehold and leasehold in Dubai: which is which

Dubai's property market is usually described as split between freehold and leasehold areas. The split is real. It does not turn on the reputation of a neighbourhood, though, but on whether a particular land plot number appears in a Ruler's regulation. Law No. (7) of 2006 Concerning Real Property Registration in the Emirate of Dubai restricts the right to own real property in the emirate to UAE nationals, nationals of the Gulf Cooperation Council member states, companies fully owned by these, and public joint stock companies. Everything a foreign buyer can hold comes from a single exception in Article 4.

Article 4 permits the Ruler to designate areas in which non-UAE nationals may be granted freehold ownership of real property "without time restrictions", or "usufruct or leasehold over Real Property for a period not exceeding ninety-nine (99) years". Regulation No. (3) of 2006 then named the areas and, plot by plot, the numbers. That is the whole architecture. When a brochure says freehold, it is making a claim about that list.

Where 2002 sits in the record

A 2002 decree is widely cited as the moment Dubai opened to foreign buyers. The published legislation is more reticent. Law No. (7) of 2006 recites the instruments it was issued after: Federal Law No. (5) of 1985 issuing the Civil Code, Federal Law No. (11) of 1992 issuing the Civil Procedure Law, Law No. (7) of 1997 Concerning Land Registration Fees, and the Decree of 1960 Establishing the Land Affairs Committee. No 2002 instrument appears in that list. The only repeal the 2006 law makes is of a decree dated 6 November 1977 concerning transactions relating to the disposal of land. The safer reading is that policy moved in 2002 and the register caught up afterwards.

Law No. (7) of 2006 was issued on 13 March 2006 and came into force on the day it was published in the Official Gazette. Regulation No. (3) of 2006 followed on 7 June 2006.

What the 2006 regulation actually names

Article 3 of the regulation lists 23 areas, and against each of them specific plot numbers. Over those plots a non-UAE national may take freehold without time restriction, usufruct, or a lease of up to 99 years. Article 4 then treats one plot on its own. Plot 224 in Nad al-Sheba carries usufruct or lease rights of up to 99 years and no freehold at all, while plots 209, 215 and 222 in the same area sit in Article 3 and do carry freehold. Same area name. Different plots. Different rights.

The list grows one resolution at a time

Land has been added by separate resolutions rather than by redrafting the 2006 regulation. Resolution No. (18) of 2019, issued 4 September 2019, added plot 69 in Trade Centre Second and plots 120, 121 and 122 in Zaabeel Second. Resolution No. (7) of 2021, issued 3 March 2021, added 21 plots in Madinat Al Mataar. Resolution No. (6) of 2022, issued 28 February 2022, added plots 58 and 59 in Zabeel First. Each grants freehold without time restriction alongside usufruct and lease rights of up to 99 years, except where the resolution says otherwise. There is no single consolidated list in force. Establishing the status of one plot means reading the 2006 regulation and every adding resolution since, or asking the Land Department directly.

What a leasehold term looks like

Ninety-nine years is a ceiling rather than a norm. Article 4(b) caps usufruct and leasehold at that figure and sets no minimum. The Land Department's own description of its usufruct and musataha registration service puts usufruct at up to 99 years and musataha, the right to build on another party's land, at up to 50 years. Those are different instruments with different fees, and the paperwork for one will not serve for the other.

Registration is where long leases and ordinary tenancies part company. Article 6 makes the Department the only entity authorised to register real property rights and long-term leasehold contracts. Ordinary tenancies fall under Law No. (26) of 2007, issued 26 November 2007, whose Article 4(2) requires registration with RERA and bars the courts from hearing a dispute over a contract that has not been registered. Practitioners usually describe the dividing line between the two registers as ten years. Neither law states a figure. Where a proposed term sits near that line, settle which register applies before the contract is signed.

Fees, and an inconsistency inside them

Article 3(1) of that resolution provides that "unless agreed otherwise, the Fee for the sale of Real Property will be shared equally by the seller and purchaser". The opening words do a great deal of work, and sale contracts routinely allocate the whole 4% to one side.

The long-lease fee is expressed three ways in three official places. Article 3(2) of the 2013 resolution sets it at 2% of the value of the real property from the landlord or usufruct holder and 2% from the tenant. Item 14 of the schedule to the same resolution puts it at 4% of the total value of the lease contract. The Department's usufruct and musataha service page states 2% of the rental value from each side. Property value, contract value and rental value are not the same number. Have the registration trustee compute the figure in writing before committing to it.

Converting leasehold to freehold

Two routes carry published figures. Item 43 of the 2013 schedule prices the conversion of a lease contract of under 99 years, executed before that resolution took effect, into a freehold contract at 1% of the value of the real property. Separately, on 19 January 2025 the Land Department announced that private property owners on Sheikh Zayed Road, from the Trade Centre Roundabout to the Water Canal, and in Al Jaddaf could convert to freehold ownership, open to all nationalities. The Department gave the eligible numbers as 128 plots on Sheikh Zayed Road and 329 in Al Jaddaf, 457 in total, with a conversion fee of 30% of the property's valuation based on Gross Floor Area. Owners check eligibility through the Dubai REST app.

The difference that shows up at resale

A freehold resale transfers something that does not shrink. Article 22 has the Department issue title deeds from the data recorded in the Property Register, Article 24(1) gives those deeds absolute evidentiary value in verifying real property rights, and Article 7 gives the register itself absolute evidentiary value against all parties, which may not be impugned unless proven to be the result of fraud or forgery. Nothing runs down.

A leasehold resale transfers a term. Every year of ownership takes a year off what can be sold on. A 99-year lease granted in 2006 has 79 years left as at September 2026, and the buyer is pricing those 79 years rather than the building. The assignment itself has to be recorded to be valid under Article 9, and amending the registration of a long-term lease contract carries a fee of AED 1,000. Article 24(2) requires any conditions, undertakings or restrictions concerning the rights to be stated in the record of the real property unit. Read the folio, not the brochure.

Arrangements that do not survive scrutiny

Article 26 deals with workarounds. Any agreement or disposition in breach of the law is null and void, and so is any agreement or disposition made with the intention of circumventing it. Invalidity may be invoked before the court by any interested party, by the Department, by the Public Prosecution, or ordered by the court on its own initiative. A nominee arrangement holding a plot outside a designated area for a foreign beneficiary therefore carries a risk that does not depend on either side to the arrangement complaining.

Ask for the land plot number in writing before anything is signed, then check it against Article 3 and Article 4 of Regulation No. (3) of 2006 and every adding resolution issued since. Area names are marketing. Plot numbers decide.