Short-term rentals aim to outperform long-term leases in Dubai — provided you hold a DTCM Holiday Homes licence and a well-located property.
On this page
- Short-term rentals in Dubai via Airbnb: what yield can you really expect?
- Airbnb or standard lease: what yield base does each district start from?
- Which district should you choose for a profitable holiday home in Dubai?
- How do you obtain the holiday home permit and operate your property legally?
- What does buying a holiday home really cost, and how do you finance it?
- What taxation and legal framework apply to an Airbnb host in Dubai?
Short-term rentals in Dubai through Airbnb (holiday homes) start from the same gross rental yield as long-term leases, ranging from 5 to 8% depending on the district in 2025 according to Bayut data. The principle: a furnished property rented out nightly to tourists can generate more, over a strong occupancy year, than an annual lease — but that potential hinges on location, occupancy rate and a specific licence.
This additional income comes at a cost: a Holiday Homes licence issued by the Department of Economy and Tourism, a furnishing budget, and more hands-on management than a standard lease. Here we walk through the principle, choosing the right district, the permit, purchase costs and taxation before you get started.
Short-term rentals in Dubai via Airbnb: what yield can you really expect?
Short-term rentals in Dubai start from the long-term gross rental yield, which sits between 5 and 8% depending on the district in 2025 according to Bayut data — 7 to 10% in affordable districts like Jumeirah Village Circle, Arjan or International City, and around 5 to 6% in premium areas like Downtown or Marina.
A holiday home is a furnished property rented out nightly or weekly to tourists, regulated by the Department of Economy and Tourism (DTCM). It stands in contrast to the long-term lease registered under Ejari.
Be mindful of what the figure represents: the Bayut yield is a calculated long-term yield, i.e. the annual rent per square foot divided by the price per square foot. Short-term rentals build on that base through a nightly rate multiplied by an occupancy rate — but the result is still a gross yield, before costs and vacancy, and never guaranteed.
Airbnb or standard lease: what yield base does each district start from?
The starting point for any holiday home is the long-term yield of its district. Take Dubai Marina, an established tourist district listed at AED 2,376/sq ft for sale, with a calculated gross yield of 5.8% according to Bayut data (March 2026).
For an 800 sq ft apartment in Dubai Marina, the price works out at around AED 1.9M (2,376 AED/sq ft × 800 sq ft, Bayut data). On an annual lease, a 5.8% gross yield corresponds to a rent of roughly AED 110,000 per year (AED 1.9M × 5.8%). With short-term rentals, matching that same income means, for example, an average nightly rate of around AED 600 occupied for roughly half the year: it's the real occupancy rate — not the price of one great week — that decides whether the margin beats an unfurnished lease.
The starting base varies sharply from one district to the next. In Jumeirah Village Circle, AED 1,523/sq ft for a calculated gross yield of 7.2% (Bayut data, March 2026), the entry price stays low. Conversely, Palm Jumeirah illustrates the beachfront premium: AED 4,336/sq ft, rent of AED 196/sq ft/year, calculated gross yield of 4.5% (Bayut data, March 2026) — high entry price, lower rental yield, but some of the strongest tourist demand in the city.
Here we compare gross income potential only. Understanding the difference between gross and net yield is what turns an advertised rent into the return you actually collect, and moving from gross to net — including costs and vacancy — is detailed in our guide to rental management.
Which district should you choose for a profitable holiday home in Dubai?
A good short-term rental district combines strong tourist demand with an entry price that fits your budget. Two logics coexist: the premium sought after by travellers, and the affordable with its low entry point.
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The tourist and beachfront premium
- Downtown Dubai — AED 3,454/sq ft, calculated gross yield 5.6% (Bayut data, March 2026): Burj Khalifa, Dubai Mall, a tourist magnet all year round.
- Business Bay — AED 2,445/sq ft, calculated gross yield 5.8% (Bayut data, February 2026): the canal, office towers, next to the centre.
- Dubai Islands — AED 2,379/sq ft, +4.1% over 12 months (Bayut data, March 2026) and Dubai Maritime City — AED 2,785/sq ft, calculated gross yield 4.8%: the beachfront and resort play.
The affordable with high yields
- Arjan — AED 1,485/sq ft, calculated gross yield 7.1% (Bayut data, March 2026).
- Dubai Sports City — AED 1,318/sq ft, calculated gross yield 6.8% (Bayut data, March 2026).
These districts combine a low entry price with a high long-term yield. For a full ranking of the best areas in Dubai for rental yield, from affordable tickets to liquid premium, see our dedicated comparison; choosing a district based on your investment goal is explored further in our dedicated district guide, while here the angle stays strictly on tourist demand.
How do you obtain the holiday home permit and operate your property legally?
Short-term rentals require a Holiday Homes licence issued by the Department of Economy and Tourism, according to the official Dubai Land Department FAQ: a tourist property falls under the holiday homes system approved by the DET and cannot be registered through a simple Ejari account, which is reserved for long-term leases.
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You can operate directly or entrust the property to a licensed operator. Keep in mind what sets tourist accommodation apart: guest turnover, cleaning, check-ins and DTCM compliance are far more demanding than an annual lease.
Like any strata property, a holiday home carries annual service charges of AED 3 to 30/sq ft/year, regulated through RERA's Mollak system according to the RERA / DLD Service Charge Index — roughly AED 10 to 20/sq ft/year for an apartment, 20 to 50+ for a luxury tower.
To target short-term rentals from the construction stage, a project like Six Senses Residences (Select Group, Dubai Marina, handover July 2028) ticks the tourist-location box. When buying off-plan, your funds are secured in a mandatory escrow account (Law No. 8 of 2007, RERA/DLD oversight).
What does buying a holiday home really cost, and how do you finance it?
Beyond the listed price, budget for acquisition costs: 4% of the price in transfer fees to the Dubai Land Department, around AED 4,700 to 5,500 in DLD fixed fees, and, in the resale market, agency fees of 2% of the price plus 5% VAT (source: Property Finder).
| Item | Amount |
|---|---|
| DLD transfer fee | 4% of the price |
| DLD fixed fees | ~AED 4,700 to 5,500 |
| Agency fees (resale) | 2% + 5% VAT |
On the financing side, a non-resident can in practice obtain a loan of 50 to 75% of the value, i.e. a down payment of 25 to 50% depending on the bank (source: CBUAE Rulebook). The details on lending and down payments appear in our guide to financing.
Among the projects we track, entry tickets range from AED 500,000 to AED 2M, with a median of AED 1.2M across 107 projects with disclosed pricing. An accessible project in a tourist district: Aspirz (Danube Properties, Dubai Sports City), from AED 900,000, handover December 2028.
One final item, specific to tourist accommodation and absent from an unfurnished lease: furnishing and equipment. A holiday home requires a set-up budget — furniture, bedding, a fitted kitchen, décor — to provision before the first booking.
What taxation and legal framework apply to an Airbnb host in Dubai?
In Dubai, individuals pay no income tax on rental income and no tax on real estate capital gains: the rate is 0% according to the official UAE government portal. This framework applies whether the property is let on an annual lease or short-term.
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The details — treatment of rental income, the situation of someone who is a tax resident elsewhere, records to keep — are developed in our guide to rental income.
One point deserves attention for short-term rentals: operating holiday homes under a DTCM licence is treated by the Federal Tax Authority as an economic activity, unlike standard residential letting under Ejari. The corporate tax and ownership-structure implications are covered in our guide to holding property through a company.
With my clients targeting short-term rentals, the most common mistake I see is fixating on the nightly rate while forgetting furnishing, cleaning and the quiet summer months: the real question is the occupancy rate across the year, not the price of one great week in December.
— Zakaria SEBAIBI, Real Estate Consultant
We set up and manage the DTCM licence as well as the short-term operation of your property, from initial fit-out to welcoming guests. Discover our approach on the Dubai market page.
This article is part of our guide
Dubai Property Investment Guide for Foreign Buyers
About the author
Zakaria SEBAIBI
Real Estate Consultant
Originally from Asnières-sur-Seine and holding a Master's degree in finance, Zakaria specializes in the sale of off-plan real estate properties. With a long-term vision and a spirit of shared trust, he stands out for his excellent listening skills and his ability to understand his clients' needs. Resilient and determined, he puts his expertise at the service of those wishing to invest in the off-plan market, ensuring personalized support.
