The Dubai Land Department (DLD) will be responsible for establishing and periodically updating the index, according to Practical Guidance published by LexisNexis Middle East on the recently issued shared housing law (Dubai Law No. 4 of 2026).
Announced in March, the new law will take effect at the end of August 2026.
The index will take into account the technical and service specifications of individual shared housing units, the guidance note said. However, it does not specify when the index will be launched, how rents will be calculated or whether rates will be assessed by unit, room, bed space or the area allocated to each resident.
Dubai already operates a rental index that serves as an official benchmark for determining permitted rent increases during tenancy renewals. The new law provides an index tailored specifically to properties licensed for shared housing.
A note published by Mitchell’s Commercial Real Estate said the measure could make pricing across the segment more standardised, reduce informal rent-setting practices and improve transparency.
For landlords, the consultancy said this could mean less scope to impose aggressive pricing in unregulated arrangements, but greater predictability in rental performance and closer alignment with market benchmarks.
The DLD will also prepare standard tenancy and management contract templates for shared housing and publish them on its website, according to the LexisNexis guidance note.
The contracts must record key information, including the landlord’s details, the number of occupants, information about the property and the space allocated for shared accommodation.
The department will manage an electronic Shared Housing Register containing details of approved units, tenancy contracts and residents. This register will be linked to a unified digital permit platform operated by Dubai Municipality, the guidance note said.
Permits mandatory
Under the law, no person or entity will be allowed to designate a property for shared housing without first obtaining a permit.
Permits will generally be valid for one year and may be renewed for similar periods. Owners may request a two-year permit, while renewal applications must be submitted at least 30 days before expiry.
Dubai Municipality said they would be submitted through its digital channels once the relevant procedures and requirements are announced.
Permits will be issued only after authorities confirm that the property meets planning, construction, health, fire, sanitation, security and electrical safety requirements. Maximum occupancy, minimum space per resident and the availability of shared facilities will also be considered, according to the guidance note.
Owners and establishments already operating shared housing units will then have one year to bring their properties and operations into compliance. A one-time extension may be granted by the Director-General of Dubai Municipality where required, the LexisNexis note said.
Violations may result in fines ranging from Dh500 to Dh500,000. Repeat offences within one year may attract double the original fine, up to a maximum of Dh1 million.
The initiative comes as Dubai residential rents declined 6.2 percent quarter-on-quarter in the second quarter of 2026, while the emirate’s broader property market recorded 24,800 completed residential units during the first half of the year, reflecting strong supply growth across multiple housing segments.
