Conversion from Leasehold to Freehold Properties in Dubai – New Ownership Model Expands Opportunities for Landowners and Investors
I. Eligibility and Process for Freehold Conversion
The initiative grants property owners in the designated areas the ability to transition from leasehold to freehold ownership. Freehold status provides absolute ownership of the property and the land it is built on, allowing owners full control to sell, lease, or use the property without restrictions from the landowner.
To determine eligibility for conversion, property owners can access the Dubai REST app, a smart platform provided by the DLD. If eligible, the application process involves the following steps:
- Application Submission: Property owners must apply to the Dubai Land Department for land assessment and valuation.
- Valuation and Fees: Following valuation, common area fees and service charges are calculated based on guidelines established by the Real Estate Regulatory Authority (RERA).
- Conversion Fee: A fee equivalent to 30% of the property’s valuation, calculated on its gross floor area, must be paid to complete the conversion process.
- Final Documentation: Once payment is processed, the DLD issues a freehold ownership title deed along with an updated property map.
This process enables a seamless transition to freehold ownership, granting property owners greater market flexibility and long-term value.
II. Economic and Market Impacts
The introduction of freehold ownership for these areas is anticipated to bolster the economic appeal of Sheikh Zayed Road and Al Jaddaf, benefiting landowners by increasing the market value of their properties. This move aligns with Dubai’s broader objectives under the Real Estate Strategy 2033, which aims to:
- Increase real estate transactions by 70%.
- Raise the total market value of Dubai’s real estate sector to AED 1 trillion.
- Expand the emirate’s real estate portfolio value to AED 20 billion.
By opening these areas to all nationalities, the initiative is also expected to attract a diverse pool of global investors. It paves the way for new developments that cater to freehold investors, fostering sustained growth in the real estate sector and contributing to Dubai’s reputation as a leading destination for investment.
III. Leasehold vs. Freehold Ownership
The transition from leasehold to freehold ownership addresses a key limitation of the leasehold model. Under leasehold, property rights are tied to a fixed term—up to 99 years—and exclude land ownership. Leaseholders are restricted in making changes or transactions without the landowner’s approval. Conversely, freehold ownership offers absolute rights over the property and the land, providing full flexibility in its use, sale, or leasing arrangements.
IV. Strategic Development Zones
The designated areas—Sheikh Zayed Road and Al Jaddaf—hold strategic importance. Sheikh Zayed Road is one of Dubai’s most prestigious business corridors, home to iconic landmarks and a thriving commercial ecosystem. Al Jaddaf, a growing area with strong infrastructure and development potential, presents opportunities for residential, commercial, and mixed-use projects. The initiative aligns with recent advancements such as Dubai’s smart rental index and property star rating system, which incentivize property improvements and enhance market transparency.
V. TME Legal Takeaway
Dubai’s decision to allow freehold ownership conversions in Sheikh Zayed Road and Al Jaddaf reflects a strategic approach to stimulating the real estate market. By empowering property owners with full ownership rights and opening these key locations to international investors, the initiative not only enhances property values but also strengthens the emirate’s position as a global investment hub.
This opportunity presents a compelling case for landowners and investors seeking to maximize returns and participate in Dubai’s long-term growth.
