An owner renewing an annual tenancy in Dubai does not set the increase. Decree No. 43 of 2013 does, on a fixed scale tied to how far the current rent sits below the average for comparable units. Whatever the market has done, whatever the neighbour got, the scale is the scale.
Plenty of owners renew without checking it. Some ask for more than the decree allows and end up at the rental disputes centre. Others leave money behind because they assume no increase is permitted when one is.
The five tiers
The Land Department's own Tenancy Guide sets out the relationship between the current rent and the average comparable rent in the official index.
If the rent is at, above, or up to 10% below the average, no increase is permitted at all. Not a small one. None. This is the tier owners misread most often.
If it sits 11 to 20% below the average, the permitted increase is 5%.
21 to 30% below permits 10%.
31 to 40% below permits 15%.
And more than 40% below the average permits 20% — the maximum. This is the tier tenants misread. A 20% increase is legal, but only where the rent has fallen more than 40% behind the index, which in practice means a tenancy that has been rolling for years while the market moved.
The Land Department's own worked example
From the same Tenancy Guide, so there is no ambiguity about the method.
A contract states a rent of AED 60,000. The average comparable rent in the official index is AED 80,000. The shortfall is calculated as (80,000 − 60,000) ÷ 80,000 × 100 = 25% below the average.
That falls in the 21–30% band, which permits an increase of 10%. So: 60,000 × 10% = AED 6,000, and the rent after increase is AED 66,000.
Note what the calculation does not do. It does not move the rent to the average. A unit 25% below the index goes up by 10%, not by 25% — and ends at AED 66,000 against an average of AED 80,000, still below it. The decree closes the gap gradually and deliberately.
Where the average comes from
The comparison is against the RERA rental index, not against what the landlord believes the unit is worth and not against a portal listing. The index is published by the Land Department, is divided by region (Deira, Dubai, and the freehold areas) and by use (residential, commercial, industrial), and carries minimum, maximum and average rent values by unit type. Indexes exist for specific projects within the freehold areas.
The Rent Increase Calculator sits on the Dubai Land Department website and in the Dubai REST app. You enter the property details and the current rent, and it returns the permitted increase. The Land Department's guide notes the calculator is updated on a regular basis.
Two things follow. First, the answer can change between one renewal and the next without anything about your apartment changing — the index moved. Second, the calculator is the reference both sides will use in a dispute, so an owner who has not run it before sending a renewal notice is negotiating without the only number that counts.
What we can and cannot tell you about notice
The tiers and the calculation above come from the Land Department's own published guide, so we are confident in them.
The 90-day notice requirement — the rule that a landlord must give at least 90 days' notice before expiry of any change to the terms, including a rent increase — is widely stated, and is attributed to Dubai's tenancy law (Law No. 26 of 2007, as amended by Law No. 33 of 2008). We have not been able to verify the 90-day figure directly against the text of that law or against a Land Department publication, so we are flagging it as unverified rather than presenting it as settled. It is the single most consequential procedural rule in a renewal, and it is worth confirming with the Land Department or the Rental Disputes Centre before you rely on the timing.
We would rather tell you which of these two things we checked than let both wear the same confidence.
What this means if you are weighing an annual tenancy
The decree is a floor under tenants and a ceiling over owners, and the ceiling binds in exactly the market where an owner would most want to move.
When rents are rising, the index lags — it is built from registered contracts, which are backward-looking by nature. An owner whose unit is at or near the average can raise nothing this year even if the market has moved, and then faces a twelve-month wait before the next opportunity.
When rents are falling, the decree does not force a reduction, but a tenant can decline to renew and go and sign somewhere cheaper, which achieves the same thing.
That asymmetry is the real cost of the annual model, and it is separate from the rate itself. A twelve-month contract fixes your price for twelve months in both directions. Short and mid-term letting prices to what the market bears this month — which is worth less than the annual model in a rising market caught early, and worth considerably more in one that is moving.
The registered rents that ultimately feed the index — by area and bedroom count, with the contract counts — are published weekly on our Market Gauge.
Sources, checked 2 August 2026
- The five-tier increase scale and the worked example (AED 60,000 against an AED 80,000 average, 25% below, 10% permitted, AED 66,000 after increase) — Dubai Land Department, Tenancy Guide, dubailand.gov.ae.
- The rental index structure (by region and use, with minimum, maximum and average values) and the Rent Increase Calculator — Dubai Land Department, Tenancy Guide, dubailand.gov.ae.
- Decree No. 43 of 2013 — cited as the instrument setting the scale, per the Land Department's guide.
- Unverified: the 90-day notice requirement, and its attribution to Law No. 26 of 2007 as amended by Law No. 33 of 2008. Confirm with the Land Department or the Rental Disputes Centre.
Solayra Holiday Homes Management runs short and mid-term letting for owners and investors across some of Dubai’s most sought-after areas — including Dubai Marina, JBR, Downtown, DIFC, and Dubai Creek Beach. Every apartment is DTCM registered and priced against extensive market data, and you see the occupancy and every dirham as it earns. See what your apartment could be doing on the Market Gauge, read what we do for owners, investors, investment companies and agents & partners, or write to us at owners@solayra.com.
