What this guide covers
The cap on Dubai rent increases did not change in 2025 — the benchmark it is measured against did. Since 1 January 2025 the Dubai Land Department calculates permissible increases against the Smart Rental Index, an AI-driven benchmark that grades buildings individually. The practical effect is that a rent lawful under the old index can be unlawful under the new one, and vice versa.
What changed on 1 January 2025
Dubai's rent-increase framework has two moving parts: a statutory cap that limits how far rent can rise, and a market benchmark that fixes the reference figure against which the cap is applied. Decree No. (43) of 2013 supplies the cap. The benchmark used to be the Land Department's general rental index, which reported broad averages by area and unit type. From 1 January 2025 that benchmark was replaced by the Smart Rental Index.
The Smart Rental Index differs in one decisive respect: it classifies each building individually, drawing on a wide set of attributes — location, age and condition of the building, quality of finish, amenities, and service levels — and updates from live transaction and listing data rather than sitting static for a year. Two buildings on the same street, previously treated as interchangeable for rent purposes, can now carry materially different benchmark figures. The reference value in Article 3 of Decree 43/2013 — "the average rental value of similar units" — is now derived from this classification rather than a coarse area average.
The increase cap is unchanged — Decree 43 of 2013
Landlords sometimes assume a "new index" means a new cap. It does not. The percentage bands in Decree 43/2013 remain exactly as before, tied to how far the current rent sits below the benchmark for comparable units:
| Current rent versus the Smart Rental Index | Maximum increase on renewal |
|---|---|
| Up to 10% below the index | No increase |
| 11% to 20% below | 5% |
| 21% to 30% below | 10% |
| 31% to 40% below | 15% |
| More than 40% below | 20% |
Because the cap operates off the benchmark, the reclassification is what changes outcomes. A unit that was 8% below the old area average — and so frozen — may sit 15% below its building's Smart Index figure once the building is graded on quality, opening a lawful 5% increase. The reverse is equally true: a premium building may benchmark higher, compressing the gap and removing an increase a landlord expected.
Building classification and why identical units now diverge
The classification layer is the substantive novelty for practitioners. Under the previous index, a valuation dispute usually turned on selecting the right comparable area and unit type. Under the Smart Rental Index, the building's grade is doing much of the work, so the argument shifts to whether the classification fairly reflects the specific asset.
For landlords, this rewards genuine investment in the building — better amenities and maintenance feed a higher benchmark and, in time, higher lawful rents. For tenants, it provides a more defensible answer to an inflated demand: the index figure is asset-specific and harder for a landlord to dismiss as a crude average. For both, it makes the Dubai REST calculator output the practical starting point of any negotiation, not an afterthought.
Serving a lawful increase — the 90-day rule
A permissible increase is only enforceable if it is properly noticed. Under Article 14 of Law No. (26) of 2007, as amended by Law No. (33) of 2008, a party wishing to vary any term of the tenancy on renewal — including rent — must notify the other at least 90 days before the contract expires, unless the parties agreed a different period. Miss that window and the tenancy renews on its existing terms; the landlord cannot impose the increase mid-cycle.
Two points are frequently mishandled. First, the notice must actually reach the tenant through a recognised channel and should record the proposed figure, so there is no later dispute about what was served or when. Second, an increase within the cap is not automatic — it is a ceiling, not an entitlement — and a tenant who receives a compliant notice may still negotiate below it.
Where a rent dispute goes
Rent disputes in Dubai are heard by the Rental Dispute Centre, the specialist judicial body established under Decree No. (26) of 2013, which has jurisdiction over landlord and tenant matters in the Emirate, including free zones. A registered tenancy (Ejari) is a precondition — the courts and government bodies will not hear a claim on an unregistered lease. The Centre's process is deliberately quick: mediation first, then a tribunal working to tight statutory deadlines, with lower-value claims decided finally.
For an increase dispute, the index figure is the centre of gravity. A landlord relying on a demand above the permitted band, or a tenant resisting a lawful one, will each be measured against the same Smart Rental Index output. Aligning the demand to the calculator before serving notice is the single most effective way to avoid a claim.
Practical checklist
- Run the current rent through the RERA calculator on the Dubai REST app or the DLD website before drafting any renewal notice
- Confirm the building's Smart Index classification looks right for the asset; a misgraded building is now the most common source of an incorrect figure
- Serve the increase notice at least 90 days before expiry, recording the proposed rent and the date and method of service
- Treat the capped percentage as a ceiling, not a default — a demand at the maximum invites a challenge if the gap to the index is marginal
- Ensure the tenancy is registered on Ejari; without it, neither party can bring the dispute before the Rental Dispute Centre
- Keep the index printout on file — it is the primary evidence if the matter reaches the Centre
What we'd typically advise
The reclassification, not the cap, is where value is now won or lost. Before a renewal cycle we check the building's Smart Index grade against the actual asset and, where it understates or overstates the building, prepare the evidence to correct it — because a single grade band can move the permitted increase between zero and the full ceiling. For landlords, we sequence the 90-day notice around the calculator output so the demand is defensible on its face; for tenants, we test an increase against the asset-specific figure rather than accepting an area average. In either case, the objective is to resolve the number before it becomes a filing at the Rental Dispute Centre.
Frequently asked questions
Did the Dubai rent cap change in 2025?
No. The percentage caps in Decree No. 43 of 2013 (0 to 20 percent, depending on how far the rent sits below the market benchmark) are unchanged. What changed on 1 January 2025 is the benchmark itself: rent is now measured against the DLD's AI-driven Smart Rental Index rather than the older, coarser rental index.
How much can a landlord increase rent in Dubai now?
Between 0 and 20 percent on renewal, keyed to how far the current rent falls below the Smart Rental Index figure for comparable units: no increase up to 10 percent below; 5 percent for 11 to 20 percent below; 10 percent for 21 to 30 percent below; 15 percent for 31 to 40 percent below; and 20 percent where the rent is more than 40 percent below the index.
Where do I calculate a lawful rent increase?
Use the RERA rental-increase calculator through the Dubai Land Department website or the Dubai REST app. Enter the current rent, area, property type, number of bedrooms and contract expiry, and it returns whether an increase is permitted and the maximum allowed.
How much notice must a landlord give for a rent increase?
At least 90 days before the tenancy expires, unless the parties agreed otherwise, under Article 14 of Law No. 26 of 2007 as amended by Law No. 33 of 2008. Without that notice, the tenancy renews on the existing terms.
Where do I challenge an unlawful rent increase?
At the Rental Dispute Centre, the judicial body established by Decree No. 26 of 2013, which has jurisdiction over landlord and tenant disputes in Dubai, including free zones. A registered (Ejari) tenancy is a precondition to being heard.
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Published 15 July 2026 by Shuhail Ahamed. General information only — not legal advice. Contact us for matter-specific advice.