Dubai’s rental market is known for its dynamic nature, but if you’re a tenant or landlord, one thing you’ll want to understand clearly is rental increase caps. No one likes sudden surprises, especially when it comes to rent, so it’s important to know the rules, how they’re calculated and what your rights are.
What Are Rental Increase Caps?
Rental increase caps are government-set limits on how much a landlord can legally increase the rent when renewing a tenancy contract in Dubai. These caps are enforced by the Real Estate Regulatory Agency (RERA) to keep rent adjustments fair and in line with the market.
They’re not random, either. Increases are based on the RERA Rental Index, a system that compares your current rent to the average rent in your area for similar properties.
How Do Rental Increase Caps Work?
Dubai’s rental law doesn’t allow landlords to hike the rent however they want. The cap is determined by the difference between your current rent and the average market rate, as shown in the RERA Index.
Here’s how it works:
| Difference Between Current Rent and Market Average | Permissible Rent Increase |
| 0% to 10% below market rate | No increase allowed |
| 11% to 20% below market rate | Up to 5% increase |
| 21% to 30% below market rate | Up to 10% increase |
| 31% to 40% below market rate | Up to 15% increase |
| More than 40% below market rate | Up to 20% increase |
Example:
Let’s say the average market rent for your apartment type in your area is AED 100,000. If you’re currently paying AED 80,000 (20% below market rate), the landlord can increase the rent by up to 5%, i.e., AED 4,000 upon renewal.
Using the RERA Rent Calculator
The easiest way to check whether your landlord is allowed to raise your rent is by using the RERA Rent Calculator, available on the Dubai Land Department website or the Dubai REST App.
Just enter the following:
- Property type (apartment or villa)
- Area (e.g., Jumeirah Village Circle, Downtown Dubai)
- Number of bedrooms
- Current annual rent
The tool will tell you instantly whether a rent increase is permitted and by how much.
Key Rules Every Tenant and Landlord Should Know
- 90-Day Notice: If a landlord plans to increase rent, they must provide at least 90 days’ written notice before the end of the tenancy contract. If they fail to do so, no increase can be applied.
- Registered Tenancy Contracts (Ejari): The rental increase must comply with Ejari regulations. Only registered contracts are legally enforceable.
- No Mid-Contract Increases: Rent can only be changed at the time of renewal, not during the active lease period.
- Disputes Go to the RDC: If there’s a disagreement over rent increases, either party can file a case with the Rental Dispute Settlement Centre (RDC).
Why Do Rental Increase Caps Matter?
For tenants, they provide peace of mind and help with financial planning. No more unexpected 15% rent hikes overnight.
For landlords, they help maintain fair relationships with tenants while ensuring properties stay competitive in the market.
And for Dubai’s real estate ecosystem as a whole, it creates a transparent, stable and regulated rental market that benefits everyone.
Understanding rental increase caps is key whether you’re renewing your lease or managing an investment property in Dubai. Thanks to RERA’s clear guidelines and tools like the RERA rent calculator, both tenants and landlords can navigate rent renewals with confidence and fairness.
Confused about rental rules in Dubai? Whether you’re a tenant or landlord, Luxfolio Real Estate is here to walk you through it all.