Before 2002, foreigners couldn't own property in Dubai. Full stop. The emirate's real estate market was closed to non-GCC nationals. Then came Decree No. 7 of 2006 (building on an earlier 2002 ruling by Sheikh Mohammed), which designated specific areas where expatriates and foreign nationals could purchase freehold property. That single legislative change turned Dubai into one of the world's most active international property markets.
Today, the distinction between freehold and leasehold areas remains one of the most misunderstood aspects of buying in Dubai.
Freehold: Full Ownership, No Expiry
Freehold ownership means exactly what it sounds like. You own the property and the land it sits on. There's no lease term, no ground rent, no reversion. The title deed is registered in your name at the Dubai Land Department (DLD), and it remains there indefinitely. You can sell, lease, mortgage, or pass it to heirs.
Dubai's designated freehold areas include most of the city's high-profile developments:
- Dubai Marina: average AED 1,400-1,800/sqft
- Downtown Dubai: average AED 2,000-2,800/sqft
- Palm Jumeirah: average AED 2,200-3,500/sqft
- Jumeirah Village Circle (JVC): average AED 700-1,000/sqft
- Business Bay: average AED 1,200-1,600/sqft
- Dubai Hills Estate: average AED 1,400-2,000/sqft
- Jumeirah Beach Residence (JBR): average AED 1,500-2,000/sqft
- Arabian Ranches: average AED 1,100-1,500/sqft (villas)
There are over 50 designated freehold areas in total. Most master-planned communities built in the last two decades, including Emaar's developments, Nakheel's communities, and DAMAC projects, fall into freehold zones. Any nationality can purchase here. No residency visa is required to buy, though ownership above AED 750,000 qualifies you for a renewable 2-year investor visa, and above AED 2M for a 10-year Golden Visa.
Leasehold: Long-Term Rights, Not Ownership
Leasehold areas offer a different structure. You don't own the land. Instead, you acquire the right to use a property for a fixed term, typically 10, 25, 30, or 99 years. At the end of the lease, the property reverts to the landowner unless the lease is renewed.
Leasehold areas tend to be older, more established neighbourhoods:
- Deira: Dubai's original commercial district
- Bur Dubai: the historic city centre
- Karama: dense residential area, lower rents
- Satwa: inner-city neighbourhood near Sheikh Zayed Road
Leasehold properties are typically cheaper. Prices per square foot in Deira or Karama can be 50-70% lower than equivalent-quality units in Marina or Downtown. For occupiers who want lower cost of living and don't need investment appreciation, leasehold makes financial sense.
However, financing leasehold property is more complicated. Most UAE banks prefer to lend against freehold titles. Lease terms under 30 years remaining can make mortgage approval difficult or impossible. Resale liquidity is also lower. Freehold properties attract a wider pool of international buyers.
Usufruct: The Middle Ground
There's a third category that sometimes gets confused with leasehold: usufruct. A usufruct agreement grants the right to use and profit from a property (including renting it out) for a specified period, typically 99 years. It's registered at the DLD, but you don't own the underlying land.
Some developments in semi-freehold areas use usufruct structures. It's functionally similar to freehold for the duration of the agreement, but check the fine print. A 99-year usufruct is practically equivalent to freehold. A 30-year usufruct with no guaranteed renewal is closer to leasehold.
Common Misconceptions
"Freehold means I own the land forever." Technically, yes. But Dubai is a young market with a 22-year history of foreign freehold ownership. There's no 200-year precedent. The legal framework is solid. RERA, DLD, and the courts enforce ownership rights, but it's worth understanding that this is a government-granted right, not an ancient common-law tradition.
"Leasehold areas are bad investments." Not necessarily. Deira is undergoing significant redevelopment. The Deira Islands project (now Dubai Islands) is bringing new supply and infrastructure to the area. For buyers with a 10-year horizon and higher risk tolerance, leasehold properties in regeneration zones could outperform mature freehold communities.
"All new developments are freehold." Most are, but not all. Some new builds in areas like Jumeirah offer musataha (development leasehold) rather than outright freehold. Always verify the title type with DLD before signing an SPA (Sale and Purchase Agreement).
Which Should You Choose?
For most foreign buyers, freehold is the clear choice. Full ownership rights, easier financing, better resale liquidity, and eligibility for residency visas. The price premium over leasehold is justified by the legal certainty and investment flexibility.
Leasehold works for specific scenarios: end-users who want affordable housing in central locations, businesses seeking commercial space in established districts, or speculative buyers targeting regeneration areas. But go in with open eyes. Understand the lease term, renewal conditions, and exit options before you commit.
The DLD title deed will state the ownership type clearly. If you're buying through an agent, ask to see the title deed before making an offer. If they can't produce it, move on.