Dubai will establish an independent rental index for co-living units as part of a new law regulating shared housing, a move aimed at increasing pricing transparency and reducing informal agreements in the rental market.

The Dubai Land Department (DLD) will be responsible for developing and periodically updating this index. Rates will be determined based on the unit's technical specifications and the quality of services provided; however, the implementation date and the specific calculation method—whether based on the unit, room, bed, or space allocated to each resident—have not yet been announced.

This index is distinct from the existing Dubai Rental Index used to determine allowable rent increases during contract renewals and will only cover licensed co-living properties. Real estate experts anticipate that this mechanism will standardize prices and enhance the predictability of rental income for owners.

The DLD is also tasked with publishing standard templates for rental and management contracts for these units. Contracts must record information about the owner, the property, the number of residents, and the space allocated for shared living. An electronic system will be established to maintain data on approved units, contracts, and residents, which will be linked to Dubai Municipality’s licensing platform.

Under Law No. 4 of 2026, which takes effect at the end of August, using any property as co-living housing requires prior licensing. Permits are typically valid for one year, though owners may apply for a two-year license. Issuance is contingent upon compliance with building, health, fire safety, electrical, security, and occupancy capacity requirements.

Existing units will have one year to bring their operations into compliance with the new regulations. Fines for violations range from AED 500 to AED 500,000, and may increase to a maximum of AED 1 million if the violation is repeated within a year.