Breaking News: DLD Expands Freehold Property Conversion Eligibility: 2025 Guide for Conversion

In a significant development for Dubai's real estate market, the Dubai Land Department (DLD) has announced the expansion of freehold property conversion eligibility to include two prime locations: Sheikh Zayed Road and Al Jaddaf. This 2025 policy change opens new opportunities for property investors and owners in these previously leasehold-restricted areas

Property owners in Sheikh Zayed Road and Al Jaddaf areas can now apply to convert their leasehold properties to freehold status, granting them absolute ownership rights rather than time-limited leasehold interests. This change affects commercial and residential properties alike, potentially increasing their market value and investment appeal.

Can a leasehold property be converted to freehold in Dubai?

Yes, leasehold properties in Dubai can be converted to freehold, subject to certain conditions:

• The property must be located in a designated freehold-eligible area
• The master developer must permit and facilitate conversion
• All applicable conversion fees must be paid in full
• Complete documentation must be submitted to the Dubai Land Department

The 2025 regulatory framework has expanded eligibility to include Sheikh Zayed Road and Al Jaddaf areas, which were previously restricted. However, not all areas in Dubai are eligible for conversion—some locations remain exclusively leasehold as per government regulations.

Property owners should verify their eligibility by checking the Dubai Land Department's updated freehold zones map or by consulting with their master developer directly.

How to Convert from Leasehold to Freehold in Dubai: 2025 Step by Step

1. Eligibility Verification:
   • Confirm your property is within the newly designated conversion zones in Sheikh Zayed Road or Al Jaddaf
   • Verify that your master developer has aligned with the new DLD policy
   • Review your current lease agreement for any specific conversion clauses
2. Developer Application:
   • Submit a formal conversion request to your property developer
   • Provide comprehensive ownership documentation and identity verification
   • Pay the initial application processing fee
3. Property Valuation:
   • Independent valuation experts will assess current market value
   • Conversion fee calculation (typically ranges from 10-30% of property value)
   • New lower conversion fees may apply for early applicants (within first 6 months of program)
4. Required Documentation:
   • Original title deed
   • Passport copy with valid residency visa
   • Emirates ID (for residents)
   • NOC from mortgage provider (if applicable)
   • Evidence of fully paid service charges
   • 2025 Property Declaration Form (new requirement)
5. Dubai Land Department Submission:
   • Your developer forwards the complete application package to DLD
   • Payment of all required fees:
     • Conversion fee
     • 4% registration fee
     • Administrative charges
     • New digital processing fee (introduced in 2025)
   • Biometric verification at DLD offices
6. New Freehold Title Issuance:
   • Receive updated title deed reflecting freehold status
   • Registration in the Dubai Land Department's centralized property registry
   • Digital title confirmation (new for 2025)

According to the Dubai Land Department's 2025 guidelines, the streamlined process typically takes 3-6 weeks once the developer approves the conversion—significantly faster than previous years.

Check our blog if you want to understand further the difference of freehold vs leasehold properties in Dubai

Dubai Conversion Costs (2025 Update)

The cost structure remains percentage-based on property value with some modifications:

For a property valued at AED 1 million in the newly eligible areas, total conversion costs typically range from AED 134,500 - 324,500 (approximately £28,000 - £68,000).

When Dubai allows property owners on Sheikh Zayed Road and Al Jaddaf to convert to freehold?

The Dubai Land Department officially announced the eligibility of Sheikh Zayed Road and Al Jaddaf properties for freehold conversion in January 2025, with the program becoming operational in February 2025.

Key timeline details:

• Application Acceptance: Applications for conversion in these newly eligible areas are being accepted as of February 15, 2025
• Early Adopter Period: A special reduced fee structure is available for applications submitted before August 15, 2025
• Processing Timeline: The DLD has committed to a 3-6 week processing period for completed applications
• Phased Implementation: Large buildings and complexes in these areas are being processed in phases based on developer readiness

The decision to expand freehold eligibility to these premium locations was part of Dubai's Strategic Real Estate Plan 2025-2030, which aims to enhance property market accessibility and investor confidence.

Property owners in these areas should note that while eligibility is now confirmed, the actual conversion process is managed through their respective master developers, who may implement their own scheduling systems.

Investment Implications for Sheikh Zayed Road & Al Jaddaf

Market Impact

Real estate analysts project a 15-20% value increase for properties in these newly eligible areas following successful freehold conversion. This premium reflects:

• Enhanced marketability to international investors
• Removal of ownership time limitations
• Greater flexibility for property development
• Improved inheritance and succession planning

Strategic Considerations

For investors considering properties in Sheikh Zayed Road and Al Jaddaf areas:

1. Timing Advantage: Early conversion applicants may benefit from introductory fee structures
2. Premium Location Value: These areas represent prime Dubai real estate with strong appreciation potential
3. Financing Options: Several UAE banks have announced specialized conversion financing packages
4. Future-Proofing: Converting now protects against potential future fee increases
5. Commercial Opportunity: Business properties in these areas may see enhanced leasing potential

Practical Guidance for Property Owners

When to Convert in Sheikh Zayed Road & Al Jaddaf

Converting makes most financial sense when:

• You plan to hold the property for 5+ years
• Your property has strong appreciation potential
• You wish to enhance inheritance options
• You intend to redevelop or substantially modify the property
• You seek to attract international buyers or tenants

When Conversion May Not Be Advisable

Despite the advantages, conversion might not be optimal if:

1. Short-term Investment: Planning to sell within 2 years may not recoup conversion costs
2. Financing Constraints: Unable to finance the substantial conversion fees
3. Developer Uncertainty: Your specific building's developer hasn't fully aligned with the new policy
4. Pending Major Infrastructure: Areas expecting significant infrastructure changes may face valuation fluctuations

International Comparison: How Dubai's Process Compares to Other Markets

Cost Comparison

1. Dubai: Highest percentage of property value (10-25%) but fewest separate fees
2. UK: Value-based with emphasis on remaining lease terms; typically 10-25% of property value
3. NZ: Service-based with emphasis on technical costs; fixed costs regardless of property value

Key Differences

Conclusion

The Dubai Land Department's 2025 decision to open freehold conversion for properties in Sheikh Zayed Road and Al Jaddaf represents a significant opportunity for property owners in these prestigious areas. While the conversion process in Dubai remains more streamlined than counterparts in the UK and New Zealand, it carries unique considerations regarding cost structure and developer involvement.