Tourism Fees and Taxes in Dubai Holiday Home and Airbnb Business

Thinking about starting your own Airbnb business in Dubai? You're not alone. With the city attracting millions of tourists every year, holiday homes are becoming one of the most popular and profitable business ideas in the UAE. But here’s something that often gets missed in the excitement - understanding the fees and taxes involved.

If you're planning to rent out your property on Airbnb or any short-term rental platform, you need to know what charges apply, how much to collect, and how to stay compliant.

This might sound complicated - but trust us, it’s simple once you know what to look for. And in this article, we’re breaking it down for you in the easiest way possible.

Why You Should Care About These Fees

Every day, we get questions like:

“Are there extra taxes in Dubai for Airbnb?”
“How do I include tourism charges in my pricing?”

The short answer is yes - Dubai has a few official fees and taxes every holiday home operator must charge and report. These aren’t just for hotels - they apply to private holiday homes and Airbnb rentals too.

The good news? These charges are clear, fixed, and easy to manage once you know how they work. Let’s walk through each of them.

Destination Fee – AED 15 Per Night

This one’s simple. The Dubai government charges a fixed AED 15 per night for every guest stay. It’s known as the Destination Fee, and it goes directly toward promoting tourism in the city.

This fee applies whether your guest is staying in a hotel, a serviced apartment, or your Airbnb unit. It's mandatory, and as a host, you’ll need to include it in the price or show it as a separate charge.

Tourism Fee – 6% of Rental Value

Next is the Tourism Fee, charged at 6% of the total rental value. This supports Dubai’s tourism infrastructure - think public transport, events, and attractions that bring millions of visitors to the city.

If you're charging AED 1,000 for a 2-night stay, the tourism fee would be AED 60. It might seem small, but when you start getting multiple bookings, this becomes an essential part of your pricing plan.

Municipality Fee – 4% of Rental Value

This one supports local services that keep Dubai clean, safe, and functioning at its best. The Municipality Fee is 4% of the rental value and applies to all short-term rentals, including Airbnb and holiday homes.

You don’t have to do anything special to calculate this. Just make sure you factor it into your final price so you're not covering it from your profits.

Service Charges – Around 10%

This is where you have some flexibility. Service charges cover the cost of what you provide to guests - like cleaning, maintenance, guest support, and even laundry services.

You can set this at a flat rate or as a percentage of the rent. Many operators go with around 10%, but it depends on how much you’re offering. If your unit includes concierge services, welcome kits, or daily housekeeping, you might go higher.

The key is to be clear with guests and make sure your price covers your actual service costs.

VAT – 5% on Total Charges

Now, let’s talk about VAT (Value Added Tax). In the UAE, VAT is charged at 5% on both rental and service charges. This is a legal requirement, and if your business makes over AED 375,000 per year, you must register for VAT and file returns.

This applies even if you're renting out just one property - as long as the income hits the threshold.

If you’re just starting and expect to grow, it’s a smart idea to plan for VAT now. That way, you won’t have to scramble later when your bookings increase.

How to Use This Information to Your Advantage

All of these fees and taxes can seem like a lot at first - but they’re actually what help you build a professional and trusted business.

a. When you understand these charges, you price more accurately
b. You avoid fines or issues with DTCM or tax authorities
c. You maintain a healthy profit margin because you’ve done the math
d. You give your guests transparency, which builds trust and leads to better reviews

This isn’t just about compliance - it’s about setting your business up for long-term success.

Final Thoughts – Know Your Numbers Before You List

Dubai’s short-term rental market is full of potential. Whether you're hosting on Airbnb or managing your own holiday home brand, understanding the taxes and tourism fees is step one.

You don’t need to be a tax expert - you just need to know what’s required and how to structure your pricing smartly.

‍

At COFTT, we help hosts and investors like you launch smoothly, stay compliant, and build profitable property businesses from day one. Got a question about Airbnb taxes or holiday home setup in Dubai? Let’s talk. We’ll walk you through it - clear, simple, and the right way.