A complete guide to usufruct properties in the UAE

The UAE real estate sector features various types of property ownership to facilitate homebuyers and investors, including usufruct property. Understanding the "usufruct meaning" is crucial for those looking to invest in the country, as this ownership type provides unique rights that differ significantly from freehold properties. Our detailed blog covers all aspects of usufruct properties in the UAE, their benefits, and more. 

Whether you’re an expat considering property ownership or an investor exploring diverse ownership options, understanding usufruct rights can help make informed decisions in Dubai's ever-evolving real estate landscape.

Usufruct in the UAE

In simple terms, usufruct meaning refers to a right to use and benefit from a property that belongs to someone else without owning it outright. Originating from civil law, usufruct grants the holder the ability to occupy or rent out the property, make improvements, and derive income from it for a specified period, typically long-term. 

This unique ownership model offers certain freedoms without full ownership, distinguishing it from traditional freehold rights, where the owner has permanent control over the property.

What is Usufruct in Dubai Real Estate?

Usufruct properties in Dubai are structured to grant the holder usage rights for a defined period, usually up to 99 years. During this time, usufruct rights allow the holder to benefit from the property without the need for renewal, making it a favorable option for long-term residents and investors alike. 

Usufruct can be particularly advantageous for expats, as it allows them to have a stake in the Dubai property market without complete ownership.

Benefits of Usufruct Property Ownership

Long-Term Stability

Usufruct rights typically last for decades, offering long-term security similar to freehold ownership. The tenure can often be up to 99 years, allowing property holders to enjoy stability and flexibility throughout the term.

Cost-Efficiency

Usufruct property ownership often incurs lower costs compared to freehold, making it attractive for those who want the benefits of long-term occupancy without full ownership.

Flexible Usage

The holder of a usufruct property has the right to lease, sublease, or utilize the property commercially, offering opportunities to generate income and benefit from property appreciation during the term of usufruct.

If you want to understand the difference between leasehold and freehold properties in Dubai, our guide will help you out.
What Is the Difference Between Freehold and Usufruct Properties?

Freehold Ownership

Freehold property ownership in Dubai allows individuals (including expats) to have full property ownership rights, with no time limitations. Owners have complete control over the property, including the right to sell, transfer, or inherit it. 
In freehold ownership, the property is owned indefinitely, making it an attractive option for those seeking a permanent stake in Dubai’s real estate.

Some of the popular freehold areas in Dubai are Business Bay, Barsha Heights, Bluewaters Island, and Downtown Dubai.

Usufruct Ownership

Usufruct property, in contrast, grants the holder the right to use and benefit from the property for a specified period, often 50 to 99 years. Although usufruct holders can make improvements and generate income from the property, they cannot sell the property outright or transfer full ownership rights. 

This distinction makes usufruct properties ideal for expats seeking long-term residence without full ownership responsibilities.

Difference Between Usufruct and Musataha Rights

In addition to usufruct, Dubai offers another unique form of property right called musataha. While usufruct grants the right to use the property and enjoy its benefits, musataha extends this right to construction. With musataha, the holder can build structures on the land, making it particularly attractive for developers and those involved in construction projects.

Key Differences

• Usufruct: Grants the right to use the property and benefit from it for a defined term but does not permit construction.
• Musataha: Extends beyond usage rights, allowing construction on the property for a specified period, which can be beneficial for large development projects.

Usufruct Properties in the UAE and Their Role in Dubai's Real Estate Market

Usufruct properties in the UAE, especially in Dubai, have played a significant role in diversifying the property ownership options available to both local and international investors. This form of ownership is attractive as it allows investors, especially expats who want to buy a property in Dubai, to secure long-term residential rights without the commitment of full ownership. 

Dubai’s supportive regulatory environment and growing property market have made usufruct properties a flexible option for those looking to capitalize on the city's real estate opportunities. There are multiple upcoming projects in Dubai with state-of-the-art features, these projects offer an attractive opportunity to investors.