Everything You Need to Know About the Rental Index Calculator
Before diving in, let’s address a common question: What is indexed rent? Indexed rent is an annual increase in rent specified in the lease agreement. This increase is determined during contract negotiations between the tenant and landlord, so there’s no need for further discussion when the increase is implemented. Let we discuss facts about Rental Index Calculator in details.
The Real Estate Regulatory Authority (RERA), a unit of the Dubai Land Department, is responsible for regulating and overseeing the real estate sector’s standards and operations. RERA provides a rental increase calculator to help landlords and tenants determine if a proposed rental increase is permissible.
With the latest RERA Index now available, many Dubai residents are curious whether they should anticipate rent increases or decreases from their landlords this year. If you’re unsure how the RERA rental increase calculator works, here’s a straightforward explanation.
What is the RERA Rental Increase Calculator?
In December 2013, Sheikh Mohammed bin Rashid Al Maktoum issued Decree No. 43 of 2013 to cap rental increases and prevent illegal hikes. The RERA rental increase calculator works in accordance with the RERA rental index, which is updated annually. This index sets rental recommendations valid for all rental properties in Dubai for the year.
The RERA rental increase calculator allows landlords and tenants to input property details to determine if a rental increase is applicable. Landlords should use the calculator to ensure compliance with the law, while tenants should check it if they receive a rent increase notice.
How Does the RERA Rental Calculator Work?
The RERA rental calculator requires the following details:
- Property type (residential, commercial, industrial, or staff accommodation)
- Tenancy contract expiry date
- Main area of the property (e.g., Deira, Bur Dubai, or freehold property)
- Property type (apartment or villa)
- Area (community or subcommunity)
- Number of bedrooms
- Current annual rental amount
However, it does not account for:
- Age of the building/unit
- Building condition
- Available facilities
- Floor level
The calculator compares your property’s rent to average prices of similar properties in your area.
Using the RERA Calculator in Dubai
To use the RERA rental increase calculator in Dubai, follow these steps:
- Access the Calculator: Visit the Dubai Land Department (DLD) website or download the Dubai REST app to access the RERA rent calculator.
- Choose Your Tab: Options include Title Deed Number, Ejari Contract Number, or other property details. Select the relevant option.
- Enter Required Information: Depending on your selection, provide details like current rent, contract number, or lease contract end date.
- Calculate Rent: Click “Calculate Rent” to get the average annual rent based on current market trends.
This user-friendly tool helps you stay updated on the rental market and make informed decisions about property rentals in Dubai.
How Much Can My Rent Increase?
The RERA rental index is updated annually, and the permissible rent increase depends on how much lower your current rent is compared to the market rate:
- No increase if rent is below 10% of the market value.
- A 5% increase if rent is 11-20% below average.
- A 10% increase if rent is 21-30% below average.
- A 15% increase if rent is 31-40% below average.
- Up to a 20% increase if rent is more than 40% below the market value.
When is a Rent Increase Allowed?
A rent increase is permissible only if the landlord provides a 90-day notice before the lease renewal. Failure to do so means the tenant is not obligated to accept the increase.
Handling Illegal Rent Increases
Despite regulations, some landlords may attempt to increase rent unlawfully. If the RERA calculator indicates that an increase is excessive or not allowed, discuss it with your landlord using the calculator as evidence. If necessary, you can file a dispute with the Rental Dispute Settlement Centre.
RERA Rental Increase Calculator 2024 Update
The new Dubai rent law for 2024, effective March 1, sets clear limits on rent increases based on the current rental value compared to market value. Increases are allowed only once a year at contract renewal, and landlords must provide a 90-day notice before implementing any increase.
Example Calculation
For instance, if you’re renting a two-bedroom apartment in Dubai Media City, and the average annual rent for such an apartment is between AED 90,000 and AED 110,000, a rent that is 40% below the market value (AED 54,000 to AED 66,000) could be increased by up to 20%. Enter your current rent and contract end date into the RERA rental index calculator to find out the potential increase.
FAQs
What is the RERA Index in Dubai? The RERA Index, part of the Real Estate Regulatory Authority (RERA), includes the RERA rental calculator, which helps evaluate if a proposed rental increase is within permissible limits.
How do you use the RERA calculator? Input details such as property type, contract expiry date, and current rent into the RERA rental calculator and click “Calculate” to see the result.
How much rent increase is allowed in Dubai? Typically, rent increases in Dubai are capped at 5% annually, but this can vary based on property type and location.
How much can a landlord increase rent in RERA? Landlords can increase rent by up to 20% if the current rent is 40% below the average market rate, as determined by the RERA rental index.
What is the maximum rent increase as per RERA? The maximum allowed rent increase is 20%, based on the comparison between current rent and market rates.
Is it legal to increase rent every year in Dubai? Rent increases are allowed only once annually, typically during lease renewal, to ensure fairness and legal compliance.
How to calculate rent with index? Divide the new index point by the old index point and multiply this ratio by the original rent to calculate rent with indexation.
Use the RERA rental increase calculator to stay informed and manage your rental expenses effectively.
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