The Dubai Land Department is considering allowing the ownership of tokenized properties and regulating them using digital currencies, within the emirate’s current legislative framework. The plan is expected to be officially implemented before the end of 2025. Dubai Land Department is working to build an integrated system to protect the privacy of owners, in collaboration with the Virtual Assets Regulatory Authority (VARA), the Central Bank of the UAE, and the Dubai Future Foundation. This system aims to enhance governance and protect investors in this new type of real estate investment.
Last March, Dubai launched the first phase of the real estate “tokenization” initiative, announcing six projects so far that sold out within minutes of their announcement. More than 1,400 investors from 50 nationalities participated in the initiative, 70% of whom were first-time investors in this vital sector. The number of investors on the waiting list, those interested in investing through the real estate tokenization initiative, has reached more than 20,000, confirming the scale of demand and the significant momentum witnessed in this sector.
An Integrated System
Dr. Mahmoud Al-Barai, Director of the Real Estate Policies and Innovation Department at the Department, said in a media interview: “The first phase of the real estate coding initiative witnessed widespread interest from investors of various nationalities, from Asia, Europe, and Arab countries, in addition to Emirati investors.”
Al-Barai confirmed that Dubai Land Department is open to studying the possibility of legalizing the ownership of tokenized properties through digital currencies within the current legislative framework. We expect these transactions to be officially permitted by the end of this year. Work is underway to build an integrated system to protect the privacy of owners, in cooperation with the Virtual Assets Regulatory Authority (VARA), the Central Bank, and the Dubai Future Foundation, to enhance governance and protect investors.
Al-Barai explained that the minimum investment in real estate tokenization projects is only AED 2,000, while the maximum investment has been set at 20% of the total value of a single property to protect investors and ensure fair distribution of ownership. He noted that the fees imposed for registering transactions have been reduced from 4% to 2% as a key incentive to support the project and encourage participation.
Al-Barai pointed out the most prominent advantages of the real estate tokenization market, which enjoys high liquidity, allowing investors to sell their stake at any time. However, sales are not permitted during the trial period. He noted that starting next September, investors who participated in the first phase will be allowed to sell their stakes if they wish. He continued, “The first phase of the project, as agreed with the partners, will continue until September, after which the purchase of tokenized real estate will be opened to non-resident foreigners worldwide.”
Flexible Legislative Environment
Al-Barai explained that current legislation allows the sale of tokenized real estate using digital currencies, provided that these currencies are converted into stablecoins or “stablecoins” and then into Emirati dirhams through a clearing process. He explained that existing companies are currently undertaking this process, and by the end of the year, investors will be able to use the stable dirham to purchase real estate directly after its launch by the Central Bank. He confirmed that the department is open to studying the possibility of purchasing tokenized properties using digital currencies, within the current legislative framework, and we expect these transactions to be officially permitted before the end of this year.
5 New Platforms
Al-Barai revealed that the “Pribco Mint” platform is one of the first platforms officially approved to operate within the real estate tokenization project, adding that five other platforms are currently in the process of joining, and that major developers are in the process of establishing their own brokerage firms to participate in this new system. He emphasized that it is the project of the century because it will completely change the way real estate is bought and sold, noting that anyone in the world can now be part of Dubai’s real estate story. He said, “The tokenization company is responsible for managing tokenized properties, in terms of collecting rent and paying bills, like DEWA, allowing investors to earn monthly rental returns of up to 7%.”
Al-Barai explained that, starting in September, we will begin including under-construction properties within the coding project. Property ownership can be done with codes starting from AED 2,000, and each investor is not permitted to own more than 20% of the coding unit, to prevent any party from controlling it. He revealed that Dubai Land Department has received numerous requests from Gulf and Arab countries to share Dubai’s real estate coding experience with them, reflecting the great interest in this unique model.