Tokenisation of Property Ownership in Dubai – New‑Age Thinking for Property Investment

4 min 39 sec January 18, 2026 (Edited)

Dubai continues to embrace innovation, including tokenisation – a process that turns ownership interests in assets into digital tokens stored on a blockchain. For real estate, tokenisation could make property investment more accessible, easier to buy and sell, and faster to complete transactions, while maintaining the legal standards expected in one of the world’s most advanced property markets. However, this opportunity comes with important regulatory, legal structure, and enforcement challenges that investors and project sponsors must carefully consider.

Essentially, tokenisation separates the financial benefits of owning property from the traditional paperwork and legal processes. Instead of transferring complete legal ownership, a project sponsor can create digital tokens that give holders rights to income, sale proceeds, and decision-making related to a specific property or group of properties. These tokens can represent small portions of ownership, allowing smaller investments and potentially more people to participate. In Dubai, this fits with ongoing digital improvements in land administration and the Emirate’s focus on virtual assets. However, it doesn’t eliminate the need for proper legal structures. Most practical approaches use a special purpose company that officially owns the property (recorded with the Dubai Land Department), while investors hold tokens representing shares or profit rights in that company. The token serves as proof of a contractual or ownership claim, while the official property title stays registered in the land registry.

Dubai has regulations for this area. In the main Emirate of Dubai, virtual asset activities are overseen by the Virtual Assets Regulatory Authority (VARA), created by Dubai Law No. 4 of 2022. VARA’s 2023 rules cover activities including issuing, offering, and trading virtual assets. Under the VARA framework, sponsors of tokenised property offerings must:

• Obtain regulatory approval for the token issuance, including preparation of an offering document that covers property due diligence, valuation methodology, tenant risk, lifecycle capital expenditure, and exit strategies.
• Arrange custody, exchange listing, and marketing through entities licensed by the relevant regulator.
• Control transfers to ensure compliance with sanctions, anti-money laundering requirements, and investor qualification rules.

When a token has investment features, additional securities or investment fund rules may apply at the federal level under the Securities and Commodities Authority’s crypto asset regulations. Within the Dubai International Financial Centre, the Dubai Financial Services Authority (DFSA) regulates investment tokens and crypto tokens under its specific rulebooks. The DFSA recently released a new crypto token regulatory framework effective from 12 January 2026. This means that how a real estate token is classified (as a utility, payment, or security-like token) determines the licensing, disclosure, custody, and marketing requirements. Sponsors must also consider international rules if tokens are offered to non-UAE investors.

The potential benefits are attractive. Breaking properties into smaller pieces can give more investors access to income producing assets that were previously only available to institutions or very wealthy investors. Trading on regulated platforms may improve the ability to buy and sell tokens, discover fair prices, and provide exit options, subject to market rules and transfer restrictions. Smart contracts can automatically handle distributions, payments, and corporate actions with better transparency. Settlement and record keeping can happen almost instantly, reducing operational complexity and counterparty risk. For developers, tokenisation offers an alternative way to raise capital, while for property owners it can unlock value without selling the entire underlying asset.

However, there are practical challenges to balance against these advantages. First, investors need clear understanding of what a token legally represents, including claim priority, voting rights, information rights, and legal remedies. The token should clearly connect to the company’s governing documents and the land registry record to avoid conflicts. Second, custody, key management, and wallet recovery must meet regulatory standards and institutional risk requirements. Third, secondary transfers can trigger financial crime checks, ownership limits, foreign ownership controls, and (where relevant) off‑plan marketing and escrow rules. Fourth, valuation, audit, and ongoing disclosure practices should match those used in conventional private real estate vehicles so investors can assess performance and risk on a comparable basis. Finally, tax and zakat calculation and contribution should reflect the actual flow of income and the location of assets and investors, recognising that tokenisation doesn’t change underlying tax treatment unless the structure itself does.

Implementation in Dubai therefore follows a predictable pattern. A sponsor creates a special purpose company (SPV) to hold legal title to the property and arranges any financing. The token economics are designed to reflect cash flows after debt payments, fees, and reserves, with clear distribution mechanics. The token issuance is conducted under appropriate regulatory approval, with an offering document that covers property due diligence, valuation methodology, tenant risk, lifecycle capital expenditure, and exit strategies. Custody, exchange listing, and market making are arranged through entities licensed by the relevant regulator. Transfers are controlled to ensure compliance with sanctions, anti-money laundering, and investor qualification rules. Corporate governance ensures that token holders decisions which materially affect the asset are properly structured and recorded.

Looking ahead, tokenisation is likely to complement, rather than replace, existing real estate investment formats such as private funds or REITs. Its adoption will be fastest where the underlying cash flows are stable, the asset is professionally managed, and the legal rights are clearly defined. Dubai’s regulatory clarity, combined with its digital land administration, makes it a natural testing ground for responsibly scaled tokenised offerings. If executed with proper discipline, tokenisation can broaden participation in Dubai’s property market while maintaining the investor protections and market integrity on which the Emirate’s global reputation depends.

Coming soon: A detailed examination of anti-money laundering safeguards applicable to tokenised property transactions and exit strategies for secondary market participants in Dubai’s evolving digital asset landscape.