For investors, developers, school and clinic operators and anyone offered a “99-year” or “50-year” property in the UAE: what musataha and usufruct rights actually give you, what the new Civil Code changed on 1 June 2026, and how Dubai and Abu Dhabi treat each right differently.

Musataha is a registered real right to build on land you do not own and to own what you build for the term of the contract. Usufruct is a registered real right to use and take the income from someone else’s property, capped at 99 years in both Dubai and Abu Dhabi, without altering it. Both are property rights rather than leases, both must now be registered to exist at all under the Civil Transactions Law that took effect on 1 June 2026, and a holder whose remaining term exceeds ten years can sell or mortgage the right without the landowner’s permission.

This guide works from the official texts: Dubai Law No. 7 of 2006 on Real Property Registration, Abu Dhabi Law No. 19 of 2005 on Real Estate Ownership as amended by Law No. 13 of 2019, the Abu Dhabi Real Estate Centre’s registration regulations, and the federal Civil Transactions Law. If you are looking at outright ownership instead, our guides to freehold versus leasehold ownership in Dubai and to buying freehold in Abu Dhabi’s investment zones cover that route.

What Musataha and Usufruct Actually Are

Both are what UAE law calls rights derived from the ownership right: real rights that sit on the property itself and bind whoever owns the land, not merely contractual promises between two parties. That is the practical difference from a lease. A tenant has a claim against a landlord; a musataha or usufruct holder has a right recorded against the land in the property register.

What is the difference between musataha and usufruct?

Musataha grants the right to erect buildings or plant on another person’s land and to own those structures for the term. Usufruct grants the right to use an existing property and take its fruits, including rent, while keeping the property substantially as it is. In short, musataha is for building; usufruct is for using what already exists.

Musataha Usufruct
Core right Build, plant and own the structures on another’s land Use and take the income from another’s property
Can you alter the property? Yes, that is the point of the right No, the property must be kept as it is
Typical subject Bare land: schools, clinics, warehouses, labour accommodation, mixed-use plots Completed buildings and units
Maximum term for non-nationals Abu Dhabi investment areas: 50 years, renewable for a similar period by agreement Up to 99 years in both Dubai designated areas and Abu Dhabi investment areas
At the end of the term Land and buildings revert to the owner Possession returns to the owner
Registration Mandatory, and a condition of the right existing Mandatory, and a condition of the right existing

Abu Dhabi Law No. 19 of 2005 defines the usufruct right as “a real right that grants its holder the right to use another’s property and exploit the same as long as it is kept as is”, and the musataha right as “a real right that grants its holder the right to set up construction or implantation on others’ land”. The wording matters: an owner who is told they can renovate under a usufruct is being told something the definition does not support.

What Changed on 1 June 2026

The federal rules that sit underneath both emirate laws were rewritten. Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law came into force on 1 June 2026 and replaced Federal Law No. 5 of 1985, the Civil Code that had governed musataha and usufruct for four decades. Two changes matter for anyone holding or negotiating these rights.

Registration is now a condition of validity

Under the new Civil Transactions Law, a musataha or usufruct right must be registered with the competent land authority to be valid. An unregistered right is not merely unenforceable against third parties; it is treated as never having come into existence. Anyone sitting on a signed but unregistered musataha agreement should treat that as an urgent item rather than a paperwork backlog.

The federal 50-year cap on musataha has been removed

The old Civil Code fixed a statutory maximum of 50 years for musataha. The 2025 decree-law removes that federal ceiling. This does not automatically extend anything, because the emirate-level laws still apply on top: Abu Dhabi Law No. 19 of 2005 continues to limit non-nationals in investment areas to a musataha of up to 50 years renewable for a similar period. What it changes is the negotiating space for contracts that are not caught by an emirate cap, particularly government and corporate grants of land.

Emirate real estate laws were not repealed by the new Civil Code. Ownership, registration, designated areas and fees are still governed by Dubai Law No. 7 of 2006 and Abu Dhabi Laws No. 3 and No. 19 of 2005, with the federal code filling the gaps.

Where Foreigners Can Hold These Rights

Both emirates restrict outright land ownership by nationality and then carve out designated zones where non-nationals can hold rights. The carve-outs are not identical, and the difference decides which instrument you will actually be offered.

Dubai

Article 4 of Dubai Law No. 7 of 2006 restricts the right to own real property to UAE and GCC nationals, companies wholly owned by them, and public joint stock companies. Subject to the Ruler’s approval, in areas the Ruler determines, non-UAE nationals may be granted freehold ownership without time restriction, or “usufruct or leasehold over Real Property for a period not exceeding ninety-nine (99) years”. Those areas are the designated areas listed in Regulation No. 3 of 2006 and expanded since.

Note what Article 4 does not say. It names freehold, usufruct and leasehold for foreigners in designated areas, not musataha. Musataha still exists in Dubai as a Civil Code right and the Land Department registers musataha contracts, but in practice it appears in Dubai as a grant over government or corporate land to a developer or operator rather than as a residential product sold to individual expatriate buyers. If a Dubai residential unit is marketed to you as “musataha”, ask to see the registration entry before anything else.

Abu Dhabi

Abu Dhabi took the opposite path historically. Before 2019, non-nationals in Abu Dhabi’s investment areas could own floors and units but not the land beneath them, and otherwise held usufruct of up to 99 years or musataha of up to 50 years renewable. Law No. 13 of 2019 amended Articles 3 and 4 of Law No. 19 of 2005 and opened full freehold ownership in the investment areas to foreign owners, with effect from 16 April 2019.

The amendment did not delete musataha and usufruct. It added freehold alongside them. Abu Dhabi’s own registration regulations still list musataha contracts and usufruct rights as registrable transactions with their own fee lines, and the emirate continues to grant musataha over government land for schools, healthcare, industrial and infrastructure projects. Our guide to the freehold investment zones and the 2% transfer fee covers the ownership route in detail.

The Ten-Year Rule That Decides Whether You Can Sell or Mortgage

This is the single provision that separates a bankable long-term right from an expensive license to occupy, and it is easy to miss because it sits in one sentence of Article 4 of Abu Dhabi Law No. 19 of 2005.

Can I mortgage a musataha or usufruct right?

In Abu Dhabi, a holder of a usufruct or musataha right for more than ten years may dispose of the property by any action, including mortgage, without the owner’s permission. The owner, in turn, may not dispose of the land without the consent of the usufruct or musataha holder. Both parties may agree otherwise in the contract, which is exactly what many landowners try to do.

Two consequences follow. First, the ten-year threshold is a cliff, not a slope: a nine-year usufruct is a very different asset from an eleven-year one, and it is the remaining term that a bank will look at when the right is offered as security. Second, because the statute lets the parties contract out, the default protection can be traded away in the drafting. Read the disposal and mortgage clauses before you read the rent.

Registration mechanics follow the same logic as any other real right: a mortgage over a musataha or usufruct is registered against the property record, in the same way a mortgage over freehold property is registered with the Land Department.

Registration and What It Costs

Registration is not optional and, since 1 June 2026, is what brings the right into existence. In Dubai, Article 9 of Law No. 7 of 2006 states that transactions creating, transferring, amending or extinguishing real property rights are not deemed valid unless recorded in the Property Register, and Article 7 gives the register absolute evidentiary value against all parties unless fraud or forgery is proven. In Abu Dhabi, registration is handled by the Abu Dhabi Real Estate Centre under Law No. 3 of 2005 and its executive regulations, with the Dari platform and TAMM as the front end.

Abu Dhabi’s published fee schedule sets out what each transaction type costs. These are the headline lines relevant to long-term rights.

Transaction Registration fee (Abu Dhabi)
Musataha contract 1% to 2% of the consideration value, depending on zone classification
Long-term lease or usufruct 1% of the consideration value
Lease registration 1%, calculated on a one-year basis
Sale of property Set by the Executive Committee within a 1% to 4% band, divided equally between seller and buyer unless agreed otherwise
Search certificate AED 100
Replacement title deed AED 500

Two details in the Abu Dhabi rules are worth knowing before you budget. Musataha registration fees can be paid in installments across the contract years from the start of project operation, which materially changes the cash profile of a large development. Private schools charging tuition below AED 20,000 are exempted from the musataha registration fee, a carve-out that exists precisely because musataha is the standard instrument for school sites.

Leases of more than four years must be registered in Abu Dhabi; shorter leases may be noted but registration is not mandatory. That four-year line is the point at which an ordinary tenancy starts to behave like a registrable interest, and it is separate from the Tawtheeq registration every Abu Dhabi tenancy needs.

Inside a Government Musataha Contract

Most published commentary stops at the definition. The obligations are where musataha deals actually go wrong, and Abu Dhabi’s standard musataha contract sets them out. If you are taking government land, expect these terms rather than negotiating from a blank page.

  • Build within 24 months. The holder must complete construction within 24 months of signing. This is a hard project-management constraint, not a soft target, and it starts running from signature rather than from permit issue.
  • Annual musataha fee, paid up front each year. The consideration is structured as an annual payment due at the beginning of each year of the term.
  • Civil liability insurance of at least AED 1 million per claim. Comprehensive cover is the holder’s cost.
  • Permits, utilities and government fees are the holder’s problem. Water, electricity, gas, telephone, waste removal and any taxes imposed on the property or the improvements all sit with the musataha holder, as do the registration costs.
  • Use is limited to the approved project. The land can only be used for the objectives the contract names, and the owner retains inspection access.
  • Six months’ written notice before expiry. The holder must tell the owner in writing, at least six months before the contract ends, whether it intends to renew or terminate. Six months before expiry the plot can be put out to public bidding under Abu Dhabi’s procurement procedures.

That last point is the one that surprises operators. A musataha term ending is not a renewal conversation by default; it can become a competitive tender for the site you built on.

What Happens When the Term Ends

At expiry, the musataha right and everything built under it revert to the landowner, who takes the property free of the encumbrance and is free to grant new rights over it. The reversion principle comes from the Civil Transactions Law, and it is why the useful economic life of the building has to fit inside the term rather than merely overlap it.

Two situations soften that outcome. Where the musataha is mortgaged, a creditor may seek a replacement holder to complete the remaining term rather than lose its security outright; failing that, compensation flows to the creditor. Where the owner terminates early and the holder has not breached, compensation is calculated on the cost of the improvements, their commercial value where mortgaged, and depreciation.

What happens to the building at the end of a musataha?

It belongs to the landowner. The musataha holder owns the structures only for the duration of the right, and on expiry both the land and everything on it pass to the owner without encumbrances, unless the contract provides for compensation or the parties agree an extension.

When Musataha or Usufruct Is the Right Instrument

These rights are not consolation prizes for people who cannot buy freehold. They solve problems freehold cannot.

Musataha is the correct instrument when the landowner will not sell but you need to build and finance a building: government land for a school, clinic, warehouse, staff accommodation or a district cooling plant. It gives you registrable ownership of the structure, a mortgageable interest once the remaining term passes ten years, and a defined exit. It is the wrong instrument when your business case needs a terminal value in the land itself, because there is none.

Usufruct is the correct instrument for long occupation of an existing building where the owner wants to keep title, and it is common in leasehold residential areas and in corporate occupation. It is the wrong instrument when you intend to alter or redevelop the property, because the definition requires the property to be kept as it is. If your plan involves demolition or a substantial rebuild, you need musataha or freehold, not usufruct.

A decision point that catches buyers: if you are choosing between a discounted long-term right and a freehold unit in a nearby tower, the discount has to compensate for a diminishing asset. A usufruct with 60 years to run is worth less each year in a way freehold is not, and the resale market for it is thinner. Our comparison of the long-term implications of freehold and leasehold areas in Dubai works through the same arithmetic for residential buyers.

How to Verify a Musataha or Usufruct Before You Sign

Because these are registered real rights, the register is the answer to almost every question a seller might be vague about.

  • Pull the property record. In Abu Dhabi, request a search certificate from the Abu Dhabi Real Estate Centre through Dari or TAMM. In Dubai, verify through the Land Department, in the same way you would check a title deed before a purchase. Confirm the right is actually registered, not merely contracted.
  • Check the remaining term, not the original term. A “50-year musataha” granted in 2004 has under four years left, and it fell below the ten-year mortgage threshold years ago.
  • Read the disposal clause. The statutory right to sell or mortgage above ten years can be contracted out.
  • Check who pays service charges and how they are set, particularly in a jointly owned development where service charges are approved and regulated separately.
  • Confirm the renewal mechanism. “Renewable” in a statute means renewable by agreement, not automatically.

Frequently Asked Questions

Is musataha the same as leasehold?

No. Leasehold is a contractual right to occupy for a term. Musataha is a registered real right that lets the holder build on the land and own the buildings for the term, and once the remaining term exceeds ten years in Abu Dhabi the holder can sell or mortgage it without the owner’s consent. A lease gives no ownership of what you construct.

How long can a musataha last in the UAE?

The federal Civil Transactions Law that took effect on 1 June 2026 removed the old 50-year statutory maximum, but emirate law still applies. In Abu Dhabi’s investment areas, non-nationals may hold a musataha for up to 50 years, renewable for a similar period if both parties agree. Any specific contract is capped by whichever emirate rule governs the land.

Can a foreigner hold a usufruct anywhere in Dubai?

No. Under Article 4 of Dubai Law No. 7 of 2006, non-UAE nationals may be granted freehold, usufruct or leasehold of up to 99 years only in areas determined by the Ruler, which are the designated areas listed in Regulation No. 3 of 2006 and its later additions. Outside those areas, ownership rights are restricted to UAE and GCC nationals, companies wholly owned by them, and public joint stock companies.

Does a musataha or usufruct give me a UAE residence visa?

Property-linked residence routes are built around registered ownership of a qualifying property at a stated value, so a right that is not ownership generally does not qualify. Check the current criteria with the issuing authority before assuming a long-term right counts, and see our guide to the legal requirements that apply to foreign property investors.

What happens if a musataha agreement is never registered?

Since the Civil Transactions Law took effect on 1 June 2026, registration is a condition of the right’s validity, so an unregistered musataha is treated as never having been created. In Dubai, Article 9 of Law No. 7 of 2006 already provided that transactions creating real property rights are not valid unless recorded in the Property Register.

Can I renovate or extend a property I hold under usufruct?

Not without the owner’s agreement. Usufruct is defined as the right to use and exploit another’s property “as long as it is kept as is”. Alteration is what distinguishes musataha from usufruct, so a plan involving demolition, extension or substantial rebuilding needs a different instrument.

What does a musataha cost to register in Abu Dhabi?

Between 1% and 2% of the consideration value depending on whether the land is in a vital or a developing zone. The fee can be paid in installments over the contract years from the start of project operation, and private schools with tuition below AED 20,000 are exempt.

Who owns the building during a musataha?

The musataha holder owns the structures they erect for the duration of the right, which is why the interest can be mortgaged. Ownership of the land stays with the owner throughout, and the buildings pass to the owner when the term ends.

Can the landowner sell the land while my musataha is running?

In Abu Dhabi, where the holder’s right runs for more than ten years, the owner may not dispose of the property without the holder’s consent, unless the contract says otherwise. A sale that does go through does not extinguish a registered real right, because the right attaches to the land rather than to the seller.

Do these rights exist outside Dubai and Abu Dhabi?

Yes. Musataha and usufruct are federal Civil Transactions Law concepts and apply across the UAE, but each emirate sets its own rules on who may hold them, in which areas, and how they are registered. Sharjah, for example, has its own framework for non-GCC nationals, covered in our guide to buying property in Sharjah as an expat.

Official Sources

This article references the following official legislation and government sources:

This guide is for informational purposes only and is not legal advice. Information is current as of August 2026. Musataha and usufruct terms are heavily negotiated and the statutory defaults described here, including the ten-year disposal rule, can be varied by contract. Abu Dhabi registration fee percentages are set by Executive Council and Executive Committee resolutions and are subject to change, and zone classification determines which rate applies. The Federal Decree-Law No. 25 of 2025 provisions described here are drawn from the legislation portal record and published legal analysis of the new Civil Transactions Law, as the full consolidated English text is not publicly downloadable. Verify current rules and fees with the Dubai Land Department or the Abu Dhabi Real Estate Centre, and take advice from a licensed UAE lawyer before signing or registering any long-term real right.