Abu Dhabi Implements 3% Housing Fee
Here’s what the fee on households means for you…
If you are an expat renting a home in Abu Dhabi, you will now have to pay a new municipality fee
. Moreover, tenants will suffer a blow as this fee is to be backdated to February of last year
. Therefore, you will have to pay 11 months worth of this charge, in addition to this month.
This municipality charge consists of three per cent of the value of your annual rental contract
. It will be collected through your utility bills from the Abu Dhabi Distribution Company (ADDC). The law was officially passed in February 2016, which is why it has to be paid from that date. There was simply a delay in collecting it.
SEE ALSO: Property guide by area in Abu Dhabi
The backdated portion of the fee must be paid in one lump-sum
, and the current ones are to be paid in monthly installments once you get your bill. If your landlord normally pays the ADDC bill, then it will be their responsibility to pay it, but they can choose to pass on the cost to you. Home owners are exempt from paying this fee. Dubai already has a five per cent housing fee and Abu Dhabi is now following suit.
Last year, job cuts in the energy and banking sectors caused the Abu Dhabi residential rents to fall by around five percent. With the lower oil prices, governments need to find ways to generate more revenue. A GCC-wide Value Added Tax (VAT) has been under consideration for some time now.