Abu Dhabi introduces 3% municipal fee for expats renting homes

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Expatriate tenants in Abu Dhabi will have to pay 3 per cent extra on their rent, as a municipality contract fee.

The fee is being collected by the emirate’s utilities provider, the Abu Dhabi Water and Electricity Authority, in instalments, and is a minimum of Dh450 per year. UAE nationals renting property will be exempt from the payment.

His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, announced the decree on Monday in his capacity as head of the Abu Dhabi Executive Council.

Accordingly, the fees have been implemented since the beginning of March. They will be used by the emirate’s municipal regulator, the Department of Municipal Affairs and Transport, for the registration of rental units and the regulation of the rental market.

Similar municipal fees are also charged in other emirates. For example, Dubai imposes a municipal tax of five per cent of the annual rent, and it is collected in instalments by the Dubai Water and Electricity Authority.

In Sharjah, a 2.5 per cent fee is payable at the time of contract renewal.

New table of fees for Tawtheeq

Renting a residential unit:

  • Minimum of Dh450 per unit per year, or at least 3 per cent of the annual rental fee payable over 12 months
  • Registration of tenancy contract by landlord – Dh100
  • Modification of tenancy contract by landlord – Dh50
  • Modification of tenancy contract at landlord’s request – Dh50
  • Modification of tenancy contract at tenant’s request – Dh100
  • Registration of property data by landlord – Dh1,000
  • Registration of rental unit data and modification of any property data by landlord – Dh5 each
  • Opening a Tawtheeq account – Dh200
  • Getting a Tawtheeq system username – Dh300
  • Training for using the Tawtheeq system – Dh300 per user
  • Transfer of rental units management by landlord  – Dh50
  • Modification of landlord account details – Dh50
  • Printing an extra certified copy of an original registered tenancy contract – Dh50

The rental contract fee follows the introduction of a new levy of 4 per cent on the price of hotel stays, also announced this week.

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Governments and municipal authorities across the region are seeking new sources of revenue following the rapid decline of the price of oil from above $110 a barrel in June 2014 to about $43 yesterday.

Value added tax, or VAT, is expected to be introduced across the GCC by the end of 2018.

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