Abu Dhabi Expats to Now Pay 3% Fee on Rent

Expatriate tenants living in Abu Dhabi will now have to pay a three per cent fee on their rent as a municipality contract fee, according to the February Official Gazette.

The Abu Dhabi Water and Electricity Authority will collect the new charge - from which Emiratis are exempted - along with the tenant's monthly electricity and water bills.

The move comes the same week as the emirate imposed a four per cent fee on hotel stays.

Dr Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the three per cent fee on rental cost is likely to have a greater impact than the hotel tax, given the importance of rent as a proportion of overall spending by expatriates.

"This, along with the lower oil price and the wider reform measures, will likely lead to a deceleration in private consumption in 2016," Malik said. "The broadening in revenue measures is positive for the fiscal position. Abu Dhabi remains proactive in the fiscal reform front," she added.

In Dubai, rentals are already subject to a five per cent housing fee through the Dubai Water and Electricity Authority.

Some local residents in Abu Dhabi noted that although the move may help rental services in the long run, many questions remain.

"If my annual rent is Dh130,000 and I'm already seven months into the rental contract, does it mean that I have to pay Dh3,900 or just pay for the remaining five months of the contract?" asked Romanian resident Magdelana Candea, for example.

Published: http://www.khaleejtimes.com/business/real-estate/abu-dhabi-expats-to-now-pay-3-fee-on-rent



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