Dubai authorities delay full implementation of expat housing tax

Talks with utility companies have delayed implementation of charges

Authorities in Dubai have delayed plans to introduce housing fees for all expats as talks with utility companies delay the full implementation of the monthly charge.

The delay means that around 65% of expats are paying the charge billed as part of monthly utility bills while others are not.

Dubai Municipality has been forced to push back the plans to charge in all 37 municipality areas and a spokesman said a date for completion has not yet been reached.

Last October authorities said they hoped to be charging all expats a housing fee by June as they looked to roll out the city wide campaign to tighten the net on those not yet being billed.

‘It is a joint project so we are discussing a few issues with DEWA (the utilities provider) which we haven’t agreed on yet,’ said Abdullah Hashim Abdulghafoor, fees and revenues officer at Dubai’s housing fee department.

The housing fees are calculated at 5% of a tenant’s annual rent while property owners pay 5% of the annual rental value, as calculated by the Real Estate Regulatory Authority’s index.

Dubai authorities are collecting fees from 17 out of a possible 27 zones across the emirate, Abdulghafoor said, including all new residents in the remaining ten areas.

Among the areas not yet fully covered include Al Barsha, Discovery Gardens, Palm Jumeirah, Burj Khalifa area and Dubai Marina.

Emiratis do not pay the charge, leading some residents to refer to the fee an expat tax. It is not the first time it has been delayed. It was first introduced in 2005 and originally expected to be rolled by January 2011, then delayed again until June this year.

Fines have also been introduced for non payers and to encourage people to complete an online form to ensure they are correctly billed. Tenants that fail to complete the application will see their housing fee calculated on estimated rent or property values from RERA.

‘We are going to remind them that they still have to register and if they don’t they will be billed as per the rental index. We’ll probably start sending the notices within a month or two and after that we’ll to start resuming the billing for the remaining cycles,’ explained Abdulghafoor.

‘By filling in the form they guarantee being billed accurately, if they don’t do that then they risk being charged more than their actual rent,’ he added.