Housing fee: Homeowners must pay too

The housing fee also applies to expatriates who own freehold property, a senior Dubai Municipality official has said.

Khalid Ahmad Abdul Qader, Head of Dubai Municipality's Revenue Section, told XPRESS: "The housing fee also applies to expatriate owners of freehold property in Dubai. The calculations are as follows: Ten per cent of the total price will be considered as annual rent, and five per cent of this annual rent will be the housing fee."

This means the owner of a one-bedroom freehold property at International City worth Dh400,000, for example, would pay Dh2,000 in annual housing fees or about Dh167 per month.

A property worth Dh2 million in the gated or the so-called new Dubai communities would then have to pay a housing fee of Dh10,000 or Dh833 per month through Dubai Electricity and Water Authority (Dewa), on top of the regular maintenance fees collected by the homeowners group or developers.

Queries Galore

People who have bought freehold property in Dubai sent XPRESS numerous queries asking why they were being charged a housing fee when they own the property.

Dubai's 46-year-old housing fee law charges a five per cent fee against the tenancy contract for rented properties.

Employers pay a flat housing fee for each employee based on their job category when the company renews its trade licence at the Dubai Economic Department.

The municipality's Finance Department estimates that up to 300,000 old residents of Dubai have not paid the fee up to now as residents have ignored requests for them to submit a copy of their tenancy contract with Dewa.

Since February 2005, about 100,000 residents in Dubai have been paying the fee along with their monthly utility bill.

Last week, Arif Ahli, Director of the Finance Department at Dubai Municipality, said they are finalising a scheme to ensure every expat in Dubai pays the said fee.

"From January next year, we have a plan to make sure that the law is implemented," he said.