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Dubai chases housing fee non-payments

http://www.arabianbusiness.com/589399-d ... on-payment



HOUSING FEES: Dubai Municipality is cracking down on the non-payment of housing fees in the emirate. Residents living in 300,000 units in Dubai are currently not paying housing fees, a charge equivalent to five percent of their annual rent that is added to DEWA bills.

Dubai Municipality has announced a crackdown on the non-payments, saying that all residents in Dubai will have to pay by January 1 2011.

In comments published in Emirates Business on Monday, Abdulla Hashim Abdulghafoor, head of Housing and Marketing Fees at the Dubai Municipality, said the municipality expects to earn revenues of up to AED600m by the end of 2011 from the housing fee collection.

Aref Abdulrahman Ahli, director of the Finance Department at the Dubai Municipality, said DEWA estimated that there were currently 300,000 units not paying the housing fee.

He told the paper: "All unit occupants in Dubai, whether villas/apartments in free zone or freehold areas, will be [required] to pay the housing fee. We have set a time line of January 1, 2011, by when we expect all these units to start paying the housing fee."

Housing fees are included in DEWA bills. It is calculated as five percent of the yearly rental charges.

Ahli added that the calculation for housing fees for freehold property owners would no longer be charged at 0.5 percent of their annual sales contract value, but would be five percent of the average annual rent calculated by RERA in its rental index for that particular community.

We have been paying via the DEWA bill for almost 5 years, and now it looks like they are going to raise the amount

Hidden taxation by a Bankrupt nation.

Five percent on the average annual rent from 0.5? Quite and increase.
That means that rents are going up also. Landlords want a return on investment and if DEWA needs 5 percent of annual rent, there goes the investors/landlord annual margin down the drain.

They are milking the residents to get cashflow. Obviously.

RobbyG wrote:Hidden taxation by a Bankrupt nation.

Five percent on the average annual rent from 0.5? Quite and increase.
That means that rents are going up also. Landlords want a return on investment and if DEWA needs 5 percent of annual rent, there goes the investors/landlord annual margin down the drain.

They are milking the residents to get cashflow. Obviously.

It's not quite that bad, the system was set up as follows;

For house owners 0.5% of the purchase price divided by 12 equals the monthly payment.

For Renters 5% of the Annual rent divided by 12 equals the monthly payment.

The amount is collected on your DEWA (Dubai Electricity & Water Authority) Bill.

When you rent a place you will have the DEWA in your name and not the Landlords.

I have actually been paying since April 2005 so it is over 5 years.

RobbyG wrote:Hidden taxation by a Bankrupt nation.

Five percent on the average annual rent from 0.5? Quite and increase.
That means that rents are going up also. Landlords want a return on investment and if DEWA needs 5 percent of annual rent, there goes the investors/landlord annual margin down the drain.

They are milking the residents to get cashflow. Obviously.

More than likely Emiratis are not subjected to these charges. Landlords who are renting out properties DO NOT pay the fees, they are passed on to the tenants as the DEWA accounts are in the name of the tenant, not the landlord. Apartment/villa owners who either reside in the properties they purchased or let them sit empty pay the fee.

I'm sure that in most countries there is an (annual) tax on property, so Dubai isn't really out of line in enforcing the collection of those fees. Keep in mind homeowners got a pass when times were good. So if they were given a pass for 5 years they should consider themselves lucky.

This is very different from the trumped up traffic fines.

^^^I have no idea who that woman is. I will ignore her appropriately, even if she talks sense.

Puff puff, zipp zipp, carry on.

What are you doing with my old tag line??? Nothing original about you is there?? And its SIP SIP.

Old nag. Didn't change a bit. Ignore.

See you haven't changed other than probably added another hemorroid to that mouth of yours. Still a little squirt.

HA HA HA. You have an "L" on your forehead.

Bora Bora wrote:

RobbyG wrote:Hidden taxation by a Bankrupt nation.

Five percent on the average annual rent from 0.5? Quite and increase.
That means that rents are going up also. Landlords want a return on investment and if DEWA needs 5 percent of annual rent, there goes the investors/landlord annual margin down the drain.

They are milking the residents to get cashflow. Obviously.

More than likely Emiratis are not subjected to these charges. Landlords who are renting out properties DO NOT pay the fees, they are passed on to the tenants as the DEWA accounts are in the name of the tenant, not the landlord. Apartment/villa owners who either reside in the properties they purchased or let them sit empty pay the fee.

I'm sure that in most countries there is an (annual) tax on property, so Dubai isn't really out of line in enforcing the collection of those fees. Keep in mind homeowners got a pass when times were good. So if they were given a pass for 5 years they should consider themselves lucky.

This is very different from the trumped up traffic fines.

One small correction Bora

Landlords/owners who have empty properties are still liable and have to pay the Dewa standing charges and the housing fee. It is irrelevant that the property is unoccupied.

When the property is empty surely the owner would make sure the service from DEWA is discontinued until such time the property is occupied, that way, no bill no fee.

Bora Bora wrote:More than likely Emiratis are not subjected to these charges. Landlords who are renting out properties DO NOT pay the fees, they are passed on to the tenants as the DEWA accounts are in the name of the tenant, not the landlord. Apartment/villa owners who either reside in the properties they purchased or let them sit empty pay the fee.

One small correction Bora

Landlords/owners who have empty properties are still liable and have to pay the Dewa standing charges and the housing fee. It is irrelevant that the property is unoccupied.[/quote]

See highlighted text.

-- Tue Jun 01, 2010 8:38 am --

Bora Bora wrote:

Bora Bora wrote:More than likely Emiratis are not subjected to these charges. Landlords who are renting out properties DO NOT pay the fees, they are passed on to the tenants as the DEWA accounts are in the name of the tenant, not the landlord. Apartment/villa owners who either reside in the properties they purchased or let them sit empty pay the fee.

Arniegang:

One small correction Bora

Landlords/owners who have empty properties are still liable and have to pay the Dewa standing charges and the housing fee. It is irrelevant that the property is unoccupied.

See highlighted text.[/quote]

Dang it ! I'm not paying any housing fees at the moment. It was one of the good things about moving to DG the extremely almost non existant utilities bills.

Yeah I've never paid it either. erm so exactly what is the housing fee for?

Chocoholic wrote:Yeah I've never paid it either. erm so exactly what is the housing fee for?

When they first added the Housing fee to my DEWA bill I telephoned DEWA and asked what it was for, they then referred me to Dubai Municipality.

A very pleasant lady answered that it is for Roads, Street Lighting, Garbage Collection etc. I then said to her that I was living within a community that charged a service fee for all of those things, she then asked me whether I ever went to Deria City Centre or any other place within Dubai, I replied yes of course, she replied that it was for those roads and lighting.
I then said what about the Garbage, she replied where do you think it goes after it leaves the community.

She had the answers I must admit, basically it is similar to the rates that are charged in the UK, the only problem I have is that many people have been getting away without paying for years now, I wonder if they will backdate it to April 2005, that would be something?

sage & onion wrote:When the property is empty surely the owner would make sure the service from DEWA is discontinued until such time the property is occupied, that way, no bill no fee.

Now that would make sense.
But DEWA still read the meter and send bills if the property is occupied or not.
They just keep sending the bill to the last registered address.

benwj wrote:

sage & onion wrote:When the property is empty surely the owner would make sure the service from DEWA is discontinued until such time the property is occupied, that way, no bill no fee.

Now that would make sense.
But DEWA still read the meter and send bills if the property is occupied or not.
They just keep sending the bill to the last registered address.

Even if the last bill has been cleared and the services turned off by request?

sage & onion wrote:

benwj wrote:

sage & onion wrote:When the property is empty surely the owner would make sure the service from DEWA is discontinued until such time the property is occupied, that way, no bill no fee.

Now that would make sense.
But DEWA still read the meter and send bills if the property is occupied or not.
They just keep sending the bill to the last registered address.

Even if the last bill has been cleared and the services turned off by request?

Yep

I, too, have paid this fee since arriving. At the height of the market it was quite a chunk of change, still is actually. In reality, it is a council tax, so no biggie. Where I live there are no sidewalks or streetlights, etc. but the rubbish skips get emptied daily (a year living here and I have never, ever seen a garbage truck, though?!?) I know from experience that when you bring your rental contract to DEWA to get it turned on, they got the rent figure from there. If they did not "fill in that line"...you did not pay. If you had your DEWA switched on years ago, you probably did not pay the fee.

After the introduction of RERA (they still in business?) and registering contracts became mandatory, they got the figures from there for older properties or properties that changed names (company accom to private). My current villa has been in "the family" for seven years. There was never a housing fee on the bill till last May, when the contract was renewed formally in writing. We suspect the LL registered it with RERA, otherwise, the DEWA has been in the same person's name for years and the muni would never know how much our rent is.

I feel bad for long-time owners who bought properties off plan and will now need to pay what the muni "thinks" they could rent it for. Anyone who bought in the last 2 years will likely get a reduction, but those that bought in the gated communities will be seeing a sizable increase. Adding to the fact that those owners (like Sage) already pay ludicrous prices for community fees, community cooling, Palm utilities, etc. it is going to put a dent in the pocket for sure.

People that bought a place for 2 million off plan (the Palm) were paying 833 AED a month. RERA says they can rent it for 400k a year, which makes their housing fee double to almost 1700 p/m. It adds up...the increase is the same as 2 return tickets home every year!

Chocs...you should have a surprise in a month or so on your DEWA bill for the new place.

RERA "says" they can rent it for 400K a month? Would love to know what year they came up with that figure. If that kind of rent can be seen NOW, why are LLs and tenants negotiating for lower rents? Even LLs are renegotiating with tenants who are renewing their leases and the tenants are seeing a drop in rent? Who in their right mind would pay 400K annually??

Hellooooo???? RERA!!!!!! Wake up!!!!! You need to do a reality check.

Ahhhh, nicek, just another incentive for people to stay/buy/invest in Dubai.

They (Dubai) hope that everybody will work harder when you have to pay more hidden taxes. More deductions, more work needed to keep your disposable income levelled.

Must be ME logic.

RobbyG wrote:They (Dubai) hope that everybody will work harder when you have to pay more hidden taxes. More deductions, more work needed to keep your disposable income levelled.

Must be ME logic.

Working harder doesn't translate into more money. There is a trade off to the housing fee. For some expats it may mean giving up a housekeeper? and/or a nanny? not sending the 2 year old to nursery school? not sending the little ones to a "status" school? That's one way to keep disposable income levelled - through sacrifice. For those that can't find it in them to sacrifice (oh!! the disgrace!) or don't want to make the sacrifice (what will people think??) - well, it will be beans on toast or foul 4 times a week twice a day.

Like i said, must be ME logic. Irony!

Mmmm and will companies be taking into account the housing fee in their accomodation allowances? I doubt it.

Actually some Companies that I know actually pay it upon presentation of the bill.