The Dubai Municipality announced today that Housing fees will become mandatory for all residents in Dubai from 1st January 2011.
The Housing Fee is 5% of the tenancy contract for tenanted properties. For Landlord-occupied properties, the landlord will also be charged 5% of what the RERA rent index shows as the average rental price for the property in question.
This Housing Fee is equivalent to what expats will be more accustomed to as Council Tax and will be used to pay towards the upkeep of roads, landscaping, road lights etc in each of the residential communities.
Whilst 5% sounds like a large additional payment that residents will have to pay for, it is still much cheaper than other property related taxes that are levied in other countries.
Will the enforcement of the Housing Fee from January next year have any impact on the rental prices in residential areas? Some people think so as tenants will try to pass this cost onto the landlords by requesting a reduction in the rent paid to off set this additional payment.