Expatriate renters in Abu Dhabi to pay more municipal property tax

Published:  28 Jun at 6 PM
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Tagged: UAE, Jobs
Over 2.3 million expats in Abu Dhabi will pay more to rent their homes due to increases in municipality taxes.

Expat professionals living and working in Abu Dhabi will now receive increased monthly bills from their local municipality in addition to the usual electricity and water bills. Notification of the new municipality tax was sent out in February this year but the collection of the tax was put back to the end of May. According to the company charged with tax collection on behalf of the Department of Municipal Affairs, the monthly payments will make it easier to budget for the extra amount.

Although the increase is being mooted as not targeting expatriates in the emirate, there are only 550,000 UAE nationals living in Abu Dhabi as against the entire population of around 3 million. As a result, it’s not difficult to work out which demographic is being selected as the latest cash cow. Landlords are expected to be unhappy about the move, as they’re already undergoing problems caused by the weakening jobs market and it's now believed many will be encouraging their tenants to make an offer for the properties.

Exemptions from the increase are being granted to Emiratis, home owners and those directly or indirectly employed by the government, with discouraging expatriates from renting properties expected to increase the numbers deciding to buy. The change is the latest tax reform in a series of many in the UAE over the past few years, and is being put into place as a part of the transition from an oil and gas economy to one which is, hopefully, knowledge-based.

Another, unrelated, change is likely to cause more confusion as drivers make the choice between self-serve at petrol stations and paying an attendant to fill the tank. The new system has been installed at around 40 petrol stations and has garnered mixed reactions amongst Abu Dhabi motorists. Reactions vary between ‘inconvenient’ and worry over the so-called Smart Tag system intended to make filling up and paying easier for self-servers. It seems Emirati nationals aren’t willing to do-it-themselves, leaving expats to save the extra cost of an attendant, but the vast majority of motorists are convinced the changes will eventually result in horrendous queues.
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