Homeowners off the hook for Abu Dhabi’s three per cent municipality fee

Abu Dhabi’s Department of Municipal Affairs and Transport (DMAT) said on Wednesday that the new 3 per cent municipality charge being introduced this month will not apply to homeowners, merely expatriate renters of property. A spokesman confirmed to The National that the fee covers tenancy agreements only, and is directly related to the rental amount declared in residents' Tawtheeq contracts. The sum each householder pays will be therefore adjusted each year in line with changes in rent. “Should the landlord opt to cut the rental amount, the municipal fees will be reduced accordingly,” a spokesman said. The levy is being applied across the whole of the emirate of Abu Dhabi, including Al Ain and the Western Region and is being introduced to help pay for municipal services such as street cleaning and landscaping, among others. The spokesman said that it “will help to ensure the continuity and sustainability of service improvement and development”. Abu Dhabi is levying the fee that is backdated to February 2016 through utility bills, following in the footsteps of Dubai, which charges a 5 per cent municipality fee. __________________________________ Abu Dhabi municipality tax The new municipality fee payable by every expatriate tenant in Abu Dhabi has begun appearing in water and electricity bills from Abu Dhabi Distribution Company. Delores Johnson / The National ■ Non-payment of municipality fees risks disconnection of utilities, legal charges ■ Homeowners off the hook for Abu Dhabi's three per cent municipality fee ■ Q&A: What Abu Dhabi's 3 per cent municipality fee means for you ■ Editorial: Abu Dhabi's municipal fees will help build the economy ■ Abu Dhabi introduces 3% municipal fee on expat home rentals __________________________________ DMAT said that it had monitored public response to the proposed introduction of a fee since the law introducing it was passed last February. A spokesman said that its introduction had sparked “contrasting responses on the part of community members. “Some are in support of the resolution and understand it thoroughly, though others are contrary to it,” said the spokesman. “But we hope that all community members would appreciate that municipalities of the emirate offer a wide spectrum of services to community members and continuously seek to improve the quality of life.” The introduction of the charge surprised many people in the city. Long-term resident Peter Scarlet said that he only learnt about the charge when he called power distributor Abu Dhabi Distribution Company (ADDC) after receiving a text on Monday regarding an “overdue” payment. The bulk of this comprised the lump sum that customers are being asked to pay in current ADDC bills as a backdated municipality fee from February 2016. “They put it into effect with no warning,” said Mr Scarlet. “No one has been told you have to pay for all of last year at once in addition to paying a monthly charge. It’s poor communication.” The introduction also seems to have caught developers by surprise. Sameh Muhtadi, the chief executive of Bloom Holding, said that the developer had not had any prior communication with the municipality before the announcement. “We’re trying to set up a meeting with the municipality early next week to try and find out more about it,” he said. When asked why the charge was only being introduced about 10 months after the resolution announcing it was passed, the spokesman said that the procedure for payments “was not quite ready” when the move was first announced. “Having completed the suitable procedure and established the online link between the Municipalities and the Abu Dhabi Water & Electricity Authority, we have decided to implement the resolution in a retroactive and cumulative base since Feb 2016 until the end of this year,” the spokesman said. “The fees will then be distributed over 12 months staring from January 1, 2017.” mfahy@thenational.ae Follow The National's Business section on Twitter