Expatriates should beware hidden costs of living in UAE

A new report says expats drawn in by a tax-free environment should be sure to take into account rising costs.

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ABU DHABI // Expatriates travelling to the UAE to work are attracted by the tax-free income, but are often unaware of the hidden costs.

A new Economist Intelligence Unit report entitled UAE Expats and the Bottom Line, has shown the property market and rising education fees to be some of the challenges.

The report is based on an annual survey tracking more than 50,000 prices in more than 130 cities.

Adam Green, editor of the report, said would-be expatriates should consider the cost of utilities and other fees before moving.

“While the UAE does still offer high salary packages and zero income tax, expats should not assume they are going to simply pocket the difference of the tax break, with everything else staying equal,” Mr Green said.

“The cost of property and school fees are among the biggest challenges, but utilities, charges and indirect taxes can all add up.

“Expats who plan to save money while here need to do their sums before making the leap.”

Emirati Jassim Al Suwaidi, 34, said even nationals had to pay indirect taxes, including Salik and Mawaqif.

“We didn’t have to pay for parking not so long ago and could drive to Dubai without the Salik tags,” Mr Al Suwaidi said.

“ Even if we go to a restaurant in a hotel, we have to pay a 16 per cent service and tourism fee.

“I didn’t know I could be a tourist in my country.”