Abu Dhabi to regulate and tax Airbnb-style rental market

Short-term holiday lets will require a licence and owners must pay a six per cent tourism fee under new rules

Urban skyline in ABU dhabi
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Abu Dhabi will bring in new regulations governing the short-term rental market, requiring owners to obtain a licence and pay fees to legally operate.

Owners letting out their homes under Airbnb-style arrangements will pay the city's tourism authority six per cent of their rental income.

Department of Culture and Tourism - Abu Dhabi said the move will to ensure the safety of visitors and maintain standards.

Fines will be imposed on unlicensed units and those that do not meet the minimum service guidelines.

Any problems faced by guests, residents in same building or the holiday home management company itself go unaddressed in the absence of regulation

“We believe that this will help in attracting a diverse segment of visitors to the emirate, and will enable owners of unique and attractive accommodation offerings to market their units,” said acting undersecretary Saood Al Hosani.

“The regulations will enable us to register all these units in one system, while providing a database for all licensed vacation homes in Abu Dhabi.”

The department said the licensing system will be brought in soon, but did not provide a date. The six per cent charge is the same as the existing tourism fee on hotel stays.

At present, the short-term rental market exists in a grey area in Abu Dhabi, though regulation has been on the horizon for several years.

A quick scan of Airbnb on Saturday showed a range of short term rentals available online in Abu Dhabi, including Dh140 a night for a one-bedroom on the Corniche and Dh190 for a studio near the airport. That rose to up to Dh400 for an apartment with the promise of a sea view on Reem Island.

Short-term online lets are already regulated in Dubai - where it is estimated two per cent of all homes are listed on Airbnb - and Ras Al Khaimah.

The decision came as cities across the globe look at how to regulate short-term rentals.

Airbnb alone has been valued at more than $30 billion.

FILE PHOTO: The Airbnb logo is seen on a little mini pyramid under the glass Pyramid of the Louvre museum in Paris, France, March 12, 2019.  Picture taken March 12, 2019. REUTERS/Charles Platiau/File Photo
Airbnb has grown rapidly worldwide forcing city authorities to look at how people rent out their homes. Reuters

It has provided homeowners and tenants extra income and travellers with homely lodgings in cities across the globe, but been linked to rising rents, housing shortages and safety concerns.

Abu Dhabi's tourism department said it will manage the supply of units in Abu Dhabi to ensure fair competition and improve the experience of visitors. The new rules will be available online and a licensing portal will soon be launched.

Industry figures said the decision by the Executive Council of Abu Dhabi to regulate the market should be welcomed.

“This will open up the short-term rental market in the UAE as Abu Dhabi is growing in stature as a tourist destination,” said Shilpa Mahtani, chief operating officer of BnbME, which manages short-term rents for owners.

“Having this regulation will definitely put a check on unlicensed units, since licences will be given out only to a select few.

"Holiday home companies will fall in line and will need to follow rules because there will be standards that each apartment must come equipped with.”

Regulations will also provide an official channel for grievances, he said.

“When it is unlicensed there is no control on many issues, even safety, because who will you complain to?” she said.

“Any problems faced by guests, residents in same building or the holiday home management company itself go unaddressed in the absence of regulation.”

Dubai's short-term rental market is thriving after the government legalised Airbnb in 2016, with Emaar launching its own short-term platform last year.

Homeowners and tenants in Dubai are allowed to list their properties for rent by registering through the Dubai Tourism website to obtain a permit.

Tenants in Dubai require a no-objection letter from the landlord before being allowed to list the property.

In Abu Dhabi, interested holiday home owners can contact the tourism department's licensing section for more details at info@dctabudhabi.ae