Dubai to review housing fees after double-charge concern

DUBAI — Dubai is reviewing a municipal decision to collect housing fee from freehold property owners after they complained of “doubling up of service charges”.

The Dubai Municipality (DM) had earlier this year announced its plan to unify the system of collecting housing fee, levied for providing municipal services in the emirate, in cooperation with the Dubai Electricity and Water Authority (DEWA). As per the DM’s strategic plan, all expatriates’ housing units will be charged the fee through their monthly utility bills from DEWA.

The Dubai Executive Council has now set up a committee for reviewing the DM’s decision to collect five per cent of rental value of properties from all residential units in the emirate irrespective of their status of being leased or owned.

The Council has assigned Abdulrahman Al Saleh, Director General of the Department of Finance in Dubai, to head the committee that will look into the complaints from home owners in freehold properties who feel that they are made to pay twice since they already pay a huge amount of money as maintenance or service fee to their developers.

The municipality has set the housing fee for leased units as the five per cent of their monthly rents.

It also revised the housing fee for homeowners in freehold properties, which used to be calculated as 0.5 per cent of the total purchase value per year, to the five per cent monthly rental value of properties with similar dimensions in their areas, as estimated by the Real Estate Regulatory Agency.

Home owners, who have invested millions of dirhams to purchase their properties in Dubai’s freehold projects, have been furious about this fee calling it a duplication of service fee they are paying to developers.

An Indian homeowner in the Springs said re-examining the housing fee was a welcome move. “We are already paying service fee to our developers.

“Over and above that, we have to pay the housing fee. Now, the DEWA is also hiking its tariff and introducing surcharge. We can only hope that a favourable decision will be taken in the case of housing fee,” he said requesting anonymity.

However, Director-General of the Dubai Municipality Hussain Nasser Lootah maintained that municipality’s housing fee has no connection with the service fee being charged by developers. “They (developers) are taking service charge for maintaining your (homeowners’) houses and premises.

“The housing fee is for the municipal services we are providing for the entire emirate. We are the ones who keep the city clean, reduce the pollution here, ensure food safety, provide waste management services and recreational facilities like parks and even the burial ground for the community. That is why everyone has to pay the housing fee,” he told Khaleej Times.

He added that the fee was being charged based on a local order in effect from 1962.

sajila@khaleejtimes.com

• UAE