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Abu Dhabi implements 3% housing charge

by Jumana Abdel-Razzaq on Jan 4, 2017

Abu Dhabi, UAE.
Abu Dhabi, UAE.

Abu Dhabi municipality has introduced a 3% charge on households which will be backdated to February 2016.

The fee became law last year after its publication in the Official Gazette. However, the backdating now means that tenants will have to pay this year’s fees in addition to the last 11 months, according to a report by The National.

The portion of the fee from last year will also be payable as a single lump sum, rather than monthly.

Hitesh Raigaga, a senior analyst at the property agents Chestertons said: "With the tough market conditions and rising household costs, this will be an added pressure on every tenant, as it needs to be factored in by every household.”

"Increased costs and tighter wage increases mean households will have comparatively lower spending capacity."

The fee has already begun appearing in water and electricity bills from Abu Dhabi Distribution Company.

The Abu Dhabi property market is currently facing a downturn that is expected well into the end of 2017, with prices for both villas and apartments continuing to fall, according to a report by Cluttons last year.

Rents have fallen 9.4% across Abu Dhabi's residential investment areas from the beginning of 2016 as declines outpaced a fall of about 5.2% in the value of homes over the same period.

In December, Abu Dhabi reportedly reintroduced a 5% cap on annual rent hikes after a gap of three years as a way to protect tenants from unfair price hikes.