Dubai Municipality Housing Fee: Everything You Need to Know

Living in Dubai is not cheap, and one of the things that confuses many residents is the Dubai Municipality Housing Fee. Have you ever actually looked at your DEWA bill, only to notice an extra line and not really know what that extra line is supposed to be? Actually, it is probably that.

The housing service charge offered to renters and owners is used to fund shared services throughout the city. This might seem like an additional cost, yet it is an essential component of maintaining the work of the infrastructure and other services provided in Dubai. Not knowing what it is, and how it is calculated, can be confusing-- and could hamper the efforts of households to make the best out of their family budgets.

What is the Dubai Municipality Housing Fee?

Dubai Municipality Housing Fee is a mandatory fee charged to residents, tenants, and homeowners to cover municipal services in the city. It comes in an independent line on the DEWA (Dubai Electricity and Water Authority) bill and is computed according to the rental value of your house.

• To tenants: It is charged at 5 per cent of the annual rent indicated in the tenancy contract.
• To homeowners: It is 5 per cent of the yearly rental value of the property, as measured by the Dubai Real Estate Regulatory Authority (RERA).

This is then split up into 12 monthly payments and charged straight to your DEWA bill.

Example:

• Assuming that you pay AED100,000/year in rent, Housing Fee = AED 5,000.
• AED 416.67 (5,000 / 12) will be included in the monthly DEWA bill.

The revenue collected by this fee helps in funding important urban activities like garbage collection, infrastructural repairs and government buildings.

How is the Rental Value Determined for Owners?

For property owners who are residents in their own properties, the Dubai Municipality Housing Fee is not calculated on the basis of the actual rent agreement. Instead, the Dubai Real Estate Regulatory Authority (RERA) gives all properties a "rental value". This value is calculated using the official RERA Rental Index, which considers the following factors:

• Type of property (apartment or villa)
• Location
• Size (bedrooms, built-up area)
• Current market trends

This estimated rental value is then used to calculate the house price based on 5% of that figure, whether or not it is what the owner believes their house is worth. If you feel the assigned value is not correct, you can make a request to change or challenge it using RERA.

Who is responsible for paying the housing fee?

As we stated earlier, the Dubai housing fee is paid by expats residing in the city. This means, if you are a non-UAE National who is based in Dubai, then you will pay the Dubai Housing Fee.

If the property is being rented, the tenant will have the responsibility of paying the municipality fee. However, if the property is empty or occupied by the owner, then the owner will have to pay the fees.

Exemptions from the Dubai housing fee

Not every person in Dubai has to pay the Municipality Housing Fee. The principal exception is for:

• UAE Nationals: Emirati citizens who are staying in their own property are completely exempt from this fee.
• For expatriates (either renting or buying a property), the housing cost is compulsory and is added automatically to the DEWA bill. Otherwise, there are no exemptions for tenants or homeowners.

It is also important to note that short-term accommodation in hotels or serviced apartments does not include the accommodation fee - these are subject to different tourist-related charges.

Where and how is it paid?

You don't have to pay separately for the Dubai Municipality Housing Fee. It is automatically charged on your DEWA (Dubai Electricity and Water Authority) bill on a monthly basis. The total amount is divided into 12 equal payments, so you pay a small amount on top of your electricity and water bills.

You can easily check whether you are paying or not via your DEWA account or even in your monthly bill. Such automation means the fee is charged in the absence of any extra admin or reminders.

How to adjust the housing fee in Dubai?

If you want to change the amount of your housing fee in Dubai. For example, perhaps you are a homeowner and you feel that you are being overcharged in relation to what the rent should be, or perhaps you are a tenant and the rent has been reduced by the landlord.

In that case, you will need to update your place of residence with Dubai Municipality, which will take your situation into account. You can do the following while paying the municipality fee:

• Visit the official website of Dubai Municipality and click on the 'Services' tab.
• Under Individual Services, click on Dubai Municipality Fees and then click Apply to Amend Dubai Municipality Residential Fees.
• Complete the required information and attach the required documents.
• Once you provide the necessary information, you will get an e-receipt.
• Your new information will be updated within the Dubai Municipality within 3 working days. If you have paid extra towards the Housing Fee, you will get a refund in the form of DEWA Credit.

Why Does Dubai Charge a Housing Fee?

The Dubai Municipality Housing Fee is not just another bill-it serves a purpose. The collected funds are used directly for the provision of essential municipal services for the functioning of the city. This includes:

• Maintain Public facilities: The roads, parks, bridges, and other recreational facilities used by the community should be maintained in a consistent manner.
• Solid Waste Management: Encouraging efficient waste management systems and encouraging landfill-friendly disposal methods that help keep our community clean and healthy.
• City Safety and Lighting: light safety/lighting, occupancy readiness, and visitor readiness.
• Good living conditions: The neighbourhood is safe, facilities and open space are well maintained.
• Strategic Investment: The capital is reinvested in programmes with strategic significance for Dubai’s future growth, like smart cities and sustainable urban development.
• Improved International Image: The perfect city management gives the UAE its charm as one of the most preferred destinations by expats and travelers worldwide.

In conclusion, the charge plays a significant role in ensuring the cleanliness, orderliness, and well-being of Dubai for everyone to enjoy. On the other hand, the system could be arranged in such a way as to link the contribution to the value of rent of the owner's commercial-estate property, thus ensuring that the contribution is distributed more equitably and in proportion to the type of accommodation in which the residents live.

Closing In!

Learning about the Dubai Municipality Housing Fee can make your life very simple when paying your DEWA bill. Whether you're a tenant or a property owner, this 5% charge contributes directly to the overall cleanliness, efficiency, and service standards of Dubai.

From removing garbage to maintaining the parks, the fee will cover the basics required to keep the city livable. Well, it might seem like just another bill, but for all the benefits that residents have every day, the cost is well spent. Always verify your DEWA bill for accuracy and make sure tenancy information is current so that you don't get any undesired surprises. Think of it as your contribution to the world-class living standards of Dubai.