New Abu Dhabi Tenancy Tax

So I am going to assume that you have all heard the news. Soon expat tenants in Abu Dhabi will have to pay 3 per cent extra on top of their rent. A new tenancy tax if you will. But how will it work?

The new charge will be charged in monthly instalments and added to you electricity and water (ADDC) bills. It will add about Dh5,000 to the cost of renting an average two-bedroom apartment. UAE nationals are exempt.

The decision to levy the new fee was published in February’s Official Gazette. Officially, therefore, the charge is already in operation, but it is not known when collection will begin in practice.

There have been some interesting sounds coming out of the Abu Dhabi Government. Dr Abdulla Al Bloushi, head of land and property management at the Municipality has gone on record saying “Public reaction to the new charge will be monitored closely”, “If there is a complaint from different people or sectors, they will take it into consideration”. “The job of the government is to make people happy. So if there is a complaint, and it is a valid complaint, then I think the government will take action. They will find a way of making things better.”

Some people have taken this to mean that if there is a big enough outcry then the government will back down, but given that it doesn’t affect property owners or Nationals then reaction will likely be muted.

Luckily this won’t affect the poorest sections of the workforce, those living in illegally split villas with the water and electricity bills in the owner’s name.

The levy brings Abu Dhabi in line with Dubai, which imposes a 5 per cent municipal housing tax payable on utility bills. The tax comes on top of an increase by 4% of the hotel tax and talks about new VAT imposition in 2018.

If you are tired of paying rent and want to own your own property please read our guide here.