The Dubai Municipality notice to one of the residents.

Head of Marketing and Housing Fees Unit in the DM’s Finance Department, Abdulla Hashim AbdulGhafoor, told Khaleej Times on Tuesday that residents who ignored online registration were now being billed the fee as per RERA rental index. “The process of registration is going on. We have started billing the five per cent [of rent] to those who have registered. Whoever has not registered after receiving the notice is getting billed as per the RERA index,” he said.

Tenants charged this way are likely to end up paying more as the latest RERA index issued earlier this year does not always reflect the actual rents being paid by tenants due to the dip in rents following the impact of recession in the real estate sector.

For example, a person paying Dhs42, 000 rent for a two-bedroom apartment in Al Muhaisnha area will have to pay a housing fee based on the Dhs50,000 to Dhs60,000 index. Similarly, a tenant currently paying Dhs70, 000 in the Greens will be billed according to the Dhs90,000-Dhs120,000 rental index.

However, the municipality is currently being flexible and is still allowing those being charged according to rental index to register their accommodation details online. “But, they cannot expect the fee to be changed in their next bill. It will take some time as the entire system [in DM and DEWA] has to accept the changes. It may take one, two or even three months,” AbdulGhafoor said.

The official reiterated that residents should not consider the housing fee as a new tax. “As we had said earlier, this is not a new fee. The decree for this has been in existence since 1962. It is just that we have found the proper tool for collecting it only recently. As we had announced, our plan is to cover the entire emirate by January 2011. So, we are still encouraging people to register their accommodation details,” he said.

The municipality is also encouraging home owners of free hold properties to register their home details. Their housing fee, which used to be calculated as 0.5 per cent of the total purchase value, was revised to the five per cent of the RERA rental index of their areas after the municipality considered the fact that property prices have dropped due to recession.

The municipality is also encouraging home owners of freehold properties to register their home details. Their housing fee, which used to be calculated as 0.5 per cent of the total purchase value, was revised to the five per cent of rental value of properties with similar dimensions in their areas, as estimated by the RERA. This was after considering the fall in property prices due to the downturn. — sajila@khaleejtimes.com

http://www.khaleejtimes.com/DisplayArticle09.asp?xfile=data/theuae/2010/October/theuae_October521.xml&section=theuae