Housing fee through Dewa

The move, first reported by KT in September earlier this year, is aimed at streamlining the payment of the housing fee, which a sizeable number of residents are able to dodge due to the absence of a foolproof system. The housing fee is five per cent of the total value of a tenancy contract.

According to experts in the real estate sector, most tenants do not get their lease registered with the municipality, as a result of which they are able to evade the payment of housing fees. This evasion of fee payment has been causing the civic body to lose out on a considerable revenue.

The representative of a private real estate agency said that the municipality’s move to make the housing fee a part of Dewa bills is primarily aimed at plugging the loophole in the system.

“Because tenants can get away with not registering their contracts with the department, the civic body at present has no data or record on who occupies a particular housing unit, and there is no way to ensure that the fee is paid,” he said.

The implementation of the housing fee payment through Dewa bills is a good move in terms of ensuring payment, but many fear that it will contribute to a further hike in the ever-increasing real estate rents in the emirate. Real estate agents are of the opinion that since landlords are not the direct target of the housing fee, it would be good if the municipality allowed tenants to pay the fee in two or three instalments. “The rents are considerably higher in Dubai as compared to most other emirates, and as a result the housing fee, which is a percentage of the contract value, is not a small amount. I would like to think the municipality, while making sure that the fee is paid, will facilitate the payment by breaking it up into two or three parts,” said a real estate agent.

The municipality will implement the new system beginning January, according to the source. Under the existing system, the tenant is required to fill the housing fee payment form, attach a copy of the lease and other required documents, and submit the same for processing at specified counters of the Customer Service Centre at the municipality’s main building. Once the new system is implemented, housing fee will be part of the electricity and water bill, ensuring a simplified procedure for tenants and an ensured payment for the civic authority.

Officials at the municipality’s Finance Department or the General Revenue Section were not available for comment on the issue.