(MENAFN- Khaleej Times) A recently introduced municipality fee, equivalent to three per cent of every expatriate's annual rent, will have a serious impact on the cost of living, Abu Dhabi tenants told Khaleej Times.
According to the new law, which was published in the official gazette, the fee will have a retrospective effect from February 2016. Expat tenants will have to pay a single lump sum of last year's amount now. However, the fee will not apply to homeowners and UAE Nationals.
The fee is calculated as three per cent of the annual rent, and covers tenancy agreements only, with a minimum amount of Dh450. The fee, which follows the footsteps of Dubai's five per cent municipality fee, is applied across the entire emirate, including Al Ain and the Western Region.
"Accumulated fees for the last year are being added to Abu Dhabi Water and Electricity Authority (Adwea) bills as a lump sum. Applicable fees in the future shall be added to Adwea monthly bills starting from January 2017," the Department of Municipal Affairs and Transport (DMAT) said.
"The department stresses the importance of paying registration fees for tenancy contracts to avoid legal consequences and the disconnection of water and electricity services."
M.M., a US expat, said the newly introduced fee will see a rising hike in his water and electricity bills. However, what concerns him most is the lump sum payment, which has to be paid this month.
"I was unaware that the bill is backdated from February last year in addition to the monthly charge. The bulk payment will now mean that I will be living on a tighter budget this month," he added.
Another US expat M.H, said the lump sum payment would have an impact on his savings.
"I did not receive any warning about the fee. This now means that I will need to use some of my savings to pay the lump sum fee."
"But shouldn't it be the homeowners responsible for this service fee," he asked.
Z.A, who has been living in Abu Dhabi for almost 15 years, said water and electricity bills have already seen a rise from last year, which means that the imposed fee could be a burden on her family.
"What concerns my family is the lump sum payment. It would be helpful for residents to pay the fee in installments so they wouldn't have to worry about living on a tight budget for the rest of the month."
J.M. from Lebanon said he believed the five per cent rental cap, which was reinstated recently, would ease the cost of living. However, the new service fee will yet again impact one's spending capacity.
"With the rise of household costs, the new fee will make the living conditions tougher on many expats."
"My salary is tight, yet rental and living costs are increasing. I now have to reevaluate my spending capacity for every month."
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