Abu Dhabi homeowners told to alter value of homes to avoid municipality fee

ABU DHABI // Homeowners have been advised to alter the value of their property on an official document to avoid being billed for Abu Dhabi’s new municipality fee, which should be charged only to tenants.

The extraordinary advice came from Abu Dhabi Distribution Company, the utilities provider that collects the fee on behalf of the municipality by adding it to tenants’ power and water bills.

The fee – 3 per cent of a property’s annual rent, payable monthly – has been beset by problems since its introduction in January.

All expatriate tenants are required to pay it. Only Emiratis and homeowners are exempt.

But the municipality’s Tawtheeq property registration system is apparently unable to distinguish between owners and tenants. It assumes that a property’s total value as recorded on a Tawtheeq certificate is the annual rent, and homeowners are therefore being wrongly billed.

The utilities company has now advised homeowners to change that figure to a nominal amount, such as Dh1, to avoid the fee.

“Lots of people have approached us and thought that we made a mistake,” a company spokesman said.

“People came with lots of arguments and half of them were legitimate. I’d say to owners, go and fix this issue with your developer, the people you signed the contract with, and then the municipality.

“You can go and make another contract. If they produce a document that states their property is worth Dh1, they would be charged accordingly – Dh450, which is the minimum municipality charge.”

Problems have also arisen because the charge was backdated to February last year, and many people have been billed a lump sum to cover 10 months of 2016, with threats of having their power disconnected if they fail to pay.

One tenant, a doctor in Abu Dhabi city, was billed for thousands of dirhams for a contract that began in April 2015 – before the tax was even announced.

And the owner of a villa in Al Reef, near Abu Dhabi airport, said: “I was billed over Dh60,000 but I didn’t pay it as we are not supposed to.

“Since January I have been getting text messages and reminders for bill payments, so I am afraid my power will be disconnected some day.”

The utilities company now says that although it is sending payment reminders, it will not shut off anyone’s power while the housing tax confusion continues.

“We have not carried out any disconnections yet and this is to help people to understand and digest the charges, and set a clear path for payments,” the company spokesman said.

“We understand that there was an implementation delay for six months, so we will give people time.”

It is also against the law to cut off power in the summer months, he said.

Any dispute about the bill must be taken to the municipality, the spokesman said. “We are only the collecting agency. The only people who can waive or reconsider these charges or make exemptions are Abu Dhabi Municipality.

“Things are not under our control, we only take the information the municipality gives us.”

The municipality blamed the problem on a “data update project”. It said its rental contract authentication department was working with the company in charge of the update to ensure that the value of a property was not considered when calculating the fee, and to modify the rental value so that customers’ bills were correct.