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29 March 2024

Housing fee in freehold areas put under review

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By Staff

Dubai Executive Council has formed a committee headed by Abdulrahman Al Saleh, Director General of the Department of Finance, to review the housing fee.

The municipality recently announced  that it will collect about 5 per cent of the lease, or an equivalent, as housing fee from freehold owners in Dubai, said Emarat Al Youm quoting a confidential source.

There have been complaints of duplication of fees as some residents pay fees for the same service at two locations. Fees also depend on the size of property, some say.

Real estate companies receive public services fees regulated by law No (27) 2007 on the joint ownership of real estate in Dubai, and those companies must get approval from the Land Department in Dubai regarding the value of the fee imposed on property owners.

Ahmad Al Matroushi, Managing Director, Emaar, Head of Dubai Real Estate, said: "Real estate companies were surprised by municipality's decision to collect 5 per cent of the value of the lease contract [as fees]. They get the service charges for the same services provided by the developer," he added.  "It is not logical to get a fee for municipal services.

"In case the municipality wanted to impose housing fees for services in freehold areas, the developers should not be taking fees there," he added.

Taha Mohammed, Chief Executive Officer of Tiger Real Estate Development, said: "The municipality action will affect the demand for real estate and keep away investors."

Sajida Fadhil, one of the residents in an Emaar project, said: "We pay high annual fees for the services provided by a real estate company - about Dh55,000 a year for 3,007 square feet area."

Hussein Lootah, Director-General of Dubai Municipality, said: "The fees imposed by the municipality is according to and under the law of returns of the Municipality 1962."

Lootah added the Municipality is not concerned with the fees imposed by developers in some areas. The fees is imposed in consent with Rera and included in contracts of sale.

Arif Abdul Rahman, Head of Financial Department, Dubai Municipality, said: "Developers should inform residents of the fees collected by municipality. Again the services provided to residents are not justifiable to the fees the developers take."

He said Dubai Municipality has dedicated telephone lines since the past six months to receive complaints regarding housing fees.