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Everything you need to know is included in our Oman Property Pack
Oman is an attractive destination for foreign investors looking to buy property. It offers stunning scenery, a rich cultural history, and friendly locals.
However, the process of buying property in a foreign country can be complex due to the various laws and regulations involved.
Don't worry! This guide is here to make it easy for foreign buyers to understand how the property market works in Oman. We'll cover all the essential information in an easy-to-understand way.
Also, for a more in-depth analysis, you can check our property pack for Oman.Can you purchase and own a property in Oman as a foreigner?
Foreign nationals can purchase and own real estate in Oman.
They can do this in special places called Integrated Tourism Complexes (ITCs) and some commercial buildings that the Ministry of Housing has approved.
ITCs are zoned areas that permit foreign nationals to own property on a freehold basis (= the owner has full ownership rights). Some of the existing and upcoming ITC projects in Oman include Al Mouj Muscat, Shangri-La’s Barr Al Jissah Resort and Spa, Muscat Hills, Saraya Bandar Jissah, and Salalah Beach Resort.
Foreigners are allowed to buy and own 100% of the land for both residential and commercial purposes in these ITCs. They have four years to build on the land they purchase, but this time can be extended by the Ministry of Housing and Urban Planning if necessary. If a buyer doesn't use the land within the four-year limit, the Ministry can auction and sell the land. So, this rule encourages buyers to act quickly and benefits the ITCs in the long run.
It's worth noting that expats cannot acquire property in certain restricted areas, such as Musandam, Buraimi, Dhahirah, Wusta Liwa, Shinas Masirah, Jabal Akhdar, Jabal Shams, and areas near military facilities, archaeological, historic structures, and designated agricultural land.
New usufruct rights
In 2020, Oman introduced a new policy that allows non-Omanis (expatriates) to acquire usufruct rights for certain properties, primarily in and around Muscat.
Usufruct rights are similar to leasehold rights and grant the right to use and earn income from a property for a limited time.
Expatriates aged 23 or older who have lived in Oman for at least 2 years can apply for these usufruct rights. They can use the property personally or jointly with their immediate family for at least 4 years before leasing or selling it.
There are some requirements.
Buyers may not purchase more than one unit under this scheme.
Properties must be in multi-storey buildings (4+ floors) within specified locations licensed by the Ministry of Housing and Urban Planning (MHUP).
Also, up to 40% of units in a building can be bought by expatriates, with no more than 20% of that from one nationality.
Regarding the financial aspects, there's a minimum purchase price of OMR 45,000 for Muscat Governorate and OMR 35,000 for other Governorates.
Usufruct rights can be extended up to 99 years, and they can be sold or passed on to legal heirs.
The scheme aims to diversify Oman's economy and attract long-term investment. It aligns Oman with its neighbors in terms of property ownership rights.
Previously, expatriates could only own property in designated Integrated Tourism Complexes (ITC) in Oman (mentioned above).
Can you become resident in Oman by investing in real estate?
Yes, you can become a resident in Oman by buying property.
By making a real estate investment in an ITC in Oman, you and your family are entitled to residency in Oman, renewable, as long as you own the property.
However, there are certain conditions that must be met, such as having a valid passport and proof of sufficient funds to cover living expenses.
Also, the minimum amount required for obtaining residency through real estate investment is 50,000 Omani riyals (approximately 130,000 USD).
For a five-year visa, you need to invest a minimum of 250,000 Omani riyals (approximately 650,000 USD) in a property.
What does the real estate market looks like in Oman?
Market indicators
You can find fresh and updated data in our pack of documents related to the real estate market in Oman.
Based on the the the GDP per capita indicator, it is apparent that Omani people have become 3.3% richer throughout the past 5 years.
As people's wealth increases, their interest in real estate also grows, and that can make prices increase down the road.
If we check the data displayed on Numbeo, we see that residential real estate in Oman offer gross rental yields between 5.6% and 8.3%.
These strong rental yields not only provide attractive financial returns but also offer a reliable and sustainable investment opportunity for foreign investors.
To know more, you can also read our dedicated article: is it a good time to buy a property in Oman?
The expat life
The life of an expat in Oman is an exciting and unique experience. Oman is a beautiful country, with a rich culture, stunning landscapes, and a variety of activities to explore. Expats in Oman can find a variety of job opportunities, from corporate positions to teaching and hospitality.
The cost of living in Oman is relatively low, and expats can find affordable housing in cities such as Muscat and Sohar. Expats can also enjoy a variety of leisure activities, from shopping in traditional souks to exploring the beaches and mountains. Oman has a strong focus on family and community, making it a great place to meet new people and make lifelong friendships.
Expats in Oman also have the opportunity to explore the country's rich history and culture. From visiting ancient forts to exploring vibrant markets, there are plenty of opportunities to learn and experience the country's unique past. Expats also have the chance to participate in traditional festivals and celebrations, such as the annual Muscat Festival and the Sultan Qaboos Grand Mosque.
Overall, Oman is a great place for expats to live and work, with a supportive and friendly local community. With its beautiful landscapes, vibrant culture, and a range of job opportunities, Oman is an ideal destination for expats looking for an exciting and rewarding experience.
What are the best places to invest in real estate in Oman?
This table summarizes some of the best places to buy a property in Oman.
| City / Region | Population | Average Price per sqm (OMR) | Strengths |
|---|---|---|---|
| Muscat | ≈ 1.5 million | 500 - 1,000 | National capital, economic hub, cultural heritage |
| Salalah | ≈ 250,000 | 300 - 700 | Tropical climate, stunning beaches, frankincense trade |
| Sohar | ≈ 200,000 | 200 - 500 | Industrial city, port, historical sites |
| Nizwa | ≈ 80,000 | 300 - 600 | Historic city, traditional souks, ancient forts |
| Sur | ≈ 70,000 | 200 - 500 | Coastal town, dhow building, turtle nesting sites |
| Khasab | ≈ 20,000 | 300 - 700 | Musandam Peninsula, fjords, diving, scenic beauty |
| Al Buraimi | ≈ 75,000 | 200 - 500 | Border town, agriculture, traditional markets |
Do you need a lawyer to buy real estate in Oman?
When purchasing a property in Oman, engaging a local lawyer can be crucial in navigating the legal requirements and ensuring a successful transaction.
One important document they can assist with is the Purchase Agreement (Akad al-Shei), a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Omani lawyer can also help with conducting a Property Title Search to verify the property's ownership status and identify any potential legal issues or encumbrances.
Furthermore, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Ministry of Housing or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Registration Fees, are paid correctly and in compliance with Omani laws and regulations.
What are the risks when purchasing a property in Oman?
We've got an article dedicated to the risks associated with purchasing property in Oman.
When buying a property in Oman, the main risk to consider is that foreign buyers are not allowed to own land in the country.
This means that any property purchased must be leased from the government, and the lease is subject to renewal every 10 years.
Additionally, the laws of Oman do not allow foreign buyers to obtain mortgages to finance the purchase of a property.
Another risk to consider is that Oman does not have a specific real estate law that sets out the rights and obligations of buyers and sellers. As such, it is important to ensure that all legal documents are carefully reviewed and that any potential risks are identified and addressed.
Finally, the Omani government imposes certain restrictions on foreign ownership of commercial and residential properties. These restrictions can vary depending on the type of property being purchased, and therefore it is important to ensure that any potential purchase complies with all applicable laws and regulations.
Everything you need to know is included in our Oman Property Pack
What are the documents needed for a real estate transaction in Oman?
When buying a property in Oman, the documents needed vary depending on the type of property being purchased. Generally, the following documents are required:
1. A valid purchase agreement between the buyer and the seller, signed and notarized by a notary public.
2. A valid title deed/deed of sale issued by the appropriate government body.
3. A valid registration form with the Ministry of Housing.
4. A valid certificate of residence from the Ministry of Interior.
5. A valid Omani ID or passport.
6. A valid bank statement.
7. A valid survey/site plan of the property.
8. A valid permit from the Ministry of Environment and Water.
9. A valid building permit or zoning certificate from the municipality.
10. A valid certificate of ownership from the Ministry of Economy.
We review each of these documents and tell you how to use them in our property pack for Oman.
What are the tips for negotiating with Omani people effectively?
When negotiating with individuals from Omani culture, it's essential to consider specific aspects of their cultural context to ensure successful outcomes.
Oman is renowned for its emphasis on hospitality and the value it places on building personal relationships. Therefore, investing time in fostering a positive connection and engaging in polite conversation can lay a solid foundation for fruitful negotiations.
Respect for hierarchy and authority holds great importance in Omani culture. Show acknowledgment and deference to individuals in positions of authority, use appropriate titles, and demonstrate respect for seniority. These actions can have a positive impact on the negotiation process.
Punctuality is generally appreciated in Oman. While there might be some flexibility in meeting start times, arriving on time demonstrates professionalism and respect for the other party's schedule, leaving a positive impression and fostering a conducive negotiation environment.
Non-verbal communication plays a significant role in Omani culture. Pay attention to body language, maintain eye contact, and use appropriate gestures. These practices can enhance communication and help establish rapport with your Omani counterparts.
Decision-making in Oman often involves a consultative process, and you may already be aware of that. Patience, allowing for discussions, and showing respect for differing opinions contribute to successful negotiations. It's important to have a willingness to find common ground and reach mutually beneficial agreements.
Lastly, cultural sensitivity is key during negotiations in Oman. Familiarize yourself with Omani customs, traditions, and social norms, such as local greetings or traditional hospitality practices. Demonstrating respect for their cultural heritage builds trust and facilitates a positive negotiation atmosphere.
Do banks offer loans to foreigners in Oman?
Foreigners can get property loans in Oman, but the eligibility criteria and requirements vary depending on the lender and loan terms.
If you're a foreigner looking to get a property loan in Oman, you'll typically need a valid residence permit, evidence of income or employment, and meet the specific requirements of the lenders.
Bank Muscat, National Bank of Oman (NBO), and Bank Dhofar are among the Omani banks that have the potential to offer mortgages to non-resident individuals.
Moreover, mortgage rates in Oman for a 20-year term range from 3% to 7%, which are remarkably good.
What are the taxes related to a property transaction in Oman?
Here is a breakdown of taxes related to a property transaction in Oman.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Stamp Duty | Tax on various legal and administrative documents | Around 3% of the property value | Buyer |
| Rental Income Tax | Tax on rental income generated from the property | 3% on the gross rental income | Owner |
What fees are involved in a property transaction in Oman?
Below is a simple breakdown of fees for a property transaction in Oman.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Real Estate Agent Fee | Fee paid to the real estate agent involved in the transaction | Typically 5% of the sale price of the property | Seller |
| Property Registration Fee | Fee for registering the property with the Ministry of Housing | Around 3% of the purchase price of the property | Buyer |
| Title Deed Fee | Fee for issuing the property title deed | A fixed fee of OMR 112 | Buyer |
| Legal Fee | Fees for legal representation and documentation | Around 1% to 2% of the property value | Buyer |
| Municipality Fee | Fee imposed by the local municipality | Varies based on the property's location and size | Buyer |
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