Published on and written by Cyril Jarnias
The Sultanate’s real estate market is increasingly attracting investors, expatriates, and entrepreneurs. But behind the beachfront villas, tourist complexes, and new planned neighborhoods lies a highly structured legal framework, where every type of buyer, lease, or construction project follows specific rules. Ignoring these rules can be costly: fines, inability to register a property, or even outright loss of occupancy rights.
This article provides a comprehensive and accessible overview of the main real estate laws and regulations in force in Oman. It is based on official texts, sultanic decrees, and incorporates the most recent reforms to inform you accurately.
A Legal Framework Dominated by the State and Governed by Multiple Decrees
The starting point of Omani land law is simple: as a rule, all land belongs to the State, except for land that has been legally transferred to individuals or companies. This principle is established by the Land Law (Decree 5/80), which forms the backbone of the system.
This general framework is supplemented by a mosaic of texts: the Land Registration Law, the law on usufruct, the law on integrated tourism complexes, the law on foreign ownership in certain areas, the Tenancy Law for leases, and, more recently, a major real estate regulation law that overhauls a significant part of the system.
The Ministry of Housing and Urban Planning (MOHUP) is the central authority for the real estate register, property titles, transfers, and the supervision of actors and major projects. Municipalities, especially Muscat Municipality, are responsible for building permits, short-term leases, and enforcement of local regulations.
The Main Texts Structuring Real Estate Ownership
Several decrees and laws form the “toolkit” you need to understand what is possible – or prohibited – regarding property ownership:
| Text / Decree | Main Purpose | Real Estate Impact |
|---|---|---|
| Decree 5/80 (Land Law) | Land ownership, principle of state ownership | Defines who can become an owner and how |
| Decree 2/98 (Land Register Law) | Real estate registration system | Organizes the recording of rights, transfers, mortgages |
| Decree 5/81 (Usufruct Law) | Long-term usufruct rights | Key tool for foreigners and investment projects |
| Decree 12/06 (ITC Law) | Foreign ownership in Integrated Tourism Complexes | Authorizes acquisition by non‑GCC nationals in designated areas |
| Decree 29/2018 | Prohibition of non‑Omani ownership in certain areas | List of strategic zones closed to foreigners |
| Decree 6/89 (Tenancy Law, amended) | Residential, commercial, industrial leases | Framework for rents, renewals, eviction |
| Decree 79/2025 (Real Estate Regulation Law) | Comprehensive regulation of the real estate sector | Major reform of promotion, brokerage, and co-ownership rules |
These texts are complemented by the Civil Code (Decree 29/2013), which governs contracts, liability, construction contracts, and the decennial liability of engineers and contractors, as well as the Arbitration Law (Decree 47/1997), often used in case of disputes in major projects.
Who Can Own What? Property Rights by Status
The first question any investor asks is very concrete: am I allowed to own this property and under what form? In Oman, the answer depends on both nationality, the entity type (individual or company), and the property’s location.
Omani Nationals: Full Ownership, But Regulated
Omani citizens enjoy full ownership rights (freehold) and leasehold throughout the country, subject to special laws (protected areas, expropriation for public utility). Most Omani real estate wealth has been built through inheritance, with the 1980 Land Law providing for the transfer of certain state lands to private individuals.
The real estate register maintained by the ministry records all properties, transfers (sale, gift, inheritance), real rights (usufruct), and mortgages. The title issued, the Mulkhiya, is proof of ownership.
The State retains the power of expropriation for public utility, by sultanic decree, with compensation to the owner (Decree 64/78).
Omani and Gulf Companies: Possible Ownership, But Tied to Purpose
Wholly Omani companies and public joint-stock companies (SAOG) with a minimum Omani shareholding (often 30 to 51% depending on the case) may hold properties for their operational needs: offices, staff housing, warehouses, factories. A ministerial decision (MD 43/98) clearly limits this ownership to operational use, not widespread land speculation, except for duly authorized land development companies.
Nationals and companies from the Gulf Cooperation Council (GCC) states enjoy the same rights as Omanis to acquire real estate, under Decree 21/04. However, certain geographical areas, such as the Al Batinah coastline or the Jabal Akhdar massif, are off-limits for purchase. Furthermore, the acquisition of vacant land is subject to a development obligation within four years, failing which the State may intervene.
Non-GCC Foreigners: Targeted Rights, Primarily via ITCs and Usufruct
For non-GCC nationals, the principle is prohibition of direct land ownership outside certain schemes. Two main entry points exist:
There are two main real estate acquisition regimes for foreigners in Thailand: ownership in Integrated Tourism Complexes and long-term usufruct under conditions.
ITCs are designated government zones, mixing residential, tourism, and commercial uses, where foreigners can acquire homes, and sometimes commercial premises, with rights very close to freehold. Decree 12/06 is the legal basis. Among the best-known ITCs are Al Mouj, Muscat Bay, Muscat Hills, Jebel Sifah, Saraya Bandar Jissah, Hawana Salalah, and emerging projects like Yiti.
Outside ITCs, Decree 29/2018 locked down numerous sensitive areas (strategic mountains, islands, border districts, areas near palaces or military installations, agricultural land) to any foreign ownership, including for non‑Omanis who already owned property, who had to transfer their assets to Omanis within two years of the decree.
To adapt to market needs without fully opening up land ownership, the government has extensively developed the usufruct tool.
Usufruct: The Key Access for Foreigners Outside ITCs
Usufruct, governed by Decree 5/81 and its implementing regulations, is a real right granting its holder the enjoyment of the property, the ability to collect its income, lease it, transfer it, and mortgage it, for a fixed term. Upon expiration, the land and buildings revert to the original owner (often the State), with possible compensation for improvements.
In practice, for a foreign investor, usufruct is the tool closest to full ownership, especially when the duration approaches a century.
The Classic Usufruct Regime
Traditionally, usufruct was granted for an initial maximum term of 50 years, renewable. Companies could obtain this right on industrial, commercial, or tourism land to develop their projects, securing their long-term investments while leaving bare ownership with the State.
The Foreign Capital Investment Law (Decree 50/2019) provides that foreign investment projects can be backed by usufruct rights on designated land in each governorate. In some cases, these projects may be 100% owned by foreign capital.
The 2020 Opening for Resident Expatriates
A major development occurred with Resolution 357/2020 of the MOHUP. It authorizes, in the form of usufruct rights, the purchase by foreigners of homes in mixed-use buildings (4 floors or more) located outside ITCs, for personal residence purposes. This measure pursues two objectives: offering an affordable alternative to tourist complexes and revitalizing the urban market.
This real estate regime imposes strict conditions regarding three main aspects: the buyer’s profile, the characteristics of the purchased property, and the ownership structure within the building.
| Condition | Main Requirement |
|---|---|
| Buyer’s Profile | At least 23 years old and resided in Oman for at least 2 years |
| Building Type | Building with at least 4 floors, mixed-use or residential, in an approved area |
| Minimum Price | 45,000 OMR in Muscat Governorate, 35,000 OMR in other governorates |
| Number of Properties | Only one home per foreign buyer |
| Cap per Building | Maximum 40% of units owned by expatriates, with no more than 20% by any single nationality |
| Usufruct Duration | 50 years renewable up to 99 years |
| Transmission | Right transmissible to heirs, with possibility of renewal |
| Resale / Rental | Resale or rental possible after 4 years of ownership |
This mechanism allows a fully non-Omani expatriate to secure their primary residence in a major city, without going through an ITC, while maintaining close state control over the ownership structure.
Integrated Tourism Complexes: Showcase Open to Foreign Capital
Integrated Tourism Complexes hold a special place in the country’s real estate law: they are the only zones where a non-GCC foreigner can acquire a residential property in full ownership (or a nearly equivalent “absolute title”), with very extensive rights regarding resale, rental, and transmission.
These complexes are created by government decision, and each project is backed by an agreement between the State and a developer, who receives a global usufruct right over the land. As development progresses, the developer sells units (apartments, villas, townhouses) to end buyers, Omani or foreign.
The legal framework for ITCs notably provides for:
– the obligation to combine tourist accommodation, residential, and commercial uses;
– a development obligation within a timeframe (four years for vacant plots), failing which the ministry may repossess or auction the land;
– the possibility, for the buyer, to obtain an “absolute title” upon payment of an improvement fee to the authorities;
– specific rules in the event of the foreign buyer’s death, particularly sensitive regarding inheritance.
Inheritance and ITCs: A Special Case
Unlike ordinary properties, inheritance of a property within an ITC by a foreigner is not automatic, even when a will provides for it. The law requires approaching the Ministry of Tourism and the Ministry of Foreign Affairs to validate the transfer of the property to the heirs.
In some cases, the law authorizes the transfer of ownership to the ITC management company and the Ministry of Finance if conditions are not met. Any contractual clause or testamentary provision to the contrary is deemed null and void.
This specificity illustrates a constant: in these open zones, the State retains firm control to prevent the formation of uncontrolled foreign property pockets over the long term.
Areas Forbidden and Restricted to Foreigners
Decree 29/2018 marked a turning point by listing, in detail, the regions and types of land closed to non‑Omani ownership: entire governorates (Musandam, Buraimi, Al Dhahirah, Al Wusta, most of Dhofar outside Salalah), districts like Liwa, Shinas, or Masirah, mountain ranges (Jabal Akhdar, Jabal Shams), islands, areas near palaces, military installations or archaeological sites, as well as agricultural land.
Foreign owners in the affected areas are required to transfer their property to an Omani national within two years. After this deadline, they face penalties, including forced sales, for non-compliance.
For a foreign investor, rigorous due diligence on the legal location of the plot is therefore not a luxury but a necessity.
Register, Pay, Secure: The Mechanics of Transactions
In Oman, a property transfer does not truly exist until it is recorded in the land register. The Mulkhiya is only issued after registration, and any willful omission or delay can be severely penalized.
Transfer Fees and Ancillary Costs
The direct and indirect costs associated with a real estate transaction are significant and must be factored into the financing plan from the outset.
| Type of Cost | Amount / Indicative Rate | Remarks |
|---|---|---|
| Transfer / Registration Fee | 3% of price for foreigners (1% for Omanis since 2025) | Paid to MOHUP, akin to stamp duty |
| Usufruct Registration (outside ITC) | 5% of value | For certain foreign usufruct rights |
| Property Title Fee | 10 to 100 OMR | Depending on property value |
| Real Estate Agent Commission | 2–3% of price, often borne by seller | Varies by project (new / resale) |
| Legal Fees | 0.25–2% of price or flat fee (200–400 OMR) | For title verification, contract drafting |
| Translation and Legalization Fees | 15–50 OMR per document | Sworn translation into Arabic, consular legalization if needed |
| Mortgage Fees (Bank) | 0.5–1% of loan amount + 50–150 OMR appraisal | + 40–100 OMR for mortgage registration |
| NOC Fees (No-Objection Certificates) | 100–1000 OMR depending on type | Sometimes required by authorities or developers |
In practice, a foreign buyer who takes out a mortgage should expect total transaction costs between 6% and 9% of the property price. An outright cash purchase, without intermediaries or financing, can hardly go below 5%.
Taxation: Few Wealth Taxes, But Transaction Taxes
Oman stands out for the absence of several taxes that typically burden real estate in other countries:
In Monaco, there is no annual property tax (for residential or commercial properties), no capital gains tax for individuals (except in case of professional activity), and no inheritance or gift tax on transfers within the family.
However, certain taxes do exist:
– a municipal tax of 3% on gross rents (paid by the landlord);
– a VAT of 5%, which does not apply to the sale and rental of residential housing, but applies to related services (agencies, management, certain works) and part of commercial real estate;
– starting in 2028, a personal income tax of 5% above a threshold (42,000 OMR), which may eventually affect large property income.
Real estate companies remain subject to corporate income tax at the standard rate of 15%, with a preferential rate of 3% for certain small Omani entities meeting strict criteria.
Renting a Property in Oman: A Framework Tightly Regulated by the Tenancy Law
Leasing is governed by the law on leases of residential, commercial, and industrial premises (Decree 6/89) and its subsequent amendments (notably Decree 72/08). This text remains the reference for relations between landlords and tenants.
Mandatory Registration and Rent Tax
Any lease must be made in writing and registered with the competent municipality (Muscat, or other governorate). For leases exceeding seven years, registration is done directly with the Ministry of Housing.
The landlord is, in principle, responsible for registration and payment of a 5% tax on the total amount of rents provided. In practice, parties often contractually arrange for the tenant to bear these costs. If the landlord fails to register, the tenant can do so themselves. However, failure to register can lead to:
– a fine of up to three times the amount of the tax due;
– the nullity of the lease and the tenant’s lack of protection in case of dispute.
Authorities remind that under-reporting rents or unregistered leases are illegal. These practices deprive the State of tax revenue and weaken both landlord and tenant in case of a dispute.
Duration, Renewal, and Rent Increases
The law does not set a minimum duration for a lease, but establishes rules of stability:
– the lease is tacitly renewed for the same duration if neither party gives notice of non-renewal at least three months before expiry (or half the duration for a short lease);
– for residential properties, a landlord cannot request eviction before four years, except in specific cases;
– for commercial or industrial premises, this minimum period is extended to seven years.
As for rent increases, the principle is contractual freedom, but the legislator has intervened in certain periods to limit the annual increase (cap of 7% after three years in some versions). In practice, there is currently no strict national rent control, but courts and municipal committees can arbitrate in cases of increases deemed abusive, in light of economic and social conditions.
Repairs, Charges, and Deposits
Regarding maintenance, the law reverses what is sometimes seen elsewhere: the landlord is, in principle, responsible for major and minor repairs, with the tenant only handling routine upkeep and returning the property in its original condition, normal wear and tear excepted.
Utility charges (electricity, water, gas, telephone, sanitation, municipal fees) are almost always borne by the tenant. The tenant must have the meters put in their name by presenting the registered lease.
Practices of security deposits and advance payments are very widespread: several months (sometimes a year) of rent paid upfront, post-dated checks for the entire lease term, sometimes promissory notes to guarantee return in good condition. If the landlord refuses payment, the tenant can deposit the rent with the registry of the competent court, which protects them against an accusation of non-payment.
Termination and Grounds for Eviction
The law strictly regulates the grounds on which a landlord may request eviction, especially during the first four or seven years:
The landlord can terminate the lease for several specific reasons: non-payment of rent within fifteen days following the due date (catching up before the decision may save the lease), use of the premises for unauthorized activity, behavior harmful to the building, public health, morals, or safety, subletting without written permission (except total transfer of a business for commercial/industrial premises), personal need of the landlord or first- or second-degree relatives (with at least six months’ notice and if no other suitable vacant property exists), or a municipal demolition decision or obtaining a reconstruction permit.
A safeguard exists: if the landlord evicts a tenant on grounds of personal need but does not occupy the property within three months (or occupies it for less than a year without legitimate reason), the tenant may request to reintegrate the premises at the same rent.
Rental disputes are first decided by specialized committees within municipalities, whose decisions are enforceable. Judicial appeal is possible, but procedures have been accelerated thanks to recent procedural reforms.
Building and Renovating: Permits, Standards, and Liabilities
Beyond ownership and leasing, Oman has progressively strengthened construction quality control and building safety, especially in the capital.
Building Permits: Major, Minor, Excavation
Any new construction or significant extension requires a permit issued by the competent municipality (in Muscat, the Muscat Municipality). The main types are:
– major construction permit, for new constructions, valid for two years;
– minor permit, for secondary works (extensions, repairs, temporary buildings, fences), valid for one year;
– excavation permit, required for civil engineering works outside the plot boundaries.
A single plot cannot be covered by multiple major or minor permits simultaneously. The application file must include detailed plans, signed by an approved engineering office, and, where applicable, prior approvals from other authorities: Civil Defense (fire), Ministry of Tourism, Supreme Council for Planning / MOHUP, notably for coastal areas subject to mandatory setbacks.
Cost in OMR for a major permit for a construction up to 400 m² in Oman.
Design Rules Inspired by the IBC but Adapted to Oman
A major movement is underway with the adoption of an Oman Building Code (OBC) based on the International Building Code 2021, adapted to local realities. The MOHUP led this project with an advisory council of experts, as part of Oman Vision 2040, to build an “intelligent and resilient” built environment.
The OBC, accompanied by specialized codes (plumbing, mechanical, private sanitation, existing and historic buildings, energy efficiency), progressively imposes precise technical requirements:
Construction projects must comply with a set of strict rules, including traditional Islamic and Arabic architectural style, structural calculations according to local standards, mandatory soil tests for buildings over three stories, specific waste rooms for buildings over four levels, fire protection systems approved by Civil Defense, mandatory thermal insulation for certain building types, accessibility for people with disabilities in public buildings, and compliance with urban planning rules regarding footprint, heights, setbacks, and architectural elements.
Specific codes for existing and historic buildings also govern renovations in old neighborhoods, to reconcile heritage preservation with safety standard upgrades.
Professional Liabilities and Decennial Liability
The regulations clearly define roles:
– the “consultant” is the approved engineer or design office that designs and supervises the project;
– the “contractor” executes the work according to the consultant’s plans and specifications;
– for projects over 10,000 OMR or multi-story buildings, the consultant must formally document their supervision commitment with the municipality and send periodic reports.
The liability of consultants, contractors, and soil laboratories is fully engaged regarding the safety of structures within the scope of their assignments. The Civil Code and the law on engineering consulting offices (Decree 27/2016) provide for mandatory decennial liability: for ten years, architects and contractors are presumed liable for hidden defects compromising the solidity or suitability of the structure, without being able to contractually limit this liability.
Promoting, Selling, Managing: A Sector Now Highly Regulated
The rapid growth of the real estate market and a few scandals involving incomplete projects have led the legislature to significantly tighten control over developers and intermediaries.
The New Real Estate Regulation Law: A Major Cleanup of the Sector
Decree 79/2025, which establishes the Real Estate Regulation Law, marks a major step. This law repeals several older texts: the law governing real estate brokerage (Decree 78/86), the system of co-ownership by apartments and floors (Decree 48/89), and the system of escrow accounts for development projects (Decree 30/2018). Now, a single text covers everything.
The main lines of this law can be summarized as follows: the fundamental principles and objectives pursued by the legislation, as well as the practical implications that follow.
The law strengthens the MOHUP as the single regulator of the sector, endowed with quasi-judicial prerogatives. Any developer must now obtain a prior license, open a dedicated escrow account per project for buyer funds (releasable according to work progress), provide financial guarantees, and publish regular reports. Off-plan sales contracts must be registered with the real estate register, with a six-month deadline to register units sold off-plan. Brokerage and real estate marketing also require a license, with registration in a national register. Finally, the creation of homeowners’ associations with legal personality is mandatory for co-ownerships.
The penalties provided range from fines to suspension and then license revocation, with, for serious cases, the possibility of criminal prosecution.
Brokerage Regulation: License, Broker Card, and Obligations
Before the new law, brokerage was already regulated: a broker had to be registered with the ministry (formerly the Ministry of Commerce, then MOHUP) and comply with obligations regarding record-keeping, transparency on their commission (often 3% for a sale, 5% of an annual rent for a lease), prohibition of trading on their own account within certain timeframes, and document retention for five years.
The new system goes further:
– each brokerage company must obtain a specific license from MOHUP, with an annual cost ranging from 1,000 to 3,000 OMR, in addition to company formation fees;
– individual brokers must hold a “broker card,” issued after verification of criteria (Omani or GCC nationality, minimum age of 21, clean criminal record, secondary school diploma, completion of specialized training);
– agencies must comply with a high “Omanization” rate (up to 80% Omani brokers), be members of the Chamber of Commerce, and have compliant offices;
– it is mandatory to implement AML/CFT compliance procedures (Anti-Money Laundering / Combating the Financing of Terrorism) and collect KYC (Know Your Customer) documentation for each client.
Offenses, such as practicing without a license or concealing transactions, expose to heavy fines, or even prison sentences in cases of repeated illegal practice.
Urban Planning, Zoning, and Land Use: Where and How to Build?
Beyond property and construction rules, Oman has adopted a long-term spatial strategy: the Oman National Spatial Strategy (ONSS), aligned with Oman Vision 2040. It aims to address population growth, urban sprawl, and environmental challenges, while preparing for the post-oil era.
The country also adopted in 2023 a new regulation on governance of land planning controls, replacing a 2013 text. This regulation governs:
The regulatory framework covers several aspects: subdivision and reconfiguration of plots; modification of land use in urban areas, only for a high-value-added project; prohibition of converting agricultural land into buildable land, unless already within an urban zone; the possibility for the ministry to reserve, without compensation, a portion of reconfigured land for public services (roads, schools, parks); and new rules on building volume, visual alignment, and buffer zones for better integration of constructions.
In practice, obtaining an urban planning permit requires providing the title deed, a site plan (krooki), architectural plans, environmental impact studies where applicable, and a series of no-objection certificates (NOCs) from various bodies (water, electricity, civil defense, etc.). This procedural burden is often criticized, but it aims to prevent land-use conflicts and haphazard construction.
Residence, Visa, and Ties to Property
A significant advantage of real estate investment in Oman, particularly in ITCs, is the possibility of obtaining extended residency rights. The Golden Residency Programme, relaunched in 2025 with lowered thresholds, notably provides for:
For an investment of at least 200,000 OMR in an ITC, a renewable 10-year residency is possible. Options for 5 or 2 years exist for investments between 50,000 and 100,000 OMR, subject to conditions. These residencies allow sponsoring close family, employing domestic staff, and benefiting from facilitated travel.
It is important to emphasize that no amount of real estate investment leads to Omani citizenship, which remains the preserve of exceptional political procedures. The residence visa linked to property is always temporary and conditional on maintaining the investment.
Market Trends and Future Challenges
The successive reforms of the last ten years – controlled opening to foreign capital, structuring of ITCs, extension of usufruct rights for expatriates, strict regulation of developers – are part of a clear objective: diversify the economy and make real estate an attractive sector without losing control of land.
In this context, several trends are emerging:
Foreign demand is concentrated on tourism residences (ITCs) and large mixed-use projects in Muscat and Salalah. Investments through real estate funds regulated by the Capital Market Authority, open to foreign capital, are attracting growing interest. Off-plan home buyers benefit from enhanced protection thanks to escrow accounts and mandatory guarantees for developers. Finally, technical standards (Oman Building Code) are being strengthened to improve energy sustainability and building resilience to the climate.
Going forward, the effective implementation of the Real Estate Regulation Law and its implementing regulations will be decisive: the level of stringency regarding developer licenses, financial flow controls, functioning of co-owner associations, and alignment with new urban planning policies.
For a foreign investor, an individual expatriate, or an entrepreneur wanting to build a factory, the Omani legal environment is not simple, but it has an advantage: the main outlines are stable, and the rules are clearly written, even if they require some interpretation.
Some reflexes are essential:
Before any real estate investment in Oman, it is crucial to: verify the nature of the right (ownership, usufruct, lease) and its compatibility with your status (Omani, GCC, foreigner) via the real estate register; check that the plot’s location is permitted for your status and compliant with zoning; for an off-plan purchase, only deal with licensed developers holding an escrow account compliant with the law; for a lease, insist on municipal registration and transparency regarding the payment of the 5% tax; and finally, include all fees (transfer duties, professional fees, mortgage) and recurring costs (service charges, municipal tax) in your business plan.
In this context, the assistance of a local lawyer, an accredited real estate consultant, and a licensed broker is not a luxury: it is the best insurance to turn a real estate opportunity in Oman into a solid, legally secure, and sustainable investment.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
