What Indian homebuyers should know before investing in real estate in Oman?

The Sultanate of Oman, ruled by Sultan Haitham bin Tariq is an Arab Monarchy that shares its borders with the United Arab Emirates (UAE), Saudi Arabia and Yemen. A peaceful, safe and developed country, Oman shares excellent relations with India. It is a favourite choice among Indians because of the job opportunities here, its landscape, convenience and its proximity to India.  The Indian Standard Time is around 1.5 hours ahead of Oman. With an intent to get in long-term financial investment and diversify the country’s economy, Oman, starting 2006, under a regulated framework opened doors for non-Omani nationals to invest in real estate in the country. 

In this guide, we discuss in detail the benefits and risks associated with investing in a property in Oman, places where an Indian can buy a property in Oman, eligibility, the documents required and the way the finances can be managed. These are in line with property ownership norms in neighbouring GCC countries. Read on.

Oman as a real estate destination for Indians

According to the Sultani Decree 12 of 2006, expat Indians are allowed to buy residential and commercial properties in Oman. However, these cannot be bought anywhere in the country and are restricted to designated zones called the Integrated Tourism Complexes (ITCs) and a few commercial properties that are licensed by the Ministry of Housing and Urban Planning (MOHUP) through usufruct rights. 

All about the Integrated Tourism Complexes (ITCs)

• The ITCs are developments that are a combination of residential, commercial and tourism spaces. Within the ITCs, an Indian national and even people of other nationalities can get 100% of ownership rights in residential and commercial spaces. 
• Once construction of a real estate project is completed in the ITC, the developer has the right to sell it to both Omanis (locals) and the non-GCC nationals such as Indians. 
• In case of property purchase in an undeveloped land, the buyer has to start construction within four years of acquisition, failing which the MOHUP can take over the land and auction it. Note that in case of any unavoidable problem, one can approach the ministry for extension of deadline for construction, which may or may not be done and is solely at the discretion of the ministry. 
• In case a developer doesn’t fulfil the compliance issued, the Omani Government has the right to take over the project.

What are the current and future ITC projects in Oman?

The various projects being developed or planned to develop in Oman include: 

• Al Mouj Muscat
• Jebel Sifah
• Muscat Bay
• Muscat Hills
• Salala Beach Resort
• Saraya Bandar Jissah
• Shangri-La’s Barr Al Jissah Resort and Spa

Eligibility: Who and where can you buy a property in Oman?

Mentioned are the eligibility criteria that must be fulfilled when buying a property in Oman. 

What makes a home-buyer eligible to buy a property in Oman? 

• The homebuyer should have been residing in Oman for at least two years.
• A buyer should be above 23 years of age to buy a property in Oman.

Where can a home buyer buy property in Oman? 

• A home buyer can buy a property that is located in the zones that have been approved by the ministry of the Oman government. 
• A home buyer can buy a property only in multi-storey buildings which have four or more floors. 
• A home buyer can buy only one housing unit in a building and note that in a building in Oman not more than 40% of the housing units can be held by expats. 
• A building cannot have more than 20% of housing units sold to people of the same nationality. Thus, in a building only 20% of the housing units can be held by Indians. 

Is there any regulation on the property value in Oman?

While investing in Oman, note that if a homebuyer is looking to invest in Muscat Governorate, then he should invest in a property with a minimum value of OMR 45,000. Meanwhile if the homebuyer is exploring buying a house in other governorates, then the minimum property value is OMR 35,000.  

Banks such as Bank Muscat, Bank Dhofar and National Bank of Oman provide mortgage options on the basis of the income of the homebuyer. This is generally given for 20 years with an interest rate between 3% to 7%. 

What are usufruct rights? 

Usufruct rights are a long-term leasehold right that lasts up to 99 years. Ownership of properties in Oman are granted through the usufruct rights, where the property buyer can stay, use or rent to earn money from the property for a specified time period. The rights can be sold, transferred or passed on to legal heirs. However, the property buyer won’t own the land on which it is constructed as these are land parcels owned and leased from the government. 

In 2020, Oman opened up property rights for non-Omanis by way of the usufruct rights that allowed ownership of properties especially in and around Muscat, the capital city of the country. Note that this was outside of the traditional ITCs.

What are the documents required to buy a house in Oman?

• Purchase agreement also known as Akas al-Shei
• Title deed
• Property registration with the ministry
• ID proof
• Proof of residence certified by ministry of interior
• Passport
• Oman resident card
• Income proof
• Property survey and site plan
• Building permits
• Zoning certificate

It is important to take the help of an Omani lawyer who will help verify documents and ensure the said property is legally compliant. 

What are the benefits of buying a property in Oman?

• In case of buying property in ITC projects, the buyer and his immediate family are granted Omani residency. 

• The Omani Riyal, Oman’s currency is the third strongest currency globally. 

• It is a safe country to live and invest and has a stable political environment. 

• Since there are many expats in the country, the rental yield is high especially in cities like Muscat, Salalah etc. On the other hand, it is comparatively cheaper in places such a Nizwa.
• The country is opening up to the tourism sector.
• Oman is working towards its Oman 2040 vision that focuses on getting in foreign direct investment in the country. 

What are the benefits of getting an Oman residency?

• Safe place to live as Oman is ranked among the top 10 safest countries to live in the world. 
• An Oman residency will give the person, spouse, children and dependent parents the right to stay, work and do business in Oman. 
• There will be no personal income tax levied on local or foreign-earned income.
• There will be no inheritance tax levied that will ensure that the wealth is transferred entirely to the heirs.
• Access to premium healthcare, educational facilities. 

What are the disadvantages of buying a property in Oman?

• There is no land ownership by the property buyer. 
• While leases can be renewed upto 99 years, in some cases on the basis of government decisions, leases have to be renewed every 10 years. 

What places are restricted for Indians to buy a property in Oman?

While the Oman real estate has opened up, there are places where non-Omanis (Indians and other expats) are not allowed to invest. These include: 

• Buraimi
• Dhahirah
• Jabal Akhdar
• Jabal Shams
• Liwa
• Masirah
• Musandam
• Wusta
• Shinas

Non-Omanis cannot buy agricultural land and areas near military bases and archaeological sites. 

Why is Oman a good option for Indians to buy a property?

Akila Raghuram moved to Muscat, the capital city of Oman in 2007 and invested in a property in the country, a decade after that. She decided to invest in a property here because it ticked all her priority boxes.  

Strong currency: Omani Riyal is pegged to the US Dollar. This ensures that there are not much fluctuations, making the Riyal a trustworthy currency.

DTAA agreement with India: India and Oman Double Taxation Avoidance Agreement (DTAA) helps avoid double taxation. 

Connectivity with India: Oman is geo-graphically well-connected to India with direct flights to most Indian cities. There are around four flights daily that connect Mumbai and Muscat alone. There are direct flights that connect Muscat to Chennai, Kochi, Bangalore, Delhi and flights with halts to Tier-2 cities like Raipur, Nagpur, Coimbatore etc. 

Climate: Climate-wise summers are hot but other times of the year are pretty comfortable. With AC a basic commodity, one can stay comfortably all through the year. 

Infrastructure: Oman boasts of an excellent infrastructure with wide maintained roads. “All the cities here are spacious and planned in such a way that people won’t feel claustrophobic with the presence of haphazard buildings here and there. The architecture seen here is predominantly meditarian. “To cover a distance of 30 km, it takes less than 30 minutes, something takes around 1 to 1.5 hours in Mumbai, depending on the traffic on the road,” says Akila. All the required civic amenities are of high quality with utilities charges such as that of water and electricity, at par with metro cities in India. 

Culture: Indians love multi-culture set up and this is beautifully depicted in Oman. 

Construction quality: “When you compare with a property in Mumbai, you may get a property for Rs 1.5 cr in the suburbs with squatters around. However, in Muscat, for around the same budget or slightly more, you get a spacious house in a clean environment. The quality of construction in Oman is very good right from the structures to the fixtures and fittings. One will actually be able to experience premium living by investing in properties here.”

Less population: Visas for traveling overseas can easily be sought from Oman as the population is less and so the queues are lesser.

Secure investment: Lovkesh, a resident of Muscat, bought a villa in the country in 2007. “The rental yield here is much better than India around 6%.  Also, the law is very strict here and thus, there are no cases of encroachment or adverse possession of property. In fact, tenants cannot even spoil the rented apartment and have to hand it over to the landlord in the same as it was given.”

Easy buying, renting and selling of property: Lovkesh explained that property buying is very easy in the country with. One can easily check the listings and buy, sell or rent properties here. Once a property is bought here, the owner automatically gets a residency visa. Thus, even in case the owner wants to wind up and leave the country, he need not end up doing a distress property sale.”

Housing.com POV

Investing in a property outside India requires a lot of thinking as people primarily look out for a safe and stable environment, financial help and safety of the asset. Oman’s real estate market facilitates safe property transactions. If you are looking at staying in Oman from a long-term perspective and would want to enjoy the Oman residency benefits, investing in the country’s real estate market is one of the most recommended ways.