Oman's apartment market being opened up to foreign purchasers

Dentons
Contact

Dentons

Ministerial Decision 357/2020 (Decision) issued by the Ministry of Housing and Urban Planning (MOHUP) permits non-GCC nationals, for the first time, to acquire residential units in Oman outside of an Integrated Tourism Complex. The Decision supports the government's drive to diversify the Oman economy and stimulate investment in the real estate sector.

A non-GCC national can now acquire a usufruct of a residential unit in a multi-storey mixed-use commercial residential building. The initial term of the usufruct may not exceed 50 years, but the term can be renewed for up to 99 years. The Decision effectively creates a right similar to a long-term lease available in many jurisdictions.

A unit purchaser must be aged 23 or older and must have a valid residence permit at the time of the purchase. The property must be at least a two-room residential unit in a multi-storey (4+ floors) mixed-use building within specified locations identified by the MOHUP. Initially, the scheme is available in certain suburbs in Muscat. The building must not be more than four years old and it must be licensed under the new scheme. Residential units sold under the scheme in Muscat must be sold for not less than OMR 45,000, but this threshold is subject to review and amendment by the MOHUP.

A purchaser, together with his or her first degree relatives (i.e. parents, siblings and children), is only permitted to acquire one residential unit. Only 40% of the total number of residential units in the region may be put up for sale under the scheme and only 20% of these units can be sold to purchasers of the same nationality.

A foreign purchaser of a residential unit can mortgage the property to finance the purchase. A fee of 5% of the unit value must be paid to the MOHUP upon the grant of a usufruct under the scheme.

The purchaser may sell the usufruct right or rent the unit to third parties any time after four years from the date of registration of the usufruct in the purchaser's name. The Decision allows for the Minister of Housing and Urban Planning to grant exceptions on a case by case basis in certain circumstances. 

It will be interesting to see how the Decision is applied in practice and whether it creates a liquid market for foreign nationals to acquire a long-term real estate right in Oman.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dentons | Attorney Advertising

Written by:

Dentons
Contact
more
less

Dentons on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.