Tuesday 23 / April / 2024
Muscat: Oman’s Ministry of Housing and Urban Planning aims to sell 5,000 flats to expats and foreign investors under its new usufruct scheme permitting non-Omanis to own homes in the country.
Investments made by expats in the country will help stimulate the economy and encourage more people to put money into the Sultanate, instead of taking it overseas. “This decision was made because there are many expats residing in Oman,” said a senior real estate development official, speaking exclusively to Times of Oman.
“If, for example, we target even two per cent of the total number of expatriates and encourage them to invest, then over the next four years, we can earn large amounts of money from the real estate sector,” Deputy D.G of Real Estate Development Saleem Hassan Al Balushi said, explaining the rationale behind the scheme.
"The ministerial decision was made to convince residents in Oman to benefit from their presence in the country,” he added. “There are some who have stayed in the country for more than 30 years, but have not had this opportunity, but this has now been made available to them.”
Citing the schemes in other countries which allowed residency through property ownership, he said,
“Many countries have employed a similar approach. Residents there have absolute ownership, for a period of up to 99 years, with residency privileges as well as methods to obtain citizenship. Countries benefit from them investing in the real-estate sector. Europe is the best example of this form of investment, and other countries have also adopted this approach.”
The usufruct law, which is governed by Ministerial Resolution No. 357/2020, also guarantees the rights of investors of property, while ensuring there is minimal competition with Omanis looking to buy property.
Multi-storey structure
This has been made possible by enabling non-Omanis to only own property in certain areas, while ensuring that only 40 percent of flats in any of the buildings made available to foreign owners.
People belonging to the same nationality can also own only up to 20 per cent of flats in these complexes, which must be a multi-storey structure designed for both residential and commercial use.
“This will bring down the number of transactions sending money outside the Sultanate, and provide more financial and social stability inside the country,” Al Balushi said.
“The idea of this is to encourage non-Omanis to invest their savings inside the Sultanate.”
“Residents are permitted to keep their property when their visas expire, and when they go back to their home countries,” he added.
“They are also allowed to sell or bequeath them to others. This is different from ownership inside tourism complexes, such as Al Mouj, Jabal Sifah, Hawana Salalah and Muscat Bay, where freehold properties are sold along with residency.”
That automatic residency was not included as under the usufruct scheme was seconded by Fahad Al Ismaili, the CEO of Tibiaan Properties.
“The contract signed usufruct law does not allow residency for the expat or the foreign investor,” he said.
“If you are going to buy under the usufruct beneficiary law, you are not allowed to get residency from it, at the moment. But the ministry has kept that door open, and there is room available for this in the future.
“Prior to buying these properties, they must also obtain a no objection certificate from the Ministry of Housing so they can enter into this usufruct agreement,” added Al Ismaili.
He went on to say that currently, only expatriates and overseas investors who buy properties in Oman’s integrated tourism complexes (ITCs) are granted residency.
“Non-Omanis could own real estate even previously – before this decision came out – in ITCs,” he added. “They get freehold status there that allows them to get residency visas in Oman with regards to their investment. This is also extended to their first-order family members.”
Al Ismaili explained that because the ruling to allow expats to own residential homes in Oman was still relatively new, more positive changes benefiting homeowners are likely to come in future.
“Maybe as things develop and this matures, I think there may be some other factors introduced into this decision,” he added.
“It is a new step towards foreign investment in real estate, therefore the government is implementing it in a mild manner in the beginning, and hopefully, it will develop further as we see results in the near future.”
“This decision is one that we have awaited for a long time to be introduced in the local market in Oman,” said Al Ismaili.
“The ease of regulations will help diversify the economy, attract foreign investments, and help lower the migration of investments outside Oman. It will also create more appetite for real estate investment in Oman.”
