Muscat: Oman’s realty sector will get a boost with expats buying flats in the country in the form of long-term investment, the Ministry of Housing and Urban Planning (MHUP) has said.
The minimum price for expats to purchase flats in Oman under the newly-launched real estate scheme has been set at OMR45,000, and those who buy these flats can either live there personally, or allow relatives of the first degree to reside within. First-degree relatives include the flat owner’s parents, siblings and children. Those who buy these properties have to be above the age of 23.
“It was determined that the minimum price shall be OMR45,000 to control real estate unit prices and to ensure non-competition,” said the ministry. “The prices will be evaluated and reviewed periodically and continuously.”
The regulations were issued by the ministry as part of its decision for expatriates in Oman to buy flats under its usufruct scheme. Under the right to usufruct, expats who buy flats have the right to access all the shared and common areas of the building, as well as use their property as collateral for any financial transactions.
The ministry said, “It can yield a number of economic benefits to the real estate market and to investment parties, including, pumping liquidity into the real estate market to increase its performance rates, contributing to the implementation of programmes aimed at economic diversification and strengthening the financial position of the Sultanate, and providing the requirements for a competitive business environment attractive to investors.
It will also help in “expansion of real estate development projects, and activating innovative policies to rotate residents’ funds locally, while the expenses of beneficiaries in services represents an addition to the market.”
Under the usufruct rules, residential units may not be sold before construction works are completed.
The property must be a multi-storey residential cum commercial building, and must be within the places specified for sale, and licenced by the Ministry of Housing and Urban Planning after completing the construction and accordingly dividing up the project.
“The age of the building must not exceed four years from the date of issuing the building completion certificate,” added the MHUP.
“The number of rooms in a residential unit must not be less than two rooms, with utilities, and the number of floors must not be more than four residential floors.”
The rules were issued under Ministerial Decision number 357/2020, with Muscat Governorate the only location identified at present for expats looking to buy residential property.
The usufruct right can be transferred to the legal heirs of the expat who owns the property.
“Other places will be identified in the rest of the governorates according to the regulations and planning criteria in future phases,” said the ministry. “Certain places for investment have been identified, and are to be determined by the Ministry of Housing and Urban Planning.”
“The usufruct system for non-Omanis defines specific places in Muscat Governorate according to the availability of adequate numbers of real estate units far from existing residential neighbourhoods, in order to maintain the privacy of the community and its demographic composition,” the ministry said in its statement.
The ministry has made available the sale of such properties, to keep pace with global trends to control the movement of funds, and utilise them in the Sultanate’s real estate sector. This is expected to yield a number of economic benefits to the real estate market, and support investment in real estate development projects.
“The seller of the real estate residential unit pays a fee of three percent of the value of the housing unit upon registration of the usufruct application, and the beneficiary pays a five percent fee of the value of the residential real estate unit upon registration,” it added.
Fahad Al Ismaili, the CEO of Tibiaan Properties, said the ministry had consulted with private companies in the real-estate sector to set the conditions for this regulation.
“Under this usufruct deal, expats have to own these properties for at least four years,” he said. “They are required to buy these flats for personal use. After four years, they can either sell this flat to someone else, or lease it. There are of course cases where expats are unable to fulfil their requirements of holding onto these flats for four years.
“For example, if an expat suddenly loses his job and cannot find another one, then he might not be able to possess the flat anymore,” added Al Ismaili. “In that case, he can submit a request stating his needs, and this will be taken into consideration.”
“The ministry has taken many of our requests and feedback into consideration while drafting this decision, has always met with the private sector in the past, and we are sure they will do so in the future as well,” he went on to say.
“We had a couple of other requests, such as making these properties freeholds, instead of leaseholds, and the issuing of visas to those who bought them, but we hope these will be looked at as and when the scheme matures.”
Explaining how this would help the real-estate sector in the country, Al Ismaili said, “This will be good, as it will bring in more money, and the property sector will benefit from this. In future, we might see this grown to other areas that expats are fond of, and where there are business opportunities for them.”