Draft Real Estate Law in Oman its’ Opportunities, and Key Challenges in 2025

Draft Real Estate Law in Oman its’ Opportunities, and Key Challenges in 2025

The real estate industry in Oman is embarking on a fascinating era of development and upgradation supported by new laws, deliberate government policy changes, and a continuously enhancing investment environment. With the Sultanate seeking to diversify its economy through Vision 2040, real estate has become a key sector drawing in regional and foreign investors alike. With major policy reforms, new fee structures, and a growing investor-friendly environment, it is crucial to stay updated on the latest trends and challenges for anyone planning to purchase, sell, or invest in property in Oman.

In this article, we give an exhaustive overview of the draft Real Estate Regulation Law, fee amendments, government plans, and 15 real-world challenges that investors may encounter in 2025, along with tips on how to overcome them.

On 5 March 2025, Oman's State Council Economic and Financial Committee, led by Dr Dhafir bin Awadh al Shanfari, considered the draft Real Estate Regulation Law, taking into account comments from Majlis A'Shura. The law is a breakthrough for the Omani real estate market, with the goal of consolidating fragmented legislation and establishing a clear, integrated framework that regulates all aspects of real estate activities.

Main Aims of the Draft Law:

i.              Harmonization of Legislation

Consolidating all real estate laws into a single harmonized legal code.

ii.            Transparency and Clarity

Providing legal certainty in property rights, sector operations, and contractual relations.

iii.           Modernization

Harmonizing outdated legal provisions with modern market realities.

iv.           Promotion of Investment

Making the sector more attractive to domestic and foreign investors through simplified procedures and assurances.

v.            Professional Standards

Implementing licensing systems for real estate professionals, developers, brokers, and valuers.

This legislation is likely to be a key driver of foreign investments, safeguarding the rights of stakeholders, and establishing a strong and transparent real estate sector in Oman.

Real Estate Fee Revisions

In addition to legislative reforms, the Ministry of Housing and Urban Planning has embarked on a revolutionary revision of real estate service fees to enhance affordability, efficiency, and investment.

Highlights of the New Fee Structure:

i.              Registration Fees from 2% to 1% for Omani individuals and companies, significantly reducing ownership costs.

ii.            Islamic Financing Deals limited to 0.5%, offering customized solutions for buyers utilizing Sharia-compliant financing.

iii.           Mortgage Registration Fees also limited to 0.5%, relieving investors from the burden of financing.

iv.           Fee Streamlining 47 service fees consolidated, 11 abolished, 8 lowered, and 14 new services added.

v.            Support for Investors where refunds for modifications in business activity types, supporting flexibility.

vi.           Agricultural Land Conversions and Exemptions of fees in non-investment government planning areas.

vii.          E-Government Services some fees waived to promote electronic transactions and minimize the cost to citizens.

viii.         Fee Exemptions where Low-income people, retirees (with an income level below RO 300), disabled persons, and beneficiaries of the Family Income Scheme are now exempt from certain ownership charges.

The wholesale reform seeks to make the process open, streamlined and with fixed costs, thereby attracting Oman's property market to new investors and alleviating the economic burden on existing stakeholders. Beneficiary satisfaction is anticipated at 90%, through simpler, easier, and less costly service frameworks.

Biggest Challenges of Omani Real Estate Investment

I.             Familiarity with Domestic Laws and Foreign Ownership Regulations

Only foreigners can purchase freehold property in special Integrated Tourism Complexes (ITCs), which restricts choice.

II.            Controlling Rising Property Prices

Oman real estate prices are predicted to rise in 2025 as a result of economic growth and rising demand.

III.          Choosing the Correct Property

The market offers diverse options, from tech-enabled villas to urban apartments.

IV.           Evaluating Economic Growth

With projected 3.1% GDP growth in 2025, understanding its impact on real estate is crucial.

V.           Tapping into the Tourism Boom

With more than 5.3 million visitors projected, rental demand is increasing.

VI.           Dealing with Residency and Visa Schemes

Buying property can open up residency avenues, but regulations differ.

VII.         Making the Most of Tax Benefits

Oman has competitive tax perks, but subtleties (such as no VAT in Duqm).

VIII.        Synergy with Vision 2040

Government projects have the direct potential to impact property values.

IX.           Contrast with Other Regional Markets

Oman's market is unique compared to Dubai or Doha in terms of price and development.

X.            Legal Frameworks

Regulations such as the 70% foreign ownership limit in firms influence investments.

XI.           Financing Properties

Foreigners might have limited mortgage options.

XII.         Infrastructure and Amenities

There could be limited modern infrastructure in some areas.

XIII.        Cultural and Social Norms

Adapting to local customs is vital for long-term integration.

XIV.      Property Maintenance

It can be challenging to manage properties from overseas.

XV.         Language Barriers

The official language is Arabic, which can make paperwork more difficult.

Conclusion

Oman's real estate market in 2025 offers a mix of opportunities and challenges. With the Real Estate Regulation Law, overall fee cuts, and forward-looking development under Vision 2040, the Sultanate has the potential to be among the most desirable investment hubs in the Gulf.

As a first-home buyer, long-term investor, or expat planning to relocate and reside as property owners, the changing legislative framework, the behavior of markets, and conceivable hindrances will help you to make well-founded choices.

When they remain alert, consult an expert, and are open-minded, investors may maximize the strengths of Oman's booming and expansive property market.