Oman law on expats holding leasehold properties soon

MUSCAT, May 4 - The government is likely to issue a regulatory decision to allow leasehold of properties for foreign individuals (expatriates) this year, according to a report. The annual report of Implementation Support and Follow-up Unit (ISFU) said: “In 2019, the aim is to issue the regulatory decision to allow leasehold of properties for foreign individuals and define the permitted scope.” The report added that the idea of opening the real estate market to expatriates was developed with the goal of attracting foreign expenditure and revitalising the real estate market, both of which are expected to have a positive impact on the Sultanate’s economy.

“This initiative began its journey at The Financial Affairs and Energy Resources Council, though after all preliminary endorsements were acquired from the Council of Ministers, the Ministry of Housing took ownership.” On the current status, the report said: “There were several challenges to see if this was initiative passed, the first of which was a debate on whether the directive would be issued in the form of a ministerial decision or a Royal Decree.”  It said the ministerial decision will only allow leasehold of properties without actual ownership, while ‘conversely’, a Royal Decree permitting foreign ownership of properties is the sole approach for foreigners to own freehold real estate outside Integrated Tourism Complexes (ITCs).

ISFU said it has been offering guidance throughout the process and encouraging the initiative to pursue the issuance of the ministerial decision and follow up the issuance of the Royal Decree. The Ministry of Housing and the Ministry of Legal Affairs are currently the stakeholder in this decision. It may be noted that a leasehold is a form of land tenure or property tenure where one party buys the right to occupy land or a building for a given length of time.  The leasehold estate can be bought and sold in the open market.

A leasehold differs from a freehold where the ownership of a property is purchased outright, and thereafter held for an indeterminate length of time, and also differs from a tenancy where a property is let (rented) on a periodic basis. Speaking to the Observer at the launch of a real estate project in Muscat recently, a top official from the developing company, Aqar, said the decision to allow expatriates to own properties outside the ITCs is one of the much-awaited in the construction sector. “We expect our type of properties to be included in this decision and it will also benefit the construction sector.”