Costs and fees when buying property in Oman

Oman is a low-friction market to own and a modest one to buy. A foreign buyer should plan for roughly 5 to 8 percent of the price in one-off costs, and almost nothing recurs each year. The largest single item is the property transfer fee paid to the Ministry of Housing and Urban Planning, set at 3 percent of value for foreign buyers. There is no separate stamp duty: some guides loosely call the transfer fee a stamp duty, but the correct term, and the only headline transaction tax, is the transfer and registration fee.

Everything else is smaller and, in most cases, negotiable. Agency commission runs about 2 to 3 percent, legal and conveyancing fees fall in the OMR 500 to 1,500 range, and a valuation costs a few hundred rial. VAT enters the picture only on a new build, and even then only on the developer's first sale. Foreign freehold itself is confined to Integrated Tourism Complexes, developments such as Al Mouj Muscat, Muscat Bay and AIDA, so the costs below assume a purchase inside an ITC.

Two points are worth drawing out. First, VAT depends entirely on whether the unit is new. The first supply of a newly built residential property is standard-rated at 5 percent, so an off-plan purchase from the developer can carry it, while any later resale of a residential property is exempt. Long-term residential rent is exempt too. Commercial property, including hotel apartments and stores, is standard-rated.

Second, a reservation deposit is not an extra cost, it is the first slice of the price. New projects commonly take around 5 percent on a reservation, rising toward 10 percent on a signed reservation or memorandum, with the overall initial payment often in the 10 to 35 percent range depending on the plan. Those figures are developer-set and vary by project, so treat them as typical, not fixed.

Take a resale apartment at OMR 150,000, roughly USD 390,000 at the long-standing peg of about 1 rial to USD 2.60. Because it is a resale, no VAT applies. The buyer-side costs are the 3 percent transfer fee, agency, legal and a valuation, for an all-in figure near 6 percent of price. On a new build at the same price, add 5 percent VAT on the first supply, which lifts the total materially.

Oman is light to hold. There is no annual property tax, no capital gains tax for individuals and no inheritance tax. For an owner-occupier, the only meaningful recurring cost is the ITC community service charge, set by the operator and commonly quoted at around OMR 0.5 to 2.0 per square metre per month. It funds the maintenance, security and shared facilities that protect the asset, and it sits higher in the most managed, branded complexes.

Landlords face one extra item. Residential rental income carries a 3 percent municipality tax, levied on the rent rather than on the property. It applies whether or not the new income tax has arrived, and it is the only rent-linked levy in place today.

The structural change every Oman buyer should understand is not yet in force. Under Royal Decree 56/2025, issued in June 2025, Oman introduces a 5 percent personal income tax from 1 January 2028. It applies to personal income above OMR 42,000 a year, about USD 109,000, and it is the first personal income tax in any GCC state. The Tax Authority expects roughly 99 percent of residents to fall below the threshold, so it is aimed at higher earners.

For a property investor, the line that matters is that rental income is within scope, with deductions allowed for leasing-related expenses. A gain on a primary residence is exempt. So an owner-occupier is largely unaffected, while a buy-to-let investor whose total income clears the threshold should model the 5 percent into net yield from 2028. Executive regulations that set the detail are due before publishing as hard rules, so we confirm the position per investor rather than assume it.

Set against its Gulf neighbours, Oman reads as a quiet, durable place to hold property. The buying cost is concentrated and predictable, near 6 percent on a resale and a little more on a new build, and the annual cost on an owner-occupied home is close to nothing. There is no annual property tax, no capital gains tax for individuals and no inheritance tax, which suits an owner with a long horizon rather than a trader.

The honest caveat is the one most marketing omits: the 2028 income tax. It is dated, it is the first of its kind in the region, and it reaches rental income. For an owner-occupier it changes little; for an income investor it is a line in the model from day one. Price it in, confirm the VAT status of the specific unit, and Oman becomes one of the more straightforward markets in the Gulf to own well.