Buy-to-Let Investment in
Oman
The complete landlord's guide to rental property investment in Oman. Real yields, honest costs, and actionable strategies for international investors.
Market Context
Why Buy-to-Let in
Oman in 2026?
9.19% Market Growth
Oman's residential real estate market is projected to grow from USD 4.78B (2025) to USD 7.42B by 2030. This isn't speculation—it's structural demand from Vision 2040 diversification, tourism expansion, and a young population needing modern housing.
Supply-Demand Imbalance
Only ~5,500 new residential units are delivered annually against growing demand from a rising expat population and 11.7 million tourism target by 2040. This imbalance protects rental rates and occupancy.
Tax-Free Returns
Oman charges 0% income tax on rental profits, 0% capital gains tax, and 0% annual property tax. A 6% gross yield here delivers more to your pocket than 8% in taxed jurisdictions.
Yield Reality Check
Beyond the
Headline Numbers
"6-8% yields" sounds attractive until you understand the real math. Here's what serious investors actually calculate.
Gross vs Net
Gross yields of 7% often become 3.6-5.5% net after costs. Still competitive globally, but know the real number.
STR Arbitrage
Long-term OMR 600/month → Short-term OMR 1,000+/month. This 40-60% premium drives savvy investor strategies.
Rental Performance by Location
Al Mouj (The Wave)
Blue-chip, highest liquidity
6-8% gross
4-5.5% net | 92%+
AIDA
Luxury resort, Trump brand
TBD (Off-plan) gross
7-9% projected net | Est. 85%+
Muscat Bay
Ultra-luxury, Kempinski
5-7% gross
3.5-5% net | 88%+
Jebel Sifah
Resort STR focus
7-9% gross
5-6.5% net | 65-75% STR
Sultan Haitham City
Emerging, value entry
8-10% gross
6-7.5% net | Est. 80%+
* Yields are estimates based on 2024-2025 market data. Actual returns depend on purchase price, unit condition, and management quality.
Ownership Routes
How Foreigners Own Buy-to-Let Property in Oman
Two distinct legal frameworks allow international investors to own rental property. Your choice depends on budget, location preference, and residency goals.
ITC Freehold
100% ownership in designated Integrated Tourism Complexes. No nationality restrictions. Full inheritance rights. Ownership grants residency for buyer and immediate family.
- Perpetual freehold ownership
- Al Mouj, Muscat Bay, AIDA, Jebel Sifah, Muscat Hills
- Residency visa included
- Highest liquidity for resale
Best for: International investors, residency seekers, premium rental positioning
Usufruct (Decision 357)
Up to 99-year rights in approved buildings outside ITCs. Requires 2+ years Oman residency. More affordable entry points in prime Muscat locations.
- Minimum OMR 45,000 in Muscat
- Building must have 4+ floors
- Max 40% foreign ownership per building
- Max 20% single-nationality per building
Best for: Existing residents, city-center preference, budget-conscious entry
Landlord Economics
Costs, Taxes &
The Real P&L
Oman's tax regime is exceptional for landlords. The absence of income tax, property tax, and capital gains tax means more of your rental income stays in your pocket.
| Tax/Fee | Rate |
|---|---|
| Registration Fee | 3% (one-time) |
| Annual Property Tax | 0% |
| Income Tax on Rent | 0% |
| Capital Gains Tax | 0% |
| VAT (Residential) | Exempt |
Ongoing Operating Costs
Service Charges
~OMR 2,000-4,000 for typical apartment
OMR 3-8/sqm/year
Property Management
Optional for hands-off investors
8-12% of rent
Maintenance Reserve
Prudent budgeting for repairs
1% of value/year
Insurance
Building + contents coverage
OMR 200-500/year
Vacancy Allowance
1 month average between tenants
4-8% of annual rent
Example: OMR 120,000 Apartment
Optimized management can push this to 5-5.5% net.
Honest Assessment
Hurdles & Risk Factors
No investment is without risk. Here's what to consider before committing capital to Omani buy-to-let.
4-Year Build Requirement
Undeveloped ITC plots must commence construction within 4 years or risk repossession and auction by Ministry of Housing. Only buy ready or near-completion properties if uncertain about development timeline.
Tenant Default Risk
Rare in ITCs where corporate leases dominate, but exists in lower-end segments. Mitigate with proper tenant vetting, security deposits (2 months standard), and professional management.
Oversupply in Some Segments
Mid-market apartments in non-ITC areas face higher vacancy. Premium ITC properties maintain 92%+ occupancy, but commodity-grade units compete on price.
Currency Considerations
OMR is pegged to USD at 0.385, providing stability. This benefits dollar-based investors but means returns don't benefit from currency appreciation.
Regulatory Changes
While current policies favor investors, regulations can change. The 2020 usufruct expansion showed policy direction, but future changes aren't guaranteed.
Illiquidity in Downturns
Prime ITCs maintain 2-4 month sale timelines, but economic shocks could extend this. Don't invest funds you may need urgently.
Interactive Tool
Calculate Your Returns
Model your buy-to-let investment with realistic assumptions. Adjust vacancy and costs to stress-test your numbers.
Interactive calculator
Gross and net rental yield
Use conservative vacancy and cost assumptions. If the numbers only work with 0% vacancy, it is not robust.
Gross yield
7.20%
Annual rent divided by purchase price
Net yield
4.73%
After vacancy and operating costs
Annual model
Inputs
Common Questions
Buy-to-Let FAQ
Gross rental yields in prime ITCs range from 5-8%. However, sophisticated investors focus on net yields. For a 2-bedroom apartment in Al Mouj purchased at OMR 120,000 with OMR 700/month rent (OMR 8,400 annually):
- Gross yield: 7%
- Minus service charges (OMR 2,400/year): -2%
- Minus maintenance reserve (OMR 1,000/year): -0.8%
- Minus vacancy allowance (1 month): -0.6%
- Net yield: 3.6%
Well-managed properties achieve 5-7% net yields through minimizing vacancy and positioning for premium rents. The tax-free environment means this flows directly to investors without erosion.
Yes. Two routes exist:
- ITC Freehold: 100% ownership in Integrated Tourism Complexes (Al Mouj, Muscat Bay, AIDA, Jebel Sifah, Muscat Hills). No nationality restrictions. Ownership grants residency rights.
- Usufruct (Decision 357/2020): Up to 99-year rights outside ITCs. Requires 2+ years Oman residency, property in 4+ floor buildings, minimum OMR 45,000 value in Muscat.
Oman offers exceptional tax efficiency:
- 0% personal income tax on rental profits
- 0% annual property tax
- 0% capital gains tax on exit (individuals)
- 3% one-time registration fee at purchase
- 5% VAT on commercial property only (residential exempt)
This means a 6% gross yield delivers 6% to your pocket, unlike markets with 20-40% income tax.
Two-bedroom apartments in prime ITCs are the workhorses of the Omani rental market:
- Optimal balance of yield and occupancy
- Lowest vacancy rates (young families + expat professionals)
- Units near retail (The Walk, Al Mouj) command 20% premium rents
- 92%+ occupancy in established communities
Villas yield lower (4-5%) but attract C-suite executives and diplomats on 2-3 year corporate contracts with minimal default risk.
Short-term rentals achieve 8-10% gross with professional furnishing (OMR 8-15k investment) and management.
Yes. Short-term rentals operate widely in ITCs. A well-furnished 2-bedroom in Al Mouj generates:
- Long-term lease: OMR 600-700/month
- Short-term rental: OMR 80-120/night (OMR 1,000+/month peak season)
- Annual occupancy: 60-70%
The arbitrage is significant. Professional property management companies handle guest services, cleaning, and marketing. Oman's tourism target of 11.7 million visitors by 2040 supports sustained STR demand.
Sale timelines:
- Prime ITCs (Al Mouj, Muscat Bay): 2-4 months
- Mid-market areas: 4-6 months
- Best listing window: September-March (expat relocations, winter visitors)
Exit costs:
- Agent commission: ~3% (typically seller pays)
- Legal fees: OMR 500-1,000
- Capital gains tax: 0%
Budget for these annual costs:
- Service charges: OMR 3-8 per sqm (OMR 2,000-4,000/year for typical apartment)
- Property management: 8-12% of rental income (optional for self-managed)
- Maintenance reserve: 1% of property value annually
- Insurance: OMR 200-500/year
- Annual property tax: 0%
Entry points vary significantly:
- Sultan Haitham City: From OMR 60,000 (emerging, government-backed)
- Usufruct properties: From OMR 45,000 (Muscat city-center)
- Al Mouj studios: From OMR 90,000
- Al Mouj 2BR: From OMR 120,000
- Prime villas: From OMR 300,000
For residency benefits, OMR 250,000+ qualifies for Tier 2 (5-year visa), OMR 500,000+ for Tier 1 (10-year visa).
Investment Opportunities
Featured Buy-to-Let Properties
Browse developments in Oman's top-performing ITCs. Each offers freehold ownership, residency eligibility, and strong rental demand.
Ready to Explore Buy-to-Let Opportunities?
Browse investment properties in Oman's top-performing ITCs or speak with our advisory team for personalized guidance.