Oman will charge a 5% personal income tax from 1 January 2028 on annual gross income above OMR 42,000 (about USD 109,200), under Royal Decree 56/2025. Rent and the proceeds of selling property count towards that threshold. By the Oman Tax Authority's estimate, about 99% of residents are below it, so most people who own one home in Oman will pay nothing.
Nothing is charged on personal income before 2028. If you are buying now, the tax is something to plan for, not a cost you meet on day one. It matters most to people with several rental units and to anyone who expects to sell an investment property at a gain after 2027.
What the 2028 income tax is
The decree was issued in June 2025 and put Oman ahead of every other Gulf Cooperation Council state in taxing personal income. The rate is a flat 5%. It applies to individuals, Omani and expatriate alike, and only to the part of annual gross income above OMR 42,000.
The law lists eleven sources of gross income. Two concern property owners directly: income from leasing, and proceeds from disposing of real estate. Salary, rent, sale proceeds and the other listed sources are added together to test whether you pass the threshold.
The working detail sits in executive regulations: the deductions, the return forms and the holding period for the home exemption. The group's October 2026 market report still listed those regulations as something to watch, so check what has been published before you rely on anything beyond the rate, the threshold and the start date.
How rent is treated
From 2028, rental income is one of the taxable sources. Two rules soften that. Expenses linked to letting can be deducted, so the charge falls on net income, not gross rent. And a loss can be carried forward for five years.
The income tax is separate from the municipal tax on rent, which is around 3% of gross rental income and applies today. A landlord whose total income passes OMR 42,000 from 2028 would meet both: the municipal levy on the rent, and 5% income tax on the taxable excess.
An owner with one let apartment and a modest income is unlikely to reach the threshold on rent alone. For scale, Savills put the average rent for a two-bedroom apartment in Al Mouj Muscat at OMR 710 a month in the first quarter of 2026.
How a sale is treated
Proceeds from selling real estate also enter the base from 2028, with carve-outs for the homes you live in.
| Situation | Treatment from 1 January 2028 |
|---|---|
| Selling your primary residence | Exempt once a minimum holding period is met. The regulations set it, and reports put it at about two years |
| Selling a second home | Exempt once in a lifetime |
| Selling other investment property | Counts towards the OMR 42,000 threshold, with 5% charged on the taxable excess after allowable deductions |
| Rental income | Counts towards the threshold. Letting expenses are deductible and losses carry forward for five years |
| Any income earned before 2028 | No personal income tax |
Source: Royal Decree 56/2025 as summarised in the group's tax report, published April 2026 and updated November 2026. The executive regulations set the final detail.
The old line that Oman has no capital gains tax now needs a date on it. For individuals it holds until the end of 2027. After that, a gain on an investment property can be taxed if your total income for the year is above the threshold.
What does not change
The decree leaves the rest of the cost picture alone. Foreign buyers pay a 3% transfer fee to the Ministry of Housing and Urban Planning when the title is registered. Omani nationals have paid 1% since January 2025. There is no stamp duty and no annual property tax.
VAT at 5% applies to the first supply of a new residential building by a developer. A residential resale is exempt. If you are buying off-plan, ask whether the quoted price includes VAT: the current price lists for ALMAR Residences and several other new projects quote before VAT.
Oman has no inheritance tax. A Royal Directive of January 2023 also suspended withholding tax on dividends and interest going to non-residents, across the whole country, which matters only if you hold property through a company or fund. Our guide to property costs and taxes in Oman sets out each charge.
Who should plan now
Owner-occupiers. Little changes. Living in your own home creates no rental income, and the sale of a primary residence is carved out.
Owners of one let property. Add your expected net rent to your other income for the year. If the total stays under OMR 42,000, the income tax does not apply. The municipal tax on rent still does.
Portfolio landlords and frequent sellers. This is the group the tax reaches. Model the 2028 position on net figures, keep records of letting expenses from now, and take advice on whether to hold property personally or through a company.
Owners who live abroad. How Oman's rules interact with tax where you live is a question for advisers in both countries. This article is general information, not tax advice.
Does the tax change the case for buying?
For most buyers, not by much, but it removes a slogan. Oman can no longer be sold as permanently tax-free on rent and gains. What decides whether a purchase works is still the home, the title, the developer and what the property can be let for.
Residency is untouched by the decree. Golden Residency is available from OMR 200,000 for a completed home in an Integrated Tourism Complex with a title deed issued, runs for 10 years and is renewable. Our Oman residency guide covers each route, and the residency checker shows which one fits a given purchase.
Property values and rents can fall as well as rise, and off-plan projects can be delayed. Tax rules can also change again before 2028.
The bottom line
- A 5% personal income tax starts on 1 January 2028, on annual gross income above OMR 42,000.
- Rent and property sale proceeds count towards the threshold. There is no income tax before 2028.
- Selling your primary residence is exempt, and one second-home sale is exempt in a lifetime.
- Letting expenses are deductible and losses carry forward five years, so the tax falls on net income.
- The 3% transfer fee, 5% VAT on new homes and the roughly 3% municipal tax on rent are unchanged.
What to check before you reserve
- Whether the executive regulations have been published, and what they say about deductions and the holding period.
- Your likely total income from 2028 on Oman's definition: salary, net rent and any planned sale.
- Whether the price you have been quoted includes 5% VAT.
- How your home country taxes rent and gains from Omani property.
- The full purchase cost for the specific home, starting from the Oman property price table and the steps in our buying guide.
Frequently asked questions
Is rental income taxed in Oman today?
Not by income tax. Until 2028 the only levy on rent is the municipal tax of around 3% of gross rental income. From 1 January 2028, rent also counts towards the OMR 42,000 income tax threshold.
Will I pay tax when I sell my home in Oman?
Selling the home you live in is exempt once you have held it long enough, reported as about two years. One sale of a second home is exempt in a lifetime. Other property sales count towards the threshold from 2028.
Does the income tax apply to foreign owners?
The law applies to individuals, Omani and expatriate, whose annual gross income is above OMR 42,000. How it applies to an owner who lives outside Oman depends on the regulations and on where you are tax resident, so take advice before relying on a general answer.
Is there still no capital gains tax in Oman?
For individuals that remains true until the end of 2027. From 2028, proceeds from selling real estate are a listed source of income, apart from the primary-residence and one-off second-home exemptions.
