Property taxes in Oman

No Personal Income Tax or Capital Gains Tax

Oman does not impose a Personal Income Tax (PIT) on individuals, meaning rental income and profits from property sales are not taxed for individuals. Capital gains from property sales are tax-free unless derived from business activities, in which case a 15% Corporate Income Tax (CIT) applies. This benefits individual investors, especially expatriates.

Property Transfer Fee

A 3% property transfer fee, or stamp duty, is levied on the value of land or property during ownership transfers, payable to the Ministry of Housing. For example, transferring a property valued at OMR 100,000 incurs a OMR 3,000 fee, making transactions relatively affordable compared to global standards.

Municipal Taxes on Rental Income

Individual landlords in Oman are not subject to PIT on rental income due to the absence of this tax. However, a 3% municipal tax may apply to property rents, depending on local regulations. For businesses earning rental income, such as real estate companies, income is taxed at the standard 15% CIT rate, or 3% for qualifying Small and Medium Enterprises (SMEs). To claim deductions for expenses like maintenance, rental agreements must be registered with the relevant government authority.

Value Added Tax (VAT) on Properties

Oman introduced a 5% Value Added Tax (VAT) in April 2021, aligning with the Gulf Cooperation Council (GCC) framework. VAT impacts property transactions, particularly in the commercial sector, while residential properties benefit from exemptions.

VAT on Commercial Properties

Commercial property sales and rentals are subject to the standard 5% VAT rate. For example, leasing a commercial office for OMR 1,000 per month incurs OMR 50 in VAT. Businesses registered for VAT can claim input tax credits on eligible expenses, reducing their tax burden.

VAT Exemptions for Residential Properties

Residential property rentals and sales are exempt from VAT, supporting affordability for residents and encouraging investment in Oman’s housing market. For instance, renting a one-bedroom apartment in Muscat for OMR 550 per month incurs no VAT.

VAT Compliance Requirements

Businesses with annual supplies exceeding OMR 38,500 must register for VAT, while those above OMR 19,250 may register voluntarily. Nonresident businesses providing taxable supplies in Oman must register, often through a local representative. VAT returns for the first quarter of 2025 are due by April 30, 2025, with penalties for late filings ranging from OMR 500 to OMR 5,000, plus a 1% monthly additional tax on late payments. VAT records must be maintained for 10 years generally, or 15 years for real estate businesses.

Social Security and Other Contributions

While not directly tied to property taxes, social security contributions affect property businesses employing Omani nationals. Employers contribute 10.5% of an employee’s salary to the Public Authority for Social Insurance (PASI), plus 1% for work-related injury insurance, totaling 11.5%. Employees contribute 7%, bringing the total to 18.5%. Since January 2021, an additional 1% contribution from both employers and Omani employees for a job security scheme increases the total to 20.5%. These contributions apply only to Omani nationals and GCC citizens, not expatriates.