The Difference Between Freehold Ownership and Usufruct Right in Oman

Today, foreign buyers in Oman can acquire real estate through three different legal frameworks. Each system comes with its own eligibility requirements, target audience, ownership rights, and post-purchase benefits. Choosing the wrong option could mean buying a property that does not qualify for the residency you expected, paying additional fees you had not anticipated, or facing restrictions when selling the property.

This guide explains the three available systems and highlights the difference between freehold ownership and the right of usufruct in Oman to help you make the right investment decision.

Property Ownership Systems Available to Foreigners in Oman

Before comparing the options, it is important to understand the three legal frameworks through Foreign Property Ownership in Oman.

1. Freehold Ownership in Integrated Tourism Complexes (ITCs)

This is permanent freehold ownership in designated Integrated Tourism Complexes developed under the supervision of Omran, including Al Mouj Muscat, Muscat Hills, Yiti, Muscat Bay, and other approved ITC developments.

The scheme is open to foreign nationals of any nationality without requiring Omani residency.

2. Freehold Ownership in Future Cities and Sorouh Projects

This system grants permanent freehold ownership in approved developments supervised by the Ministry of Housing and Urban Planning, including Sultan Haitham City. It is available to foreigners worldwide, provided that:

• The property value is at least OMR 50,000.

• A minimum of 30% of the purchase price has been paid before applying for property-linked residency.

3. Right of Usufruct in Mixed Residential-Commercial Buildings (2026)

Introduced in 2026, this framework allows eligible foreigners to obtain a usufruct right for up to 99 years in completed residential apartments located in ordinary urban neighborhoods such as Bausher, Al Amerat, and Al Seeb.

Unlike freehold ownership, this system is available only to foreign residents holding a valid Omani work residence permit for at least two years.

Full Comparison of the Three Systems

Read also: RUsufruct rights for foreigners in multi-storey residential and commercial buildings in the Sultanate of Oman

The Difference Between Freehold Ownership and the Right of Usufruct in Oman

The key distinction lies in the legal nature of the rights granted.

With freehold ownership, you become the legal owner of the property through a permanent title deed. Once the project is completed, you may sell it, lease it, transfer it, or pass it on to your heirs without any time limitation. Ownership remains permanent unless voluntarily transferred.

By contrast, the right of usufruct grants the legal right to use and benefit from the property for a specified period, while the underlying ownership remains with the original owner. You cannot sell the property itself, although you may transfer your usufruct rights to another eligible party after four years. Once the agreed usufruct period expires without renewal, your rights over the property also end.

In practical terms, the difference between freehold ownership and the right of usufruct in Oman affects three major considerations:

• Resale value: Freehold properties generally command higher resale prices because ownership is permanent, whereas usufruct rights decline in value as the remaining term decreases.

• Residency eligibility: Freehold ownership is linked to a clearly established property residency framework, while residency under the new usufruct system has not yet been officially confirmed.

• Inheritance: Freehold ownership transfers full ownership to heirs, whereas usufruct only transfers the remaining usufruct period.

Read also: Obtaining residency through freehold property ownership in Sultan Haitham City

When Is the Right of Usufruct a Better Choice?

Although freehold ownership offers stronger long-term ownership rights, the new usufruct framework provides access to something previously unavailable to foreign residents: ordinary urban residential neighborhoods in central Muscat.

Areas such as Bausher, Al Amerat, and Al Seeb are close to business districts, schools, healthcare facilities, and everyday services. Before 2026, foreigners had no legal pathway to acquire long-term residential rights in these neighborhoods.

For example, an expatriate working in Bausher may prefer living nearby instead of paying annual rent indefinitely. Integrated Tourism Complexes are generally resort-style communities located farther from employment hubs and often come with higher purchase prices. The usufruct system offers long-term residential stability in a more practical location while requiring a lower financial commitment than freehold ownership, albeit without permanent ownership rights.

Ultimately, these three legal frameworks are not competing options but complementary ones. Each is designed for a different type of buyer with different objectives. One of the most common mistakes is selecting a property based solely on price or location even if it was within Freehold Areas in Oman without first confirming eligibility for the relevant ownership framework and understanding the legal rights that come with it.

At Imtilak Global, we help you identify the ownership structure that best matches your circumstances before recommending any specific project. Choosing the right property starts with choosing the right legal framework. Contact our specialists today to book your free real estate consultation in Oman.

Frequently Asked Questions

Can a usufruct contract later be converted into freehold ownership?

No. Under the current legal framework, usufruct rights in mixed residential-commercial buildings cannot be converted into freehold ownership. This is one of the most important distinctions to understand before purchasing.

Are the 8% transfer fees under the usufruct system reasonable compared with freehold ownership?

The comparison should consider the overall investment. While the combined 8% transfer fees are shared between buyer and seller, usufruct properties are generally priced lower than ITC freehold developments. However, permanent freehold ownership typically retains stronger long-term resale value than a usufruct right with a declining remaining term.

Is freehold ownership in Sultan Haitham City different from freehold ownership in Al Mouj Muscat?

Yes. The two systems are governed by different authorities. Sultan Haitham City falls under the Ministry of Housing and Urban Planning, while Al Mouj Muscat is an Integrated Tourism Complex supervised by Omran. Sultan Haitham City also requires a minimum property value of OMR 50,000, whereas no such minimum applies in Al Mouj. Property-linked residency timelines also differ, with Sultan Haitham City allowing residency applications after paying 30% of an off-plan property, while ITC developments generally require project completion.

Can I own one freehold property and another property under the usufruct system?

Yes. There is no legal restriction preventing ownership under both frameworks. However, the usufruct system limits each eligible foreign resident to one usufruct property, whereas no maximum number of units applies to freehold ownership in ITCs or approved Future Cities developments.