Usufruct Rights in Oman for Foreign Residents: Is It the Right Option for You?

If you have been living in Oman for several years and renewing your rental contract every year, the new usufruct system may be worth considering. However, it is not designed for every foreign resident. It comes with specific eligibility requirements, legal limitations, and practical advantages that suit certain situations more than others.

This guide will help you determine whether Usufruct Rights in Oman for Foreign Residents are the right fit for your personal circumstances.

What Do Usufruct Rights in Oman Give You?

The main practical benefit of the Oman usufruct system is replacing an annually renewable rental agreement with a long-term legal right that can last for up to 99 years. Instead of paying rent every year, with the possibility of higher rents or non-renewal, you make a one-time investment in exchange for long-term residential security. Legally, you receive an official Usufruct Certificate, allowing you to:

• Live in the property.
• Use all shared building facilities.
• Obtain financing by mortgaging your usufruct rights with an approved financial institution.
• Sell or transfer your usufruct rights after four years (or earlier if your residency in Oman ends).
• Pass the remaining usufruct rights to your legal heirs.

However, the system does not grant ownership of the land, the building itself, or a permanent freehold title deed.

Who Is This System Best Suited For?

Usufruct Rights in Oman for Foreign Residents are intended for a very specific category of expatriates rather than all foreigners living in Oman.

You are likely to benefit from this system if you:

• Have held a valid Omani work residence permit for more than two years.
• Are at least 23 years old.
• Do not already own another usufruct property in Oman.
• Want long-term residential stability in an urban neighborhood close to your workplace, such as Bausher, Al Amerat, or Al Seeb.

Perhaps the most important question is how long you expect to remain in Oman. If you plan to stay for many years, purchasing usufruct rights may be financially more attractive than paying rent indefinitely. However, if you expect to leave Oman within three or four years, the four-year resale restriction alone may make this option unsuitable.

Read also: The Difference Between Freehold Ownership and Usufruct Right in Oman

Restrictions You Should Know Before Buying

Before purchasing under the usufruct system, it is important to understand its legal limitations.

One Unit Only

Each eligible foreign resident may hold usufruct rights for only one residential unit throughout Oman. If you intend to expand your property portfolio in the future, this framework will not accommodate that goal.

Four-Year Transfer Restriction

You cannot sell the property or transfer your usufruct rights until four years have passed from the purchase date.

The only exception applies if your legal residency in Oman ends before that period. Although this provides a legal exit mechanism, it may not always be financially advantageous.

8% Transfer Fees

The transaction also involves relatively high transfer costs:

• Seller: 3%
• Buyer: 5%

These fees are significantly higher than those typically associated with freehold ownership and should be considered when calculating your total investment.

Areas Where the Usufruct System Applies in Muscat

During its initial implementation phase, the usufruct system is limited exclusively to Muscat Governorate and only within specifically designated urban neighborhoods.

Al Amerat

• Al Amerat Al Hashiyah – Phase 1

• Madinat Al Nahda – Phases 2, 3, 4, and 5

• Al Amerat Al Mahj – Phases 1 and 2

Bausher

• Bausher – Phases 1, 2, and 3

• Al Misfah – Phase 2

• Ghala Heights – Phases 1 and 2

• Al Wattayah (Bausher) – Phase 2

• Al Khuwair – Phase 2

Al Seeb

• Al Mawaleh 5

• Al Khoud 2

• Al Maabilah – Phase 7

These areas form a closed list under the first phase of implementation. Buildings located outside these designated neighborhoods cannot register units under the usufruct system for foreign residents, even if they satisfy all other legal requirements. The government may expand the eligible areas during future implementation phases.

Read also: Foreign Freehold Property Ownership in Oman: June Updates

Building Requirements for Eligible Properties

Location alone is not sufficient. To qualify, the building must also satisfy several legal conditions:

• The building must be fully completed and have an official Completion Certificate.

• It must be no more than four years old from the date of that certificate.

• It must contain at least four residential floors.

• The apartment must include a minimum of two bedrooms with the required facilities.

• Foreign ownership within the building may not exceed 40% of total units.

• No single nationality may own more than 20% of the building's units.

In practice, these conditions significantly narrow the number of eligible properties. Not every apartment building in Bausher or other approved areas qualifies. The building must be relatively new, sufficiently large, and officially approved by the Ministry of Housing and Urban Planning for sale under the usufruct framework.

Ultimately, Usufruct Rights in Oman for Foreign Residents are neither a replacement for freehold ownership nor a substitute for renting in every situation.

Instead, they provide a third option for expatriates seeking genuine long-term residential stability in established urban neighborhoods, with a lower financial commitment than purchasing freehold property in an Integrated Tourism Complex (ITC), while offering considerably greater legal security than continuously renewing annual rental contracts.

At Imtilak Global, our local property specialists help you evaluate whether the usufruct system matches your residency status, budget, and long-term plans in Oman. We also compare it with freehold opportunities in ITCs and Future Cities so you can make an informed decision before committing to any investment. Your consultation is completely free.

Frequently Asked Questions

Can I finance the purchase of usufruct rights through a bank?

Yes. Usufruct rights may be mortgaged to approved financing institutions, allowing buyers to obtain financing and spread the purchase cost through monthly installments rather than paying the full amount upfront.

What happens to my usufruct rights if I pass away before the term expires?

Under Omani law, the remaining usufruct rights are transferred to your legal heirs. They do not automatically revert to the original owner or the government.

Can I rent out a property that I acquired through usufruct rights?

The beneficiary is entitled to use and benefit from the property. However, whether the unit may be leased to third parties should be verified in the purchase agreement with the licensed real estate brokerage, as contractual restrictions may apply.

Will the usufruct system expand beyond Muscat?

Yes. The current framework represents the first phase and is limited to Muscat Governorate. The Ministry of Housing and Urban Planning has announced that future phases are expected to include additional areas in other governorates, subject to planning regulations and eligibility criteria.