Real estate agents have welcomed the decision to collect 5 per cent of the land value as fee on specified registrations.
However, they feared the decision taken by the Muscat Municipality to raise the government fee on registering tenancy contracts might lead to a spurt in unauthorised transactions.
The Muscat Municipality has also decided to raise the fee for rent contract registrations to 5 per cent. The additional fee might be passed on to the tenants now, as some property owners may prefer not to register the contract to avoid the 5 per cent fee, feel some observers.
Speaking to the Times of Oman, Salim Al Ghammari, a Muscat Municipal Council member, said, “Most of the real-estate contracts are not registered in the Muscat Municipality records and such a decision will definitely increase the problem.”
Al Ghammari added that many real estate owners preferred not to go for legal and approved rent contracts, allowing them to control the situation, and they could then also get the tenants to vacate the property at any time.
“The government should have thought of solving the unapproved contracts issue, instead of making the transactions more costly. Fewer property owners will now think of getting their rent contracts approved,” said Al Ghammari.
He added that decreasing the fee for registering tenancy contracts to 1 per cent could lead to a 95 per cent increase in authorised real-estate transactions, and therefore, generate more money for the government.
The decision to raise the fee was not taken by the Muscat Municipal Council, but by the Ministry of Finance through the Muscat Municipality, said Al Ghammari.
“We didn’t discuss the issue at all and I don’t know if it will be considered by the council in the coming days,” he added.
He explained that the decision was taken by the government in view of the current financial
situation.
Meanwhile, many people have raised their concerns over the rise in fees. Tawfiq Al Lawati, a Majlis Al Shura member, tweeted yesterday that the decision was taken without being referred to the council.