Property taxes in Georgia
.jpg)
Georgia is becoming an increasingly popular destination for investors and those who want to buy property for living. Among the advantages of the market are a simplified system of buying a home, affordable prices, favourable conditions for buying property in instalments and relatively low taxes. Let's consider them in this article.
In Georgia, property tax, categorised as property tax, is paid annually. It applies not only to individuals but also to legal entities owning real estate. The rate of taxation varies and depends on two factors:
- The income of the owner (for individuals).
If the annual income of the owner and his family is less than GEL 40,000 (approximately $15,000), no property tax is levied. If the income exceeds this amount, a progressive rate of 0.05% to 1% is applied. For owners who use the property only for personal use, the amount of tax is minimal.
- Type of property (for legal entities).
Companies owning commercial property pay tax at a flat rate of 1% of the market value of the property.
2. Rental income
If you plan to rent out the property, it is important to consider the tax on rental income. The rate depends on the legal status of the owner:
- Individuals. For Georgian citizens and non-residents, the tax on rental income for residential property is 5%, for commercial property - 20%. This tax is fixed and is calculated only on the amount of income received per year.
- Legal entities. Companies engaged in renting out residential or commercial premises are taxed at 15% of net profit.
3. Tax when buying real estate
There is no tax on the purchase of real estate in Georgia. That is, all transactions related to the purchase of housing are subject only to a fixed state duty for the registration of property rights.
For individuals, the registration period takes from 1 to 4 days, and the fee is GEL 157-357 (depending on the speed of registration).
This approach attracts many foreign buyers as the transaction costs are minimal.
4. Tax on property sale
If an owner decides to sell his/her property, tax is levied on the sale proceeds only in certain cases
If less than two years have passed since the purchase of the property. In this case, the income tax will be 20% for individuals.
If the property has been in possession for more than two years, there is no tax to pay. This rule applies to both Georgian citizens and foreigners.
5. Tax for non-residents
Foreigners who own property in Georgia pay the same taxes as local citizens. They are not required to pay additional fees or charges due to residency in another country.
When renting out property, foreigners also have to pay 5% of the income if they have not registered a legal entity on the territory of Georgia. In addition, you should consider possible tax liabilities in your home country if there is no double taxation treaty between your country and Georgia.
Types of real estate subject to taxation:
- Residential buildings, flats.
- Commercial property.
- Land plots.
When do I have to pay tax?
- For individuals, the tax payment deadline is usually at the end of the year. Notices are issued by local tax authorities.
- Legal entities pay the tax quarterly, during the tax year.
How can I find out the amount of tax?
This information can be obtained from the Tax Service of Georgia or, in the case of Tbilisi, from the municipality. In addition, data on the cadastral value of real estate is available from the National Agency of Public Registry (LEPL).
Where to pay the tax?
- At bank branches.
- Through online services of Georgian banks or the tax service (RS.ge - Tax Platform).
- At payment terminals (e.g. TBC Pay, Bank of Georgia).
What happens if tax is not paid?
If the tax is not paid on time, fines and penalties are accrued from the moment of delay. In case of long-term arrears, the tax authorities may impose restrictions on the property, up to a ban on sale.