Introduction
The relatively low taxes on property ownership in Georgia surprise many Expats. Taxes associated with property ownership are one of the most popular topics we cover in our free consultations. In this article, we outline the taxes (and other costs) that you need to know about when buying property in Georgia.
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Last updated on February 17th, 2025. The information provided may no longer be accurate, so we recommend checking official sources for the latest updates. If you need assistance, feel free to contact us.
Stamp Duty / Purchase Taxes
Surprisingly for many foreign investors, there is no Stamp Duty or equivalent tax to pay when purchasing Real Estate. Other than the actual purchase price that you pay for the property, other costs associated with the property purchase are extremely low.
The cost of registering a property is only 50-200 GEL (20-80 USD) depending on how quickly you want it processed. There are no hidden costs.
Annual Property Tax
Annual property tax in Georgia is related to the locality (municipality) you purchase in. As outlined in Chapters XXIX & IX of the Tax Code of Georgia, the amount of property tax is 1% of the appraised property value at most. In many cases (depending on the municipality in question, as well as your annual household income) it is much less than that.
Households with annual income below 40,000 GEL are exempt from annual property tax. Where annual income is between 40,000 GEL and 100,000 GEL, the tax is payable at rates ranging from 0.05% to 0.2% of the appraised value of the property. Above 100,000 GEL, the rates range from 0.8% to 1%.
Capital Gains Tax (CGT)
If you decide to sell your property within two years of buying it, you incur just a 5% income tax on capital gains. There is no tax on capital gains if you decide to sell after two years have elapsed.
If investing in off-plan properties, it’s important to know that you are not the official owner of the property until it’s handed over to you by the developer. For CGT purposes, ownership of the property commences when your name is registered on the property extract.
Rental Income Tax
Rental income is treated at the standard income tax rate of 20%. However, if you register as a landlord, you pay just a 5% tax on your gross rental income on residential lettings. It’s 20% on Commercial lettings. There’s no limit on the number of residential properties you can own to avail of the reduced 5% tax rate, as a registered landlord.
Other Costs
Aside from taxes, there are a few other costs to consider when purchasing property in Georgia.
Legal fees
Legal fees include, but are not limited to:
Due Diligence – Renewing the property extract. Checking the owner’s background: listings in the debtor’s registry, ownership of other immovable property by the seller, ownership of shares in a Georgia company by the seller. Identifying the characteristics of the property (i.e., address, area). Checking registered legal defects (liens, mortgages, restrictions, obligations, etc.). Checking the signatory’s Power of Attorney (if the agreement is signed by a third party). The typical cost is 300 GEL.
Preparing/Review Registration Documents – namely deposit/pre-purchase agreement and/or purchase agreement. Using our agreement costs 600 GEL, while the fee for the review of someone else’s agreement depends on the length of the agreements to be drafted/reviewed.
Representation before the seller – Negotiating terms of the sales agreement on your behalf. Organizing procedure of the payment and property registration. The typical cost is 300 GEL per hour.
In-person Assistance with the registration – accompanying the client to the Public Service Hall, bank, or notary. Signing in the capacity of a translator. Government fee for 4 business day transfer of title procedure (same day and 1 business day transfer are extra). The typical cost is 600 GEL.
Power of Attorney (PoA) – for many investors, their time may be quite limited. Coming to Georgia in person for many weeks to follow the whole selection and then the purchase process, is simply not practical. This makes the use of a PoA to complete your purchase an attractive option. A PoA needs to be drafted by a lawyer, translated to English (so you know what you are signing), and notarized at a Notary’s office. The typical cost is 400 GEL for a Local PoA and 600 GEL for a foreign PoA.
So, depending on the range of services required, legal fees can cost up to 2,000 GEL.
Property Inspection & Appraisals
Property Inspections are not commonly used in Georgia but provide peace of mind to purchasers, particularly Expats. However, costs vary depending on the condition and size of the property. A simple visual once-over by a surveyor can cost 500 GEL, whereas a detailed comprehensive inspection and report by an experienced civil engineer can cost up to 1,000 GEL.
Property appraisals are carried out by accredited & government-approved appraisers. The costs vary depending on how quickly the appraisal is required. It can be as little as 49 GEL, and the appraisal is received within 1 week. Such appraisals are used for property valuations required for the residency through property investment programs.
Sales agent fees
Sales agent fees are by far the largest cost incurred by purchasers. They are a cost paid directly by the seller/owner to a sales agent but ultimately incurred by the purchaser, as these are included in the purchase price. They are a substantial hidden cost that is often unnoticed by purchasers. Typical agent fees in Georgia are 3% of the purchase price.
Our Real Estate Purchase Assistance services are essentially everything you wish would be done by a really good Sales Agent, with the added benefit of doing even more work than any Sell-Side agent in Georgia would, being 100% aligned with your interests, and being backed and followed through by a legal team.
Conclusion
When investing in Georgia, taxes on property are an important consideration. The costs of purchasing a property in Georgia are relatively low compared with other jurisdictions. As with any investment, it is important to understand all associated costs before proceeding. There are certain unusual traits of the real estate industry in Georgia, that we cover in some detail in our Comprehensive Buyers Guide.
