Taxes when buying real estate in Georgia 2025: a complete guide

Income tax on purchase

Basic taxation principles

$200,000 allowance:

Purchasing real estate up to $200,000 — tax-free
Applies to both residents and non-residents
Covers both residential and commercial property
The allowance applies to each individual transaction

Taxation above the limit:

Rate: 4% on the amount exceeding $200,000
Paid by the buyer
Payment deadline: by the 15th day of the month following the transaction

Practical calculation examples

Apartment for $150,000:

Amount within the allowance: $150,000
Tax payable: $0

Apartment for $300,000:

Allowance amount: $200,000
Excess amount: $100,000
Tax: $100,000 × 4% = $4,000

Commercial premises for $450,000:

Excess amount: $250,000
Tax: $250,000 × 4% = $10,000

Specifics for different buyer categories

Georgian residents:

Full allowance on the first purchase up to $200,000
The allowance also applies to subsequent purchases
Possibility to arrange an installment plan for tax payment

Non-residents:

Equal rights with residents regarding the $200,000 allowance
Mandatory payment within the установленный deadline
Possibility to offset/credit the payment upon obtaining residency

Income tax on sale

Taxation conditions

Holding period under 2 years:

Tax: 20% on the difference between the sale price and the purchase price
Paid by the seller
Mandatory tax filing (declaration)

Holding period over 2 years:

Full tax exemption
No filing required
Applies regardless of the profit amount

Primary (only) residence:

Tax exemption regardless of the holding period
Must be the only place of residence
Confirmed by a registration certificate

Reinvestment:

Purchase of another property within 12 months
Tax exemption on the reinvested amount
Mandatory notification of the Revenue Service

Capital gains tax calculation

Example 1 — holding period 18 months:

Purchase: $80,000 (2023)
Sale: $100,000 (2025)
Profit: $20,000
Tax: $20,000 × 20% = $4,000

Example 2 — holding period 3 years:

Purchase: $80,000 (2022)
Sale: $120,000 (2025)
Profit: $40,000
Tax: $0 (holding period > 2 years)

Property tax

Taxable property

Residential property:

Owned apartments and houses
Holiday homes and cottages
Rooms in shared apartments

Commercial property:

Offices, shops, warehouses
Industrial premises
Garages and parking spaces

Property tax rates

Base rates:

Residential property: 0.05%–1% of cadastral value
Commercial property: up to 1%
Land plots: 0.05%–1.5%

Progressive scale for residential property:

Up to GEL 40,000 of cadastral value: 0.05%
GEL 40,001–200,000: 0.1%
GEL 200,001–500,000: 0.2%
Over GEL 500,000: 1%

Practical calculations

Apartment with a cadastral value of $50,000 (GEL 130,000):

First GEL 40,000 × 0.05% = GEL 20
Next GEL 90,000 × 0.1% = GEL 90
Total tax: GEL 110 per year (~$42)

Commercial premises worth $200,000:

Cadastral value: ~ $140,000 (GEL 364,000)
Tax: 364,000 × 1% = GEL 3,640 per year (~$1,400)

Taxation of rental income

Small Business status

Eligibility requirements:

Annual turnover up to GEL 30,000 (~$11,500)
Activity: renting out real estate
Registration with the Revenue Service

Taxation:

Rate: 1% of gross turnover
Reporting: once per year
VAT: not paid
Personal income tax: not paid additionally

Standard taxation

When it applies:

Exceeding the GEL 30,000 annual limit
Willingness to operate with VAT
Large-scale rental business

Rates:

Personal income tax: 20% of net profit
VAT: 18% (once turnover exceeds GEL 30,000)

Comparison of tax regimes

Income of $15,000 per year — exceeding the limit:

Small Business status (not available):

You must switch to the standard regime

Standard taxation:

Income: $15,000
Expenses (documented): $4,000
Taxable profit: $11,000
Income tax: $11,000 × 20% = $2,200
VAT: $15,000 × 18% = $2,700
Total taxes: $4,900

Special tax regimes

International IT company status

For IT activities:

Personal income tax: 0%
Corporate profit tax: 0%
VAT on exports: 0%

Requirements:

Turnover from IT services of at least GEL 200,000 per year
At least 80% of IT services must be exported
Staff of at least 3 people

“International Financial Company” program

Benefits:

Corporate profit tax: 0%
Dividend withholding tax: 5%
Employee income tax: 5%

Requirements:

Minimum investment: $500,000
Job creation
Compliance with international financial center criteria

Tax filing and reporting

Filing obligations

Residents:

Declare income from all sources
Filing deadline: by April 15
Income from the sale of real estate is included

Non-residents:

Declare only income earned in Georgia
Rental and real estate sale income
May file via a representative

Penalties for violations

Late filing of a tax return:

Up to 30 days late: GEL 50
30 to 90 days: GEL 100
Over 90 days: GEL 200 + 0.07% per day

Non-payment of taxes:

Late interest: 0.07% per day of delay
Penalty: 25% of the unpaid tax amount

International taxation

Double taxation treaties

Treaties in force:

Russia, Ukraine, Belarus
EU countries
USA, Canada
China, Turkey, etc.

How it works:

Taxes paid in Georgia can be credited in the country of tax residence
The higher of the tax rates is applied
A tax residency certificate is required

Specifics for Russian tax residents

Obligations in Russia:

Declaration of all foreign income
Personal income tax: 13% on worldwide income
Credit for taxes paid in Georgia

Calculation example:

Rental income in Georgia: $10,000
Tax in Georgia (1% under Small Business status): $100
Tax in Russia: $10,000 × 13% = $1,300
Additional tax payable in Russia: $1,300 - $100 = $1,200

Tax planning and optimization

Legal ways to reduce taxes

When buying:

Buying multiple properties, each priced under $200,000
Registering purchases in the names of different family members
Staged purchases using available allowances

When selling:

Holding for more than 2 years to avoid tax
Structuring as a primary (only) residence
Reinvesting profits into other real estate

When renting out:

Using Small Business status if income is up to $11,500/year
Keeping documentary proof of all expenses under the standard regime
Spreading income across multiple properties

Structuring through Georgian companies

Advantages:

Corporate profit tax: 0% when profits are not distributed
Ability to purchase land
Professional asset management

Conditions:

Small Business status: up to GEL 200,000 turnover per year
If exceeded: 20% corporate income tax or 1% of turnover

Practical recommendations

Paperwork and record-keeping

Required documentation:

All purchase and sale agreements showing the real prices
Documents confirming expenses
Certificates of taxes paid
Bank statements for all transactions

Choosing a tax consultant

Selection criteria:

Experience with real estate matters
Knowledge of international taxation
Positive client reviews
Accreditation with the Chamber of Auditors

Service costs:

Consultation: GEL 50–150/hour
Annual tax return preparation: GEL 200–500 per year
Comprehensive support: GEL 1,000–3,000 per year

Tax law changes in 2025

Planned changes

Under development:

Raising the Small Business status threshold to GEL 50,000
Additional incentives for long-term investors
Simplifying procedures for non-residents

Digitalization:

Electronic filing for all tax returns
Automatic tax calculation
Integration with banking systems

Impact on investors

Positive changes:

Reduced administrative burden
Expanded incentives for investors
Improved tax authority services

Conclusion

Georgia’s tax system remains one of the most attractive in the world for real estate investors. With proper planning, the tax burden is minimal and the procedures are as simple as possible.

Key advantages:

$200,000 allowance on every purchase
No tax when holding a property for more than 2 years
Small Business status: only 1% on rental income
Liberal foreign-exchange rules

Optimization formula:
Knowing the incentives + Proper planning + Professional support = Minimum taxes

Practical tips:

Explore all available incentives and exemptions
Plan the timing of buying and selling real estate
Keep detailed records of all transactions
Consult qualified tax advisors

If you comply with all requirements and use the available incentives, the effective tax rate on real-estate income in Georgia can be 1–5%, making the country one of the most attractive destinations for international real estate investment.

Article prepared by: certified tax consultants of Georgia
Legislative framework: актуальна на сентябрь 2025 года
Recommendation: obtain a personalized consultation for your specific situation

Taxes when buying real estate in Georgia: a comprehensive reference guide for 2025