Below is who pays property tax, how the rate is set, and when a sale triggers tax.
Who pays property tax
Both companies and individuals pay property tax, under different rules. Citizenship makes no difference: the Tax Code refers to an individual who owns the property, without separating Georgian citizens from foreigners.
Companies pay tax on fixed assets and investment property on their balance sheet, at a rate of up to 1% of the average annual net book value.
Individuals pay tax on real estate, including unfinished construction, and on yachts (motor boats), helicopters, planes and passenger cars. But the main condition for exemption is tied to family income, not to the property itself.
The GEL 40,000 threshold uses last year's income
The exemption applies if the family's income for the year before the tax year did not exceed GEL 40,000. It covers all of an individual's taxable property except land: the exemption does not extend to land.
Family income includes all income, including income that is exempt from tax. Some items are left out, for example property received from family members by inheritance, as a gift or on divorce, and income from selling a home owned for more than two years.
How the rate is set
The rate depends on family income and is applied to the property's market value at the end of the tax year. Two different years matter here: the exemption threshold looks at the previous year, while the rate is set by income for the current tax year.
| Family income for the tax year | Rate on market value |
|---|---|
| up to GEL 100,000 | 0.05% to 0.2% |
| GEL 100,000 and above | 0.8% to 1% |
Property tax in Georgia is a local tax. The exact rate within these limits is introduced by the municipality's representative body, the Sakrebulo, so the same flat can carry different tax in different cities.
Example: a flat with a market value of GEL 200,000 and a family income of GEL 80,000. If the municipality has set a 0.2% rate, the tax is GEL 400 a year. With income of GEL 100,000 or more, the same flat at 1% costs GEL 2,000. If the flat was owned for only part of the year, the tax is calculated in proportion to the time owned.
Individuals file the return by 1 November
An individual files the property tax return no later than 1 November, and the tax authority calculates the tax based on the return. If you have no tax liability, you do not have to file. But if you filed a return for the previous year, you must notify the tax authority by 1 November of your decision not to file.
Payment deadline and tax on land
An individual pays property tax and tax on land no later than 15 November of the calendar year. Tax on land is paid separately, on land held as of 1 April of the tax year, and the rate depends on the land category and location.
The wider picture for individuals and businesses, including income tax and dividends, is in our guide to taxes in Georgia.
Tax on selling property
For a home, the holding period decides. The Tax Code splits the sale of a residential flat or house into two cases.
Owned for more than two years. The gain from selling a residential flat or house together with the attached land is fully exempt from tax.
Owned for less than two years. The gain from selling a home and the attached land is taxed at a reduced rate of 5%, rather than the general 20% income tax rate. The tax is charged on the gain, meaning the difference between the sale price and the purchase price, not on the full amount.
A flat inherited from close relatives is not taxed
The value of property received by inheritance or as a gift by first and second line heirs is exempt from income tax. For third and fourth line heirs, the exemption applies while the value of property received during the year is below GEL 150,000.
Source note
> Article 81(3): surplus income gained by a natural person from the provision of a residential apartment (house) and of the land attached to it is taxed at the rate of 5%. > > Article 82(1)(f.a): surplus gained from the sale of a residential apartment (house) along with the land attached to it owned for more than two years is exempt from tax.
Source: Tax Code of Georgia
Non-residential property follows different rules
The 5% rate and the home exemption apply only to a residential flat or house. For non-residential property, such as an office or commercial premises, the general rule for assets applies: the gain is exempt if the property was owned for more than two years and the seller did not use it in economic activity.
Use in economic activity stops blocking the exemption if more than two years have passed between the end of that use and the sale. In other cases the gain is taxed at the general income tax rate of 20%.
So before buying, check how the property is registered, residential or non-residential. More on checking the designated use and other registry data in our guide to property due diligence before you buy, and on deals from abroad in the guide to buying or selling property in Georgia remotely.
Frequently asked questions
Do foreigners pay property tax in Georgia?
Yes, if they own taxable property and do not qualify for the exemption. The Tax Code does not distinguish individual owners by citizenship. The liability arises only if family income for the previous year exceeded GEL 40,000. Below that, no property tax is due, except on land.
How much is property tax on a flat?
For an individual, 0.05% to 0.2% of market value if family income for the tax year is up to GEL 100,000, and 0.8% to 1% if it is GEL 100,000 or more. The exact rate within these limits is set by the municipality. The tax is due by 15 November.
Do I pay tax when I sell a flat?
If you owned the home for more than two years, no: the gain is fully exempt. If less than two years, the gain is taxed at 5%. The tax is calculated on the difference between the sale and purchase price, not on the full deal amount.
Do I need to file a property tax return?
Yes, by 1 November, if you have a property tax liability. If you have none, for example because family income for the previous year did not exceed GEL 40,000, you do not have to file. But if you filed for the previous year, you must notify the tax authority by 1 November that there will be no return this year.
Does a company that owns property pay the tax?
Yes, if the property is on its balance sheet as a fixed asset or investment property. The rate is up to 1% of the average annual net book value. A company files the return and pays the tax by 1 April. The GEL 40,000 threshold does not apply to companies, only to individuals.
How Legalese handles this
We establish whether you have a property tax liability: we work out family income for the relevant period, check which assets are taxable, and calculate the tax at your municipality's rate.
On a sale, we check the holding period and the designated use of the property so you know in advance whether the gain will be taxed.
We prepare and file the property tax return for you. Details: property tax declaration.
Key points
- An individual is exempt from property tax if family income for the previous year did not exceed GEL 40,000, and the exemption does not cover land
- The rate is 0.05% to 0.2% with income up to GEL 100,000 and 0.8% to 1% from GEL 100,000, based on current-year income
- The return is filed by 1 November, and property tax and tax on land are paid by 15 November
- Selling a home after two years of ownership is tax free, before two years the gain is taxed at 5%
- The 5% rate does not apply to non-residential property, where the exemption depends on use in economic activity
To find out whether you owe tax and how much, book a free consultation.