The real estate tax in Georgia is an important component of the revenue of the state budget. The tax system is characterized and structured in such a way that it differs significantly from that used in other countries.
Features
Real estate tax was recently introduced in Georgia. It was introduced on January 1, 2015. Previously, only legal entities’ property was taxed. Georgia applies two forms of taxing real estate:
- Land tax;
- Tax on buildings.
Land tax is charged on the basis of
- The area of the landed property;
- Location;
- Class of land.
The rate varies according to purpose and may differ for agricultural, industrial and commercial land. For agricultural land it is 1% of cadastral value, for industrial land 1.5%.
The tax on buildings in Georgia is levied on the basis of the cadastral value of the real estate property. The rate of the tax varies depending on the type and category of the building. The tax on residential buildings is 0.1% of the cadastral value, on commercial buildings it is 0.2%, and on industrial buildings it is 0.3%. An indicator of the efficiency of the system of collection of the tax on buildings is related to the transition from the objective assessment of the value of the real estate object to the cadastral value.
The advantages
Georgia has become an attractive country in recent years, investments in real estate have increased. This is due to
- low taxes;
- favorable business climate;
- growing economy.
Georgia has one of world’s lowest property tax rates. Under legislation effective from 2017, the amount of tax depends on the land registry value of the property. This is lower than what investors are used to in other countries.
Property tax rates allow owners to reduce the cost of maintaining their properties. If the cadastral value of an apartment is $100,000, the annual tax will be only $100, a negligible amount compared to other countries.
How to maximize the benefits of tax incentives
Georgia has a National Agency for Geodesy, Cartography and Cadastre (NAGCC) that assesses property values. If you have decided to invest in Tbilisi real estate and buy an apartment in city, please contact the NAGCC to find out how the property is valued. Getting the right valuation helps avoid overpaying.
The country has a system of benefits for certain categories of people who own real estate in Georgia. According to Georgian legislation, pensioners are entitled to benefits when paying real estate tax. Families with three or more dependent minor children can benefit from tax exemptions.
In order to allow property owners to control their tax liabilities, Georgia is developing a system of electronic property declarations and electronic recording of tax payments.
