Taxes on Buying and Owning Real Estate in Georgia

Real estate in Georgia has no single "ownership tax": instead, different taxes arise at different moments: when buying a new-build, every year while the property is owned, when selling it, and when renting it out. The rates and rules differ for each of these moments, and mixing them up is a common cause of miscalculations among foreign buyers.

VAT When Buying a New-Build

VAT in Georgia is 18%, but not every buyer pays it. The tax applies only where the seller is engaged in economic activity: a developer selling apartments in a new building. A secondary-market purchase between two individuals is not subject to VAT at all, even if the seller is selling more than one apartment.

One more nuance: a developer's listed price usually already includes VAT, so the tax is not added on top at the time of the deal. The formula for checking exactly how much VAT is already baked into the price: the price divided by 1.18, multiplied by 0.18.

The tax authority does all calculations in GEL, so for a deal in dollars or euros, the amount is converted at the National Bank of Georgia's exchange rate on the date of the transaction.

Annual Property Ownership Tax

While a property is owned, a property tax and a separate land tax can be assessed each year. Annual family income determines whether property tax in Georgia applies at all: since 30 September 2026, only families that earned more than 100,000 lari in the previous year pay it, at 0.8% to 1% of market value. Legal entities pay up to 1% of the average annual residual book value; the local council sets the exact rate.

What matters here is simply this: this tax is unrelated to both the VAT on purchase and the tax on sale discussed below; it is a separate, standalone obligation tied to the fact of ownership itself.

Tax on Sale: Holding Period Decides Everything

The rule worth remembering first: if residential property has been owned for more than 2 years, the profit from its sale is fully exempt from income tax. The rule applies equally to Georgian tax residents and non-residents; citizenship or residence-permit status does not matter.

If the property is sold before the two-year mark, the rate depends on the type of property:

• Residential property (an apartment or a house together with the land under it): 5% of the profit.
• Non-residential property, a standalone land plot, commercial space, hotel-complex units, and the assignment of rights under a preliminary purchase agreement: 20% as ordinary income tax.

Example calculation: an apartment is bought for $80,000 and sold a year later for $100,000. The profit is $20,000. If it is residential property, the tax is 5% of $20,000, or $1,000. The same deal after two and a half years of ownership is not taxed at all, despite the exact same $20,000 profit.

A separate case is systematic resale of property as a business activity (several deals in a row, developer-style activity). Here the two-year exemption does not apply at all, and the income is taxed at 20% regardless of the holding period.

Temporarily renting out the property before selling it, or registering a legal entity at its address, does not cancel the exemption by itself: the rule targets systematic property trading, not any incidental commercial use along the way.

Tax on Rental Income

Income from renting housing to an individual is taxed at 5% of the gross amount if the landlord is registered with rs.ge. Registration is free and takes a single visit or an online application; the status then applies with no need for annual renewal. Repair, maintenance, or agency-commission expenses cannot be deducted from the base: the tax is calculated on the full rent received, not net profit.

If the landlord is not registered and the other party is a corporate tenant (for example, an office renting an apartment for an employee), the obligation to withhold the tax shifts to the tenant, and the rate rises to 20%. The income declaration for the previous year must be filed and paid by March 31 of the following year.

Costs of the Transaction Itself: A Separate Matter

The registration fee at the Public Registry and notary costs are not taxes but service fees for processing the deal; their amount and calculation method depend on how the apartment purchase in Georgia is carried out.

Keep them separate from the taxes described here: fees are paid once, when registering ownership, while taxes are charged regularly or upon a specific event, such as a sale or a rental.

Real Estate Tax Checklist

• Buying a new-build from a developer: check whether the 18% VAT is already included in the listed price.
• Buying on the secondary market from an individual: no VAT applies at all.
• Annual ownership tax: due only if family income for the previous year exceeds 100,000 lari, and calculated separately from the purchase and the sale.
• Selling before 2 years of ownership: 5% for residential property, 20% for non-residential property, land, and assignment of rights.
• Selling after 2 years of ownership: the income is fully exempt from tax, regardless of the seller's citizenship.
• Renting out: register with rs.ge and pay 5% of gross income, with the declaration due by March 31.