Last updated on August 30th, 2024 at 09:06 am
Georgia’s real estate market has been a topic of growing interest for both local and international investors. With its unique geographical location, liberal property laws, and vibrant economic growth, Georgia offers numerous opportunities for those looking to invest in property. However, navigating this market can raise several questions, particularly for first-time buyers or foreign investors. In this article, we address some of the most frequently asked questions about real estate in Georgia, providing detailed answers backed by statistics and expert insights.
In this article, we will consider all questions and answers on real estate in Georgia. And real estate expert Alexander Chikovani, who has a lot of experience in this matter, will help us in this.
What are the key considerations when buying property in Georgia?
Understanding the market
When considering a real estate purchase in Georgia, it’s crucial to understand the market dynamics. The real estate market in Georgia has seen steady growth over the past decade, driven by urbanization, tourism, and foreign investment. Key cities like Tbilisi and Batumi have become hotspots for both residential and commercial property investments.
The market is characterized by a mix of new developments and older Soviet-era buildings, offering a range of options for buyers. The average property price in Tbilisi, for example, has increased from approximately USD 750 per square meter in 2015 to over USD 1,100 in 2023, reflecting the growing demand and development in the city.
Average property prices in Tbilisi (2015-2023)
| Year | Average price (USD/sq.m.) |
| 2015 | 750 |
| 2018 | 900 |
| 2023 | 1,100 |
Location
Location is a critical factor in determining the value and potential return on investment. Tbilisi, the capital, is the most popular location for real estate investment, offering a mix of modern apartments, historic homes, and commercial spaces. Batumi, known for its seaside resorts and casinos, is another popular destination, particularly for those looking to invest in tourism-related properties.
In addition to urban centers, there are opportunities in rural and mountainous regions, particularly for those interested in eco-tourism or agricultural investments. However, these areas may require a more detailed understanding of local regulations, especially regarding agricultural land, which has restrictions on foreign ownership.
Can foreigners buy property in Georgia?
Legal framework for foreign investors
Yes, foreigners can buy property in Georgia with relatively few restrictions. The country’s legal framework is designed to be welcoming to foreign investors, allowing them to own residential and commercial properties without the need for special permits. However, it’s important to note that foreign nationals are prohibited from purchasing agricultural land directly, although leasing options are available.
This open approach has attracted significant foreign investment, particularly from Russia, Turkey, and the Middle East. In fact, foreign buyers account for a substantial portion of property transactions in cities like Batumi, where nearly 30% of property sales in recent years have been to non-Georgian nationals.
Residency by investment
Purchasing property in Georgia can also provide a pathway to residency. The Georgian government offers a residency program for foreign investors who buy real estate valued at USD 100,000 or more. This program is particularly attractive for those looking to establish a long-term presence in the country, offering both temporary and permanent residency options.
Residency by investment requirements
| Investment amount (USD) | Residency type | Duration |
| 100,000 | Temporary residency | 1 year (renewable) |
| 300,000 | Permanent residency | Indefinite |
What are the costs and taxes involved in buying property?
Purchase costs
When buying property in Georgia, it’s important to factor in additional costs beyond the purchase price. These can include:
- Notary fees: Typically range from 0.1% to 0.5% of the property value.
- Registration fees: A flat fee for property registration, generally around GEL 50-100.
- Legal fees: Optional, but recommended, especially for foreign buyers. Legal fees can range from USD 500 to USD 1,500 depending on the complexity of the transaction.
- Real estate agent fees: If an agent is involved, the fee is usually 2-5% of the purchase price.
Tax implications
Georgia’s tax regime is relatively straightforward and favorable to property owners. Key taxes include:
- Property tax: An annual tax of 0.1% to 1% of the property’s value, depending on the location and use of the property.
- Income tax on rental income: A flat tax rate of 20% on rental income, although a reduced rate of 5% applies for rental income below GEL 100,000 annually under the simplified tax regime.
What are the risks associated with real estate investment in Georgia?
Market fluctuations
Like any real estate market, Georgia’s market is subject to fluctuations influenced by both local and global economic conditions. While the market has shown resilience and growth, it’s important for investors to consider potential risks, such as economic slowdowns, changes in government policy, or geopolitical tensions in the region.
Legal and regulatory risks
While Georgia has made significant strides in improving its legal framework, it’s still crucial to conduct thorough due diligence before purchasing property. This includes verifying the property’s legal status, ensuring clear title ownership, and understanding any local zoning laws or building regulations that may affect the property’s use or value.
What Is the process for selling property in Georgia?
Selling as a foreigner
Foreigners can sell property in Georgia without significant restrictions. The process is similar to buying, with the main steps involving finding a buyer, signing a sale agreement, and registering the transfer of ownership with the NAPR. It’s advisable to work with a real estate agent to navigate the market and secure a good deal.
Tax considerations for sellers
When selling property, it’s important to be aware of potential tax obligations. If the property is sold at a profit, capital gains tax may apply, particularly for properties sold within two years of purchase. However, Georgia offers exemptions for long-term investments, with no capital gains tax on properties held for more than two years.
Conclusion
Investing in real estate in Georgia offers numerous opportunities, but it also comes with important considerations and potential risks. By understanding the market, legal framework, and financial implications, both local and foreign investors can make informed decisions that align with their investment goals. Whether you are looking to buy, sell, or simply explore the market, the insights provided in this article aim to guide you through the complexities of Georgia’s real estate landscape, ensuring a successful and rewarding investment experience.
Author biography
Alexander Chikovani is a leading Georgian real estate expert, renowned for his innovative strategies, market insights, and contributions to Georgia’s urban development. He’s a key figure in shaping the country’s real estate landscape.
Dariel Campbell is currently an English instructor at a university. She has experience in teaching and assessing English tests including TOEFL, IELTS, BULATS, FCE, CAE, and PTEG. With over a decade of teaching expertise, Dariel Campbell utilizes his knowledge to develop English lessons for her audience on English Overview.
