Taxation of property in Georgia

The objects of taxation by property tax are owned:

• real estate;
• cars;
• boats, yachts;
• aircraft.
• property received from a non-resident on lease;
• property on the entrepreneur's balance sheet (fixed assets), including those leased.

Taxpayers are property owners (individuals and legal entities). And in relation to leased property, the payers may be lessees or lessors - entrepreneurs.

Procedure for declaring and paying tax
The tax period is a calendar year (clause 1, article 205 TC G). Property tax is calculated by the tax authority on the basis of a declaration that an individual must submit no later than November 1 of the current year (clause 11, article 205 TC G).
Such a declaration indicates the property from which, taking into account the applicable benefits, a tax payable arises. In this case, if the taxpayer does not submit a declaration, it is considered that the tax is payable in the same amount that was calculated for the previous year. Otherwise, it is necessary to submit a declaration or inform the tax authority about the application of the benefit (clause 13, article 205 TC G).
In addition, a declaration does not need to be submitted in respect of land plots if the tax is calculated by the tax authority based on data from the National Public Register. In this case, the tax is paid on the basis of the received tax claim (clause 13¹, article 205 TC G).
The tax is payable by individuals no later than November 15 of the current year (clause 14, article 205 TC G).

Tax calculation
As mentioned above, the calculation of property tax is carried out by the tax authority in accordance with the procedure established by the Minister of Finance of Georgia.
The annual tax rate for individuals depends on the income received by the taxpayer's family during the tax year, and is (Clause 5, Article 202 TC G):

• from 0.05% to 0.2% of the market value of the property at the end of the year - for families with an income of up to 100,000 GEL;
• from 0.8% to 1% of the market value of the property at the end of the year - for families with an income of 100,000 GEL or more.

At the same time, the family income consists of the following components (clause 6 of article 202 TC G):
1) accrued salary;
2) other income not related to economic activity;
3) income from economic activities (except for the activities of persons with the status of a small business);
4) the following incomes of persons with the status of a small business:

• 25% of income taxable within special regime;
• other income not taxed in a special regime;

5) the following income of persons engaged in trade at the fair:

• 15% of income from the sale of goods at the fair;
• other income not related to trade at the fair.

A number of incomes are not included in the family income, in particular (clause 7 of article 202 TC G):

• the value of property received from a family member by inheritance, on the basis of a gift or divorce;
• income from the sale of housing (houses) owned for more than 2 years;
• income of a flat-tax payer and a person with the status of a micro business (in terms of income from such a business).

It is important to note that if a citizen of Georgia is a non-resident, then only income from sources in Georgia is taken into account for tax purposes.

If the property was owned for less than a year, then the tax is calculated in proportion to the time of ownership (clause 9, article 202 TC G).

There are a number of exemptions from property taxation, in particular (clause 1 of article 206 TC G):

• if the family income during the year does not exceed GEL 40,000, then property (except for land) is exempt from taxation;
• property for the provision of hotel services (the benefit is valid until 01.01.2026);
• land jointly owned by individuals living in apartment buildings;
• agricultural land plots with an area of up to 5 hectares, which, as of March 1, 2004, were owned by an individual;
• land plots of high-mountainous settlements belonging to persons permanently residing there;
• newly developed agricultural lands within 5 years after receiving such lands;
• property leased from a resident of Georgia.
• if the lands are located in the occupied or adjacent territories, - on the basis of a relevant certificate from the executive body of the municipality.

At the same time, exemptions from tax in relation to land plots do not apply in the case of transfer of land for rent, lease, or other similar form (clause 2 of article 206 TC G).