The allure of Georgia’s vibrant cities, scenic landscapes, and strategic location between Europe and Asia has made it a prime destination for real estate investment. Whether you are a foreign investor eyeing a high-rise apartment in Tbilisi or a local looking for a serene retreat in the Georgian countryside, understanding the rules and regulations governing real estate transactions is crucial. This article provides a comprehensive guide to purchasing property in Georgia, offering insights into legal requirements, market dynamics, and practical considerations.
In this article, we will consider navigating the rules for purchasing real estate in Georgia. And real estate expert Alexander Chikovani, who has a lot of experience in this matter, will help us in this.
The legal framework: a gateway for investors
Ownership rights and legal protections
Georgia’s real estate market is notably open to foreign investors, offering a level of access that is uncommon in many other countries. Foreigners are allowed to purchase, own, and sell property in Georgia with minimal restrictions, except for agricultural land. The country’s liberal property laws are designed to attract international investment, providing strong legal protections for property owners.
One of the most significant aspects of Georgia’s real estate laws is the clarity of property rights. The government has established a robust legal framework that includes well-defined ownership rights, clear property titles, and a transparent registration process. This framework has been a key factor in building investor confidence and fostering a dynamic real estate market.
Registration and documentation
Property registration in Georgia is a straightforward process, facilitated by the National Agency of Public Registry (NAPR). The agency operates an electronic registration system that ensures efficiency and transparency. Upon purchasing a property, the buyer is required to register the transaction with the NAPR, which then updates the property title to reflect the new ownership.
The registration process typically involves the following steps:
- Preliminary Agreement: The buyer and seller sign a preliminary agreement, which outlines the terms of the sale.
- Due Diligence: The buyer conducts a due diligence process to verify the property’s legal status, ensuring there are no encumbrances or disputes.
- Notarization: The final sale agreement is notarized, providing legal validation.
- Registration: The notarized agreement is submitted to the NAPR for registration, which usually takes 1-4 business days.
- Title Issuance: The NAPR issues a new property title in the buyer’s name.
Key steps in the property registration process
| Step | Description | Timeline |
| Preliminary agreement | Initial agreement between buyer and seller | 1-2 days |
| Due diligence | Verification of property status and legal checks | 3-5 days |
| Notarization | Legal validation of the sale agreement | 1 day |
| Registration | Submission to NAPR and title update | 1-4 days |
| Title issuance | Final title issuance to the buyer | Same day as registration |
Financial considerations: costs and taxes
Purchase costs and fees
When purchasing real estate in Georgia, buyers should be aware of the various costs involved in the transaction. In addition to the property price, buyers typically incur additional expenses, including:
– Notary Fees: Fees for notarizing the sale agreement, which can vary based on the property value.
– Registration Fees: A standard fee charged by the NAPR for registering the property. This fee is relatively low, making the process cost-effective.
– Legal Fees: While not mandatory, many buyers choose to hire a lawyer to assist with the transaction, particularly for complex deals or high-value properties.
– Real Estate Agent Fees: If a real estate agent is involved, their commission is usually 2-5% of the property price.
Tax implications
Georgia’s tax regime is designed to be investor-friendly, with relatively low taxes on real estate transactions. Key taxes related to property purchases include:
- Property Transfer Tax: There is no property transfer tax in Georgia, which is a significant advantage for buyers.
- Property Tax: Once the property is owned, an annual property tax is levied, calculated based on the property’s value and its intended use (residential or commercial).
- Income tax on rental income: For those purchasing property as an investment, rental income is subject to a flat income tax rate of 20%. However, if the rental income is less than GEL 100,000 annually, the rate is reduced to 5% under the simplified tax regime.
Tax overview for real estate transactions
| Tax type | Rate | Applicability |
| Property transfer tax | None | Not applicable |
| Property tax | 0.1%-1% of property value | Annually, based on property type |
| Income tax on rentals | 20% (or 5% under simplified regime) | Annually, based on rental income |
Practical considerations: what buyers should know
Choosing the right location
Location is one of the most critical factors when purchasing real estate in Georgia. The country offers a diverse range of options, from bustling urban centers to tranquil rural retreats. Key locations for real estate investment include:
- Tbilisi: The capital city is the heart of Georgia’s real estate market, offering a mix of residential, commercial, and mixed-use properties. Tbilisi is particularly attractive for investors seeking rental income, given its growing expatriate community and tourism sector.
- Batumi: Located on the Black Sea coast, Batumi is a rapidly developing city known for its modern skyline and luxury real estate projects. It is a popular choice for both domestic and international investors.
- Gudauri: For those interested in tourism and leisure properties, Gudauri offers opportunities in the winter sports sector, with ski resorts and vacation homes in high demand.
Financing and mortgages
While Georgia offers a relatively low-cost real estate market, buyers may still require financing to complete their purchases. Local banks offer mortgage loans to both residents and non-residents, although the terms and conditions may vary. Typically, mortgage loans in Georgia require:
- Down payment: A down payment of 20-30% of the property value is common.
- Interest rates: Interest rates on mortgages can range from 7% to 11%, depending on the bank and the borrower’s profile.
- Loan tenure: Mortgages are usually offered for a period of 10-15 years, with the possibility of early repayment.
Foreign buyers may face additional requirements, such as proof of income or assets in Georgia. It is advisable to consult with multiple banks to compare offers and choose the most favorable terms.
Special considerations for foreign buyers
Agricultural land restrictions
While Georgia’s real estate market is largely open to foreign buyers, there is one significant restriction: foreigners are not allowed to purchase agricultural land. This policy is designed to protect the country’s agricultural sector and ensure that land remains available for local farmers. However, foreigners can lease agricultural land for up to 99 years, providing a long-term solution for those interested in agricultural investments.
Residency and citizenship through investment
Investing in real estate in Georgia can also provide a pathway to residency and citizenship. The Georgian government offers a residency program for foreign investors who purchase property worth at least USD 100,000. The residency permit is initially granted for one year, with the possibility of renewal. After five years of continuous residency, investors may apply for permanent residency or even citizenship, subject to meeting additional requirements.
This program has made Georgia an attractive destination for investors seeking not only financial returns but also a foothold in a country with a favorable business environment and strategic location.
Conclusion
Purchasing real estate in Georgia is a relatively straightforward process, thanks to the country’s liberal investment policies, transparent legal framework, and investor-friendly tax regime. Whether you are a first-time buyer or an experienced investor, understanding the rules and regulations is essential to making informed decisions and maximizing the potential of your investment. With its diverse range of properties, growing economy, and strategic location, Georgia continues to offer compelling opportunities for those looking to invest in real estate. As you navigate the market, keep in mind the legal requirements, financial considerations, and practical tips outlined in this guide, ensuring a smooth and successful property purchase in this dynamic and welcoming country.
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.