By November 1, 2024, individuals who owned real estate and/or vehicles in 2023 and whose annual family income in 2023 exceeded 40,000 GEL are required to file a property tax declaration and pay the tax by November 15, 2024.
The tax rate depends on the owner’s income and the location of the property and ranges from 0.05% to 1% of the market value of the property.
The declaration must be submitted through the Tax Cabinet, which requires a tax number to activate, and the tax is paid into a unified budget account - 101001000.
More Details in Q&A Format
Who is considered as a real estate owner?
An individual whose ownership rights to the property are registered in the Public Registry of Georgia. It is important to note that if you are registered as an owner, you are liable to pay the tax even if the property is under construction. If you are a prospective owner and have only signed a preliminary sales agreement with the developer, you are not yet required to pay the property tax.
Who is considered as an owner of a vehicle?
An individual who owns a vehicle registered in Georgia. This includes vehicles purchased in Georgia as well as foreign vehicles temporarily imported into Georgia and registered with temporary Georgian license plates.
What types of property are not taxed?
● Property leased from a resident of Georgia.
● Property located in areas defined by the Law of Georgia on Occupied Territories, until the conflict is resolved and the economic situation stabilizes.
● Property owned by an entrepreneur residing in a highland settlement within that territory, for 10 years following the granting of such status (including the year of status assignment).
● Other types of property as provided in Article 206 of the Georgian Tax Code.
What is family income?
The combined income of spouses, their minor children, and dependent, incapacitated family members (such as parents and other individuals under guardianship).
What income is considered for tax calculation purposes?
According to Paragraph 6 of Article 202 of the Georgian Tax Code, for property tax purposes, the taxable income of the household during the tax year includes all income, including profits without considering tax exemptions, specifically:
● Taxable income from economic activities, excluding income from micro-business entities.
● Any income, including profit unrelated to economic activities (e.g., profit from the sale of property, dividends, interest from loan agreements).
● Accrued salary (i.e., gross salary before tax deductions).
● Income of an individual with small business status, calculated at 25%.
● Full income of individuals without special statuses.
What income is NOT considered for tax calculation purposes?
According to Paragraph 7 of Article 202 of the Georgian Tax Code, the following are excluded (this list is exhaustive):
● Property received as inheritance, gifts, or as a result of divorce.
● Income from the sale/realization of the residential property (including from a first-degree heir of their or the testator’s property) owned for more than 2 years.
● Income from the initial sale of property as defined in Subparagraph "n" of Part 1 of Article 82 of the Georgian Tax Code (Note: this refers to property received as compensation by persons with refugee or humanitarian status, forcibly displaced persons in exchange for temporary housing under the privatization program; compensation provided to such persons by the state; income from the initial sale of such property).
● Income from economic activities of fixed taxpayers and individuals with micro-business status.
● Income exempt from income tax under subparagraphs "b1" and "b2" of Part 1 of Article 82 of the Georgian Tax Code (Note: b1) income from non-commercial legal entities established by the state within the framework of charitable activities; b2) income from charitable organizations for funding treatment or medical services).
● Profit received by an employee from a vehicle owned by the employer but used for personal purposes.
● Income of Georgian citizens from foreign sources.
N.B.: The list of exempted incomes is exhaustive. Total income should include pensions, dividends, loan interest, as well as material assistance from the state and private individuals, gifts, and inheritance, grants, income from the sale of property and securities, unless specifically exempted.
Should foreign-source income be considered for property tax purposes?
Yes, for property tax purposes, all income received in 2023 from both Georgian and foreign sources (except for the exclusions listed above) is considered. This rule does not apply only to Georgian citizens—their foreign-source income is not considered for property tax purposes.
What is the market value of the property and how is it determined?
The market value of the property is the price at which the property can be acquired in the open market. The owner determines the market value and indicates it in the tax declaration. The tax authority has the right to review the value indicated by the owner if it clearly does not correspond to the market value. We recommend obtaining an independent market valuation of the property or referring to public sources (including real estate and vehicle sales websites) to determine the market value.
On which date is the market value of the property determined?
As of December 31, 2023.
How does the tax rate depend on the owner's income?
● For families with incomes below 100,000 GEL—the tax rate is 0.05%-0.2% of the whole amount of unpaid tax.
● For families with incomes of 100,000 GEL or more—the tax rate is 0.8%-1% of the whole amount of unpaid tax.
Does the tax amount depend on the ownership period (if the owner owned the property for less than a year and/or was not the owner as of December 31, 2023)?
The tax is calculated in the usual manner and is charged proportionally to the period of ownership. If the owner held the property for 3 months during 2023, the tax amount is ¼ of the annual tax amount.
How is the declaration submitted?
The declaration can only be submitted electronically through the Tax Cabinet.
How to access/create a Tax Cabinet?
The Tax Cabinet is available to anyone with a tax number.
Is it necessary to attach any documents to the declaration?
No, no documents are attached at the time of filing the declaration.
What are the consequences of not submitting the declaration?
● If the property owner is a foreigner who is not a tax resident of Georgia, in the case of non-submission, the tax authority may calculate the probable amount of property tax at the maximum rate. The calculated probable tax can be contested by filing a tax declaration and submitting supporting income documents.
What are the consequences of late payment of the tax?
● A penalty of 0.05% per day of the overdue tax amount.
● If the delay does not exceed 2 months—a fine of 5% of the overdue tax amount.
● If the delay exceeds 2 months—a fine of 10% of the overdue tax amount.