The costs and taxes of owning a flat in Georgia

Georgia is known for simple property rules and relatively low costs. Still, it helps to know what to budget for. The figures below are general guidance only. Rules and rates change, so always check with the Revenue Service (rs.ge) or a local tax adviser before you decide.

When you buy

Georgia does not charge stamp duty or a transfer tax on property purchases. You will pay a registration fee at the Public Service Hall, which is modest and depends on how fast you want it processed. Other costs can include a notary or lawyer, translation if needed, and an agent's fee. Many buyers budget a few percent of the price for all of these together.

While you own it

Individuals may owe an annual property tax. It is based on the market value of the property and on your family's annual income, and families with lower incomes are generally exempt or pay a very low rate. The declaration is filed through the Revenue Service portal, and the payment deadline falls in mid-November. Ask the Revenue Service or an adviser how it applies to you.

You will also pay utilities and building service charges, which vary by building. New developments often charge a monthly fee for cleaning, lifts and security.

If you rent it out

Georgian rules are favourable to landlords. Rent from a residential property let out for residential use is generally taxed at 5% of gross rent, provided you do not deduct expenses. If you choose to deduct expenses, the standard personal income tax rate applies instead. Short-term and holiday lets can be treated differently, and VAT may apply above a turnover threshold, so get advice before you start.

Whatever you earn, you should register with the Revenue Service and declare it. Landlords who skip this risk penalties.

If you sell

How a sale is taxed can depend on how long you have owned the property and whether you are a resident. Check this before you sell rather than after.

Quick budgeting tips

Add up the purchase price, registration and legal costs, fit-out if the flat is not turnkey, furniture if you plan to rent it out, and a year of service charges. Then compare the rent you expect, after tax, with what similar flats actually let for in the same district.

This article is general information, not tax or legal advice.