How property & rental taxes work (overview)

Georgia is one of the simplest property-tax environments in the region, and that simplicity is a big part of why it attracts foreign buyers. There is no annual “wealth tax” on property as such, no stamp duty when you buy, and the headline rates on rental income and gains are low and flat. But the rules are not zero-tax, and a few details — especially the income bands behind the annual property tax and the two-year holding rule on sales — catch owners out if they assume Georgia works like their home country.

There are four taxes a foreign owner needs to understand. The annual property tax is a municipal tax capped at 1% of appraised value, but it only applies above certain household-income thresholds. Rental income tax is 5% on residential lets if you register correctly, and 20% otherwise. Capital gains tax is a flat 5% on the profit when you sell — but only if you sell within two years of owning the property. And the cost of buying is essentially just a small registration fee, with no transfer tax or stamp duty. We take each in turn below.

Annual property tax — the income-based bands

Georgia’s annual property tax is a municipal tax, set and collected at the local level, with a national ceiling of 1% of the property’s appraised value. What makes it unusual is that liability is tied not to the property’s value alone but to your household’s annual income — and that income is counted on a worldwide basis, not just income earned inside Georgia.

The tax is structured in bands:

• Household annual income under 40,000 GEL — exempt. No annual property tax is due.
• Household annual income 40,000–100,000 GEL — the rate sits roughly in the 0.05%–0.2% range of appraised value.
• Household annual income over 100,000 GEL — the rate sits roughly in the 0.8%–1% range, up to the 1% ceiling.

Two points matter for foreign owners. First, “household income” means the combined worldwide income of the household, so a high earner abroad can fall into the top band even if their Georgian income is modest. Second, because the appraised value and exact coefficient are set municipally, the precise figure within each band depends on where the property sits. Treat the percentages above as ranges, not fixed rates, and confirm the assessed value with the local authority.

Tax on rental income — 5% residential vs 20%

If you rent out a Georgian property, the rate you pay depends heavily on how the let is structured. For residential rentals by a registered individual, Georgia offers a flat 5% personal income tax on the gross rent. There is no deduction for expenses — the 5% is calculated on the full rent received, but in exchange you avoid paperwork and a much higher rate.

The standard 20% rate applies in two situations: where the let is commercial rather than residential, and where a residential let is run on an unregistered basis without electing into the 5% regime. In other words, the 5% rate is not automatic — it is a residential-only concession that you must opt into. If you do nothing, a residential rental is exposed to the higher treatment.

How to register for the 5% rate

To access the 5% residential rate you register the rental activity with the Georgian Revenue Service and declare the income under that regime. The mechanics are straightforward, but they must be in place before you rely on the lower rate — retroactively claiming 5% on income that was never properly declared is not something to count on. Most foreign owners handle this through a local accountant, who can set up the registration and file the periodic declarations. This is also a good moment to think about establishing Georgian tax residency if you spend significant time in the country, since residency status interacts with how your wider income is treated.

Capital gains on sale (5%) and the 2-year exemption

When you sell a Georgian property at a profit, the gain is taxed at a flat 5% — but only in a specific window. Georgia exempts the gain entirely if you owned the property for more than two years. The 5% applies only when you sell within two years of acquiring it. Hold past the two-year mark and the capital gain is tax-free.

This makes the exemption one of the most valuable features of the Georgian system for investors. A buy-and-hold owner who keeps a property for several years pays no capital gains tax at all on the eventual sale. The 5% effectively functions as a short-term-flip charge rather than a general gains tax.

When the 2-year clock starts (off-plan caution)

The holding period is measured from the date your name is registered on the property extract at the public registry — not from the date you signed a contract or paid a deposit. This distinction is critical for off-plan purchases. If you buy an apartment before it is built, your two-year clock does not start until the completed unit is registered in your name. A deposit paid three years before completion does not count toward the two years. Plan your exit timing around the registration date on the extract, not the purchase agreement.

Costs at purchase (no stamp duty)

Buying property in Georgia is unusually cheap on the transactional side. There is no stamp duty and no transfer tax on the purchase. The main cost is the registration fee at the public registry, which is modest — roughly 50–200 GEL depending on how quickly you want the registration processed. Beyond that you may pay a notary and, if you use one, an agent’s fee, but the state takes essentially nothing on the transfer itself. For the full process, see the full guide to buying property as a foreigner.

Foreign-source property income & the territorial principle

Everything above concerns property located in Georgia. If you own property abroad and earn rent from it, Georgia’s territorial tax system generally treats that as foreign-source income, which is taxed very differently. We cover the mechanics in detail in our guide to how Georgia’s territorial system taxes foreign-source income, and for larger portfolios in our pieces on high-net-worth tax residency and broader tax-optimisation strategies for Georgia.

Summary table

Tax event	Rate
Residential rental income (registered individual)	5% of gross rent
Commercial or unregistered rental income	20%
Capital gain on sale within 2 years	5% of the gain
Capital gain on sale after more than 2 years	0% (exempt)
Annual property tax	Up to 1% of appraised value, banded by household income
Purchase / transfer tax	0% (only a 50–200 GEL registration fee)

Frequently asked questions

Do I pay annual property tax if I’m a low earner?

If your household’s worldwide annual income is under 40,000 GEL, you are exempt from the annual property tax. Above that, the rate rises in bands up to a maximum of 1% of the property’s appraised value.

How do I get the 5% rate on rental income instead of 20%?

The 5% rate is a residential concession you have to opt into by registering the rental activity with the Revenue Service and declaring the income under that regime. Commercial lets, and residential lets that are never registered, are exposed to the 20% rate.

Will I pay capital gains tax when I sell?

Only if you sell within two years of the property being registered in your name. The gain is taxed at a flat 5% in that window. Sell after more than two years and the gain is completely exempt.

When does the two-year clock start for an off-plan apartment?

From the date the completed unit is registered in your name on the public registry extract — not from when you signed the contract or paid a deposit. For off-plan purchases this can be years after your first payment.

Disclaimer: This article is general information, not tax or legal advice. Rates, income bands and municipal coefficients can change and depend on your individual circumstances. Confirm your position with a qualified Georgian tax adviser before acting.