Tax on property income in Georgia
May 16, 2017
Effective Tax Rate on Rental Income
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Global Property Guide research
Georgia applies a territorial tax system for individuals. Nonresidents are taxed on their Georgian-sourced income. Married couples are taxed separately. Each registered individual taxpayer must file a separate return but families and married couples may elect file joint property tax returns.
Nonresident individuals are taxed at a flat rate of 20%.
Nonresidents earning rental income is generally taxed at a flat rate of 20%.
Nonresidents leasing out residential property may be taxed at a flat rate of 5% on the gross rent.
Capital gains realized from the sale of a residential apartment or house with attached land plot is taxed at a flat rate of 5%.
Capital gains realized from sales of properties connected with business activities are taxed at a flat rate of 20%.
Property tax is a local tax levied on the market value of properties, excluding land. The property tax rate varies according to the amount of annual family revenue of the individual. The exact rate within the range is fixed by the local government where the property is located.
|TAX BASE, GEL (€)||TAX RATE|
|Up to 40,000 (€14,286)||0%|
|40,000 – 100,000 (€35,714)||0.05% - 0.20%|
|Over 100,000 (€35,714)||0.80% - 1.00%|
|Source: Global Property Guide|
The rates are not progressive. The applicable tax rate applies on all property subject to property tax.
Land tax is levied at different rates, depending on the land classification and the location.
For land used for economic activities, including leases), land tax is levied at a flat rate of GEL0.24 (€0.10) per sq. m. The rate is further adjusted by territorial coefficients at a maximum of 1.5.
For agricultural land, land tax rates vary according to the administrative unit and land quality. The tax rate varies from GEL1.50 (€0.53) to GEL100 (€36) per one hectare. The rate is further adjusted by a territorial coefficient at a maximum of 150%.
Income and capital gains earned by companies is taxed at a flat income tax rate of 15%. Taxable income is calculated as the difference between gross profits and income-generating expenses.