How much tax do you pay when you sell property in Georgia?
For a home, usually little or nothing. An individual who sells a residential flat or house, with the land attached to it, pays 5% on the gain if they owned it for two years or less, and nothing if they owned it for more than two years. Other property, such as commercial premises, a plot of land on its own, a hotel room or the right to an unfinished flat under a preliminary contract, is taxed at the general rate of 20%, and is exempt after two years only if it was not used in an economic activity, such as letting it to a business. Since 1 January 2024 the seller declares and pays the tax by the 15th of the month after the sale, and this applies to non-residents too.
This page explains which rate applies to which property, what counts as a home after the Ministry of Finance's 2026 rulings, how the gain is calculated, when the two-year clock starts, how to declare and pay, and what happens with losses, VAT and your home country. The wider tax picture for an owner is on our page on money and taxes for a foreign buyer.
Rates by type of property
| Property sold | Owned two years or less | Owned more than two years |
|---|---|---|
| Flat or house with its land, including one that was rented out | 5% | Exempt |
| Flat still under construction, if the buyer has the basic rights to live in it | 5% | Exempt |
| Commercial premises, office or warehouse | 20% | Exempt only if not used in an economic activity |
| Plot of land on its own | 20% | Exempt only if not used in an economic activity |
| Hotel room within hotel infrastructure | 20% | Exempt only if not used in an economic activity |
| Rights under a preliminary contract, sold before registration | 20% | Exempt only if not used in an economic activity |
| Any property sold as part of systematic trading or development | 20% | No exemption for homes |
The economic-activity condition is the trap for investors in commercial property. Letting a shop or office to a business counts as using it in an economic activity, so the two-year exemption is lost however long it was owned; it comes back only two years after the economic use ended. For homes, the Ministry of Finance confirmed in May 2026 that letting the flat does not matter: the 5% rate and the two-year exemption still apply.
What counts as a home?
Public Ruling No 143 of 14 May 2026 sets four tests that a property must meet together to count as a residential flat or house. It must be an independent, individually registered unit; it must be usable for living by its status and purpose, even if it is a shell or not yet finished; it must have, or be able to have, basic utilities such as electricity, water and sewage; and it must not be a functional part of another activity. The registry entry matters, but the ruling says the actual function of the property decides. An attic or basement that serves the flat counts as part of it.
Three clarifications in the ruling matter to foreign owners. Renting the flat out, or using it as a company's registered address, does not change its residential character. A room within hotel infrastructure is not a home, even if it is sold as an apartment. And selling the right to buy a flat under a preliminary contract is a sale of a property right, not of a home. A separately registered parking space or storage room is not addressed; it is most likely treated as other property.
When a seller is treated as a business
Public Ruling No 175 of 8 June 2026 narrowed the business test. Owning homes, the number of homes, how long they are held and selling them later are not, by themselves, enough to treat a person as running a business. A sale falls outside the 5% rate and the residential exemption only when a person creates, buys or sells property as an independent and principal economic activity for regular income, such as developing buildings, trading in real estate or enforcing mortgages. Such a seller pays 20%, and VAT may also apply.
How the gain is calculated
The gain is the sale price minus the purchase price at the time ownership was created (Article 82(4)(b)). Ruling 143 adds to the purchase price the documented costs directly related to buying, creating, completing or improving the property that increase its value, so a documented renovation reduces the taxable gain. The return form introduced in 2024 already had a line for documented later costs such as renovation. We found no official guidance on whether costs of the sale itself, such as an agent's commission, can be deducted.
- Currency. Each transaction in a foreign currency is converted at the National Bank's official rate on its own day (Article 73(10)), so the purchase and the sale use different rates and the lari can raise or lower the gain.
- Price below market. The actual price is used, but the tax authority may apply a market price between related parties, or where it proves that the stated price differs from the real one (Article 18).
- No documents. Costs must be documented (Article 105(2)); without records the authority may estimate tax by indirect methods (Article 73(5)).
- Property received free. For a gift or inheritance, the starting value is the market value when it was received.
Worked examples
| Sale | Gain | Rate | Tax |
|---|---|---|---|
| Flat bought in 2023 for GEL 100,000, sold in March 2024 for GEL 120,000 | GEL 20,000 | 5% | GEL 1,000 |
| Commercial space bought in 2020 for GEL 100,000, let to a company, sold for GEL 130,000 | GEL 30,000 | 20% | GEL 6,000 |
| Flat bought for $120,000 at 2.70 (GEL 324,000), GEL 27,000 documented renovation, sold after 18 months for $150,000 at 2.60 (GEL 390,000) | GEL 39,000 | 5% | GEL 1,950 |
In the ministry's example the seller files one return for both sales and pays GEL 7,000 by 15 April 2024. The commercial space was held for four years but loses the exemption because it was let to a company. In our third example, the same flat sold after 25 months instead of 18 would be exempt; note also that in lari the gain is smaller than the $30,000 dollar gain suggests, because the lari strengthened between purchase and sale.
When the two-year clock starts and stops
- Start. From the date of the document on which your ownership was registered; if the title was never registered, from the moment ownership arose.
- Stop. The date of the document on which the transfer to the buyer is registered, in practice the sale contract, not the date of the registry entry.
- Self-built house. From its registration in the Public Registry.
- Flat received in exchange for land. From the day you own the flat, with the land's market value at transfer as the purchase price.
- Split or merged units. A divided unit keeps the original date; merged units are assessed part by part.
- Heirs and donees. A first-line heir (spouse, child, grandchild, parent) adds the testator's or donor's ownership period to their own; other heirs and donees start from their own title.
Declaring and paying
Article 153(12) of the Tax Code and the tax administration instruction, as amended from 1 January 2024, require an individual who makes a gain from selling property outside a business to file a return by the 15th of the month after the sale, on a dedicated form, and the tax is paid by the same date. The instruction names non-residents expressly. Before registering the buyer, the Public Registry notifies the seller of the duty to declare and pay (Article 153(6)). A non-resident needs a Georgian taxpayer number and access to the Revenue Service portal, or a representative with a power of attorney.
We found no rule requiring a buyer, even a company, to withhold tax from a non-resident individual seller of property; on our reading of Article 80, such gains are declared by the seller rather than taxed at source. If a buyer does withhold, the seller can file before 1 April of the following year to have the tax recalculated and the excess refunded.
To be added by the team: our accountant to confirm whether a return is needed when the whole gain is exempt, whether sale costs such as an agent's commission are deductible, how parking spaces and storage rooms are treated, and that a company buyer does not withhold from a non-resident seller.
Penalties for filing or paying late
- Late return. 5% of the tax if the return is up to 2 months late and 10% if it is later, with no fine when the tax due is zero (Article 274).
- Late payment. Interest of 0.05% of the unpaid tax for each day (Article 272).
- Understated tax. Fines of 10%, 25% or 50% of the understated amount depending on its size, and above GEL 100,000 the case can become criminal (Article 275).
Losses and VAT
A loss on a sale can only be set against a gain on an asset of the same type in the same tax year; it cannot be carried forward (Article 121(2)). A one-off sale of a home by a private individual is not subject to VAT. A non-residential building is different: its sale always counts as an economic activity for VAT, even if it happens once, and counts towards the GEL 100,000 turnover in 12 months that obliges registration and 18% VAT. A plot of land sold on its own is exempt from VAT, but land sold with its building counts as a sale of the building.
Your home country
Georgia's tax treaties generally give Georgia the first right to tax gains on property located there. The treaty with the United Kingdom, for example, says such gains "may be taxed" in Georgia and lets the UK credit the Georgian tax against UK tax on the same gain. If the sale is exempt in Georgia after two years, there is no Georgian tax to credit, and your home country may still tax the gain. Our page on double taxation treaties lists Georgia's treaties.
Selling, step by step
Check the dates
Find the date of your registration document and count two full years before you sign.
Collect the cost records
Purchase contract, payment proof and invoices for renovation.
Note the exchange rates
Record the official rate on the purchase and sale days.
File by the 15th
Submit the return and pay by the 15th of the month after the sale.
Report at home
Declare the sale in your country of residence if required.
Risks and exceptions
- Losing the exemption. Letting commercial property to a business removes the two-year exemption.
- Missing records. Without documents, renovation costs cannot reduce the gain.
- The lari. Exchange rates can create a taxable gain in lari.
- Late filing. A fine of 5% or 10% of the tax.
- Home-country tax. A Georgian exemption may not apply at home.
Frequently asked questions
Is there capital gains tax on property in Georgia?
Yes, as income tax on the gain: 5% for a home owned two years or less, 20% for other property.
Do I pay tax if I sell after two years?
Not on a home; other property is exempt only if it was not used in an economic activity.
Does renting out my flat affect the exemption?
No; the Ministry of Finance confirmed in 2026 that letting a home does not remove the 5% rate or the exemption.
When do I declare the sale?
By the 15th of the month after the sale, with payment by the same date.
Do non-residents pay the same tax?
Yes, the same rates and the same monthly return apply.
Can I deduct renovation costs?
Yes, documented costs that increase the property's value are added to the purchase price.
Is a hotel apartment taxed like a flat?
No; a room within hotel infrastructure is other property, taxed at 20% within two years.
What if I sell at a loss?
The loss can offset a gain on the same type of asset in the same year only.
Sources
- Tax Code of Georgia, Legislative Herald of Georgia (accessed 19 October 2026)
- Public Ruling No 143 on income tax on the supply of assets by an individual, Ministry of Finance of Georgia, 14 May 2026 (accessed 19 October 2026)
- Public Ruling No 175 amending Ruling No 143, Ministry of Finance of Georgia, 8 June 2026 (accessed 19 October 2026)
- Order No 497 amending the instruction on tax administration (Article 333 and return form), Ministry of Finance of Georgia, 26 December 2023 (accessed 19 October 2026)
- Georgia: individual tax administration, PwC Worldwide Tax Summaries, reviewed 2 September 2026 (accessed 19 October 2026)
- Georgia: income determination, PwC Worldwide Tax Summaries, reviewed 2 September 2026 (accessed 19 October 2026)
- Capital gains tax in Georgia, Andersen in Georgia, 9 March 2026 (accessed 19 October 2026)
- Tax obligations on the sale of residential property, Andersen in Georgia, 31 October 2025 (accessed 19 October 2026)
- The EU VAT directive and the Georgian VAT framework, Andersen in Georgia, 26 August 2026 (accessed 19 October 2026)
- Declaring income from the sale of property, REVERA (accessed 19 October 2026)
- Taxation of an individual's assets, TPSolution, 6 June 2026 (accessed 19 October 2026)
- Georgia: tax on property sales after Ruling 143, Eurofast, 4 September 2026 (accessed 19 October 2026)
- Double taxation relief order, Georgia (SI 2004/3325), UK legislation (accessed 19 October 2026)
Change log
- - Explainer published from the Tax Code, Public Rulings No 143 and No 175 of 2026, the tax administration instruction and adviser commentary.