How is property owned by a company taxed in Georgia?
In four layers. A company pays an annual property tax of up to 1% of the average net book value of its buildings, plus land tax. Once its taxable sales and rent exceed GEL 100,000 in any 12 months, it must register for VAT and charge 18%. Its profit is taxed at 15% only when it is distributed, and dividends paid to an individual or a foreign shareholder carry another 5%, about 19.25% of the profit in total. And unlike an individual, a company has no two-year exemption on the sale of a home: its gains are simply profit, taxed when they are paid out.
This page sets out each tax for a Georgian company that owns flats or commercial property, what changes when the owner is a foreign company, and what happens when property moves between an individual and a company. Whether a company is the right vehicle at all is discussed on our page on buying through a company.
Company and individual, tax by tax
| Tax | Company | Individual |
|---|---|---|
| Annual property tax | Up to 1% of average net book value | None if family income was GEL 100,000 or less; otherwise 0.8% to 1% of market value |
| Land tax | GEL 0.24 per m² times a local coefficient of up to 1.5 | Same rate; land under a block of flats is exempt for its residents |
| Rent from a home | 15% profit tax when distributed, plus 5% on dividends | 5% of the rent, without deductions |
| VAT | 18% once taxable supplies exceed GEL 100,000 in 12 months | Same threshold; a one-off sale of a home is not a VAT event |
| Gain on selling a home | Profit, taxed when distributed; no holding period | 5% within two years, exempt after |
| Returns | Monthly profit tax return, VAT if registered, annual property tax return | Return by the 15th of the month after a sale; annual return if needed |
The annual property tax
Property tax is a local tax. The Tax Code sets the ceiling and each municipal council sets the rate within it; Tbilisi charges companies 1%. For a Georgian company the tax covers fixed assets, investment property, unfinished construction and property it lets out, all as they appear on its balance sheet (Article 201). Flats held as stock for sale, rather than as fixed assets or investment property, fall outside the tax unless they are let.
- Base. The average of the net book value at the start and end of the year (Article 202(1)). Property acquired before 2000 is multiplied by 3, between 2000 and 2004 by 2, and in 2004 by 1.5, unless the company uses audited revaluations.
- Market value. In an audit the tax authority may use market value where it is higher than book value, and keep it for the next three years.
- Deadlines. The return and payment are due before 1 April of the following year, with a current payment equal to last year's tax by 15 June; land tax is paid by 15 November.
- Exemptions. Property in a free industrial zone, property of an international company other than land, and property of enterprises in high-mountain settlements. The exemption for hotel property in tourist zones expired on 1 January 2026, and most privileges do not cover buildings the company lets out.
The difference from an individual is large for a small owner. A company holding a flat with a book value of GEL 400,000 pays about GEL 4,000 a year at 1%; an individual owner whose family income was GEL 100,000 or less pays nothing on the building, although rent counts towards that family income.
VAT on rent and on sales
A company must register for VAT within 2 business days once its taxable supplies exceed GEL 100,000 in any 12 consecutive months, and charge 18% from the transaction that crosses the line (Article 165). Returns and payment are monthly, by the 15th.
- Rent. Commercial rent is taxable. We found no VAT exemption for letting homes in the Tax Code, so on our reading a VAT-registered company also charges 18% on residential rent.
- Sale of a building. Taxable at 18%, whether residential or commercial. Land sold together with a building counts as a sale of the building.
- Sale of land alone. Exempt without the right to deduct input VAT (Article 171(1)(c)), although a company may choose to charge VAT. If real estate is its main activity, exempt land sales still count towards the GEL 100,000 threshold.
- Input VAT. VAT paid to a developer on a flat can be deducted if the flat is used for taxable rent or sale (Article 175).
For a company letting several flats, rent of about GEL 8,400 a month is enough to cross the threshold within a year. From then on, either the tenant pays 18% more or the company absorbs it.
Profit tax only when profit leaves the company
Since 2017 Georgia has used the "Estonian model": a company's profit is not taxed while it stays in the business. The 15% profit tax falls on distributed profit, expenses unrelated to the business, free supplies and excess representation costs (Article 97(1)). The amount paid out is grossed up by dividing it by 0.85, so the tax equals about 17.65% of the net amount distributed. Dividends paid to an individual, a non-commercial entity or a foreign company then carry 5% withholding tax (Article 130), giving about 19.25% of the original profit in total; dividends to another Georgian commercial company are not taxed.
- In kind. A flat handed to a shareholder is a distribution valued at market price.
- Related parties. Letting the company's flat to its owner below market, or selling it to the owner cheaply, is treated as a distribution of the difference.
- Return of capital. Paying back the capital a shareholder contributed is not distributed profit.
- Monthly returns. A resident company's profit tax period is a calendar month.
A worked example
| Item | Company, profit kept | Company, profit paid out | Individual |
|---|---|---|---|
| Rent | GEL 30,000 | GEL 30,000 | GEL 30,000 |
| Costs, including property tax | GEL 6,000 | GEL 6,000 | Not deducted |
| Profit tax at 15% | 0 | GEL 3,600 | - |
| Tax on dividend or rent | 0 | GEL 1,020 | GEL 1,500 |
| Left for the owner | GEL 24,000 inside the company | GEL 19,380 | GEL 28,500 before own costs |
The individual pays 5% of the gross rent and no property tax if family income stays at GEL 100,000 or less. The company pays nothing while it reinvests, but about 19.25% of its profit when it pays it out, and property tax every year. A company owner who needs the rent to live on is usually worse off; one who reinvests for years may not be.
Foreign shareholders and foreign companies
A Georgian company with a foreign owner withholds 5% on dividends, which a tax treaty may reduce; the United Kingdom and United Arab Emirates treaties, for example, set 0% on dividends. There are no currency controls on sending the money abroad. Our page on double taxation treaties lists the rates.
A foreign company can also own Georgian property directly. Owning property alone does not create a permanent establishment (Article 29(6)), but someone managing it on the company's behalf for more than three months may, unless they are an independent agent. Rent paid by a Georgian company or business tenant is taxed at source at 10%, or 15% for companies in listed low-tax jurisdictions; rent from a private tenant, who is not a tax agent, is declared by the foreign company and taxed on the net amount (Article 97(11)). The foreign owner also pays property tax on its Georgian buildings. Selling shares in a company whose value comes mainly from Georgian real estate is Georgian-source income (Article 104(1)(m)), and most of Georgia's treaties let Georgia tax such gains.
Moving property into or out of a company
- Into the company. Contributing property to a company's capital is not a supply for VAT (Article 160(7)(b)); if the contributor is VAT-registered, the company must register within 10 days. We found no specific income tax rule for an individual who contributes a flat.
- Out of the company. Handing property to a shareholder in exchange for a share is a supply for VAT, and a distribution in kind is valued at market price for profit tax.
- On liquidation. The individual is exempt from income tax on real estate received on liquidation or capital reduction if they held the share for more than two years (Article 82(1)(z)); the company side is still taxed.
- Registration. Registering a limited liability company costs GEL 200 in one working day or GEL 400 the same day, and registering property costs GEL 150, GEL 270 or GEL 350 depending on speed.
Special regimes
An international company pays 5% profit tax and no property tax except on land, but the status is granted by the government for listed activities, and we found no sign that letting property qualifies. A tourist enterprise that sells hotel units and takes them back to operate them has its own VAT treatment and a 10-year condition, described on our page on aparthotel units. Small business status, with its 1% rate, is for individuals and does not cover letting property.
To be added by the team: our accountant to confirm VAT on residential rent charged by a VAT-registered company, the income tax position of an individual who contributes a flat to a company, and whether the September 2026 amendment changed anything for companies' property tax.
Running property through a company, step by step
Model both options
Compare the company and personal tax over your real holding period.
Register and appoint an accountant
Monthly returns start from the first month.
Classify the property
Decide whether flats are fixed assets, investment property or stock.
Watch the VAT threshold
Track rent and sales over every 12 months.
Plan distributions
Pay out profit when you need it, knowing each payment carries about 19.25%.
Risks and exceptions
- Annual property tax. A company pays it even when an individual would not.
- VAT. Rent from several flats can cross GEL 100,000 quickly.
- No two-year exemption. Gains on homes are taxed when distributed.
- Hidden distributions. Below-market dealings with owners are taxed.
- Compliance. Monthly returns mean ongoing accountant costs.
Frequently asked questions
What is the property tax rate for companies in Georgia?
Up to 1% of the average net book value of taxable property; Tbilisi charges 1%.
Do companies pay tax on rent when they receive it?
No profit tax until profit is distributed; VAT applies once the company is registered.
What is the total tax on distributed profit?
About 19.25%: 15% profit tax plus 5% on the dividend.
Does a company get the two-year exemption on selling a home?
No; that exemption is only for individuals.
Does a company charge VAT on residential rent?
If VAT-registered, on our reading yes; our accountant is confirming.
Can a foreign company own Georgian property?
Yes; rent from business tenants is taxed at source at 10%, and property tax applies.
Is it taxed if I move my flat into a company?
Not as a VAT supply; the income tax position is not settled in the Code.
What does it cost to set up a company?
GEL 200 for registration in one working day, GEL 400 the same day.
Sources
- Tax Code of Georgia, Legislative Herald of Georgia (accessed 19 October 2026)
- Georgia: other taxes, PwC Worldwide Tax Summaries, reviewed 2 September 2026 (accessed 19 October 2026)
- Georgia: corporate income determination, PwC Worldwide Tax Summaries, reviewed 2 September 2026 (accessed 19 October 2026)
- Georgia: withholding taxes, PwC Worldwide Tax Summaries, reviewed 2 September 2026 (accessed 19 October 2026)
- Georgia: taxes on corporate income, PwC Worldwide Tax Summaries (accessed 19 October 2026)
- Resolution No 20-90 on local taxes in Tbilisi, Tbilisi City Council (accessed 19 October 2026)
- Taxation of transactions between development companies and landowners, Andersen in Georgia, 12 November 2025 (accessed 19 October 2026)
- Property tax threshold to rise to GEL 100,000, Georgia Today, September 2026 (accessed 19 October 2026)
- Fees and terms, National Agency of Public Registry (accessed 19 October 2026)
- Georgia: foreign exchange controls, US Department of Commerce (accessed 19 October 2026)
Change log
- - Explainer published from the Tax Code, PwC tax summaries, the Tbilisi local tax resolution and Public Registry fees.