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Commercial real estate in Georgia is becoming an increasingly sought‐after asset for both local and foreign investors. The total market volume has already exceeded $30 billion, with an estimated average annual growth rate of 7.5 %. In certain segments, such as Tbilisi, rental rates rose by 22 % in 2022, and the trend continued in 2023.
Who can own commercial real estate in Georgia
The property can be purchased by:
- a foreign citizen,
- an individual entrepreneur (IE) — including those with foreign citizenship.
There is no tax on the purchase of real estate in Georgia.
It is sufficient to conclude a purchase and sale agreement, which:
- does not require notarization (if the parties are present in person),
- but may be notarized at the request of the parties or with the participation of authorized representatives.
The documents are submitted to the House of Justice, where ownership is registered in the Public Registry.
Registration deadlines
- 4 business days — 150 lari,
- 1 day — 270 lari,
- on the day of submission — 350 lari.
Taxes on commercial real estate ownership
The owner of the property becomes liable for property tax if the total family income exceeds 40,000 lari per year.
The rate is set by the municipality:
- for income between 40,000 and 100,000 lari — up to 0.8 %,
- for income over 100,000 — up to 1 % of the market value of the property.
The declaration must be submitted by November 1, and the tax must be paid by November 15 of the year following the reporting year.
For more information: Property tax in Georgia 2025: who must file a tax return and how to calculate the tax amount.
Taxes when renting commercial real estate
If the property is used for economic activities, the owner pays:
- income tax (20 %),
- and, if necessary, VAT (18 %).
Income tax is calculated based on the difference between the rent and maintenance costs.
If the tenant is a company or individual entrepreneur, it acts as a tax agent and pays the tax on behalf of the landlord. If the tenants are individuals, the tax is filed by the owner independently by April 1 of the following year.
VAT is mandatory if the owner’s total income for 12 months exceeds 100,000 lari. Registration as a VAT payer is mandatory. The declaration is submitted monthly by the 15th day.
If the income falls below 100,000 lari again, the VAT payer status can be canceled from the new year.
Taxation on the sale of commercial real estate
Two taxes apply to the sale of commercial real estate:
- income tax — 20 %,
- and, if applicable, VAT — 18 %.
Situations:
- if the property was used for business purposes for less than 2 years prior to sale, income tax of 20 % of the profit (the difference between the sale price and the purchase price) is payable;
- if it was not used for more than 2 years, no income tax is payable.
If the sale proceeds exceed 100,000 lari, the seller is required to register as a VAT payer. Declaration and payment are due by the 15th day of the month following the transaction.
When you need individual entrepreneur status
It is beneficial for a foreigner who owns commercial real estate to register as an individual entrepreneur if:
- the property is planned to be leased to legal entities,
- or the seller and tenant are VAT payers.
In this case, it is possible to:
- receive an 18 % VAT deduction when purchasing the property;
- charge VAT on rent without losing attractiveness to the tenant;
- officially receive income and file tax returns online.
The “small business” regime (1 %) does not apply to the rental of real estate. Income from rent and sales is taxed at 20 % of net profit.
Can a commercial property owner obtain a residence permit?
Yes, if they are registered as a sole proprietor and their income exceeds 50,000 lari per year. This is one of the simplest and most transparent ways to obtain a residence permit for business purposes.
For more information on how to obtain a residence permit, read the ESPERO article: Georgian residence permit by sole proprietorship: detailed guide to applying for a Georgian residence permit.
ESPERO assistance: legal and tax support for transactions
ESPERO helps foreign investors acquire, register, and manage commercial real estate in Georgia.
Our services include:
- legal review of the property and contract;
- registration of the transaction in the Public Registry;
- registration of an individual entrepreneur and obtaining VAT status;
- tax consulting and declarations;
- preparation of documents for a residence permit.
Contact ESPERO if you want to safely buy or sell real estate in Georgia, obtain tax deductions, and legalize your income.