The Georgian budget may be replenished thanks to new tax rules, but they may cause concern among foreign investors looking to invest in real estate in Georgia.

The Georgian Tax Service is revising the rules for taxing real estate owned by foreigners who are not tax residents of Georgia. According to the new rules, foreign owners will pay a tax of 0.8-1% of the market value of the property. This applies to all foreign owners who have not filed a property tax declaration.

The tax rate depends on the income: income up to 40,000 GEL - exemption from tax; income from 40,000 to 100,000 GEL - rate of 0.05-0.2%; income over 100,000 GEL - rate of 0.8-1%.

There is a new presumption: if a foreign owner is not a tax resident of Georgia and has not filed a property tax return, his income is considered to exceed 100,000 GEL, and his property is subject to taxation at the maximum rate of 0.8-1%. More information on this can be found in the new Instruction of the Revenue Service No. 1434.

To avoid paying the maximum tax, follow these recommendations:

1. Obtain a tax number and activate the tax document.
2. Submit a property tax return and indicate your total income.