Ten reasons to purchase real estate in Georgia
Georgian real estate is in high demand with foreign investors especially if it is located in such cities as Tbilisi, Batumi, Bakuriani, and Gudauri. Nearly one third of all real property sold in these cities is purchased by foreign nationals. There are multiple reasons why Georgian property is so popular with foreign investors and we will talk about those in the text below. However, the main reason to buy real estate in Georgia is the possibility to make good profits and enlarge your wealth. The stable and continuing growth of the tourism industry in the country conditions the interest in Georgia on the part of foreign investors. So, let us look at ten central reasons why you should consider purchasing some real estate in sunny Georgia.
Reason One – Affordable prices
You can buy a house or an apartment in the capital city of Tbilisi or in the seaside city of Batumi for as little as US$ 30,000. Of course, the location and the quality of the property affect its price greatly. According to the TBC Bank report from 2019, the average price of 1 square meter (a bit more than 10 sq. ft.) of residential accommodations in Tbilisi was US$ 989. The price in the most expensive district of the city – Mtazminda – started at US$ 1,100 per square meter while apartments in Gdlani, the least expensive district, started at US$ 579 per square meter.
As far as Batumi is concerned, premium property (located in the ‘first line’, that is, closest to the seashore and having advanced infrastructure) sells at US$ 1,000 per square meter minimum while prices in the least expensive districts further from the sea start at US$ 500 per sq. m.
You have to keep in mind that buying property at an early stage of construction can save you a considerable sum of money. When the house is completed and connected to all the utilities, the price goes up by 10% to 50% in comparison to what it was when the construction work only started.
Reason Two – No bureaucracy
The process of purchasing real property in Georgia is fast and transparent. Doing Business 2020 report ranks Georgia fifth out of 190 countries for the ease of property rights registration in particular.
Property rights are registered at the House of Justice or via an agent, which can be a bank, a realtor, or a notary public. The registration process takes between one and four days only. The amount of the state duty that you choose to pay has a direct bearing on the speed of property rights registration:
- 50 laris — 4 business days;
- 150 laris – 1 business day;
- 200 laris – the property rights are registered on the day of application.
Reason Three – No restrictions
Foreign nationals are allowed to purchase any real property that they like and as much of it as they want. The local legislation puts restrictions on the sale of agricultural land to foreigners but practice shows that the land reserved for agriculture can be purchased too.
All you have to have in order to buy property in Georgia is your foreign passport and the money. You can also issue a Power of Attorney to a trusted agent who will buy property on your behalf.
Many developers run expensive marketing programs in an attempt to attract more foreign customers. For instance, they often provide free transfers from the airport to the construction site for potential buyers. Batumi developers in particular organize special tours for prospective investors covering their airfare as well as their board and lodging.
Reason Four – Various ways to purchase property
Foreign nationals can pay in cash or make a bank transfer when buying real property in Georgia. Normally, if you make the payment in full, the seller will give you a discount.
Besides, you can pay for the property that you buy in installments especially if you are buying an apartment in a condominium that is under construction. The first payment usually constitutes 10% to 30% of the overall price and the rest is to be paid in equal shares every months until the day when the house is completed and fully functional.
A foreigner is also entitled for a five to ten-year mortgage if he or she wants to purchase real estate in Georgia. The most outstanding player in the mortgage market is TBC Bank that has vast experience in servicing foreign clients in particular. At the same time, the interest rate is quite high in Georgia by the international standards. It starts at 8% for US dollar loans and it starts at 10.5% for loans made in Georgian laris.
When applying for a mortgage to a Georgian bank, you may be asked to supply a security guarantee issued by a citizen of Georgia or a Georgian-based business company or other legal entity.
Reason Five 5 – Residence permit in Georgia
Until recently, a foreign citizen buying real property in Georgia that was worth minimum US$ 35,000 was entitled for a permanent residence permit. However, in 2019 the legislation was changed drastically. Now a foreign national has to buy a US$ 100,000 worth of real property thus qualifying for a temporary residence permit. The temporary residence is granted for one year but it can be prolonged on the condition that the holder still owns a US$ 100,000 worth of property in Georgia (not necessarily the piece that he or she initially purchased).
When you have a residence permit in Georgia, the banks and officials are going to be more sympathetic to you. You will have easier times obtaining a bank loan or setting up a business company in the country. To be fair, the latter can be done even without a residence permit though.
Reason Six – Low taxes
There is no tax on purchase of real property in Georgia. There is a property tax in the country, however. Its rate depends on the combined annual family income:
- from 40,000 to 100,000 laris per year – the property tax is from 0.05% to 0.2%;
- above 100,000 laris per year – the property tax is from 0.8% to 1%.
If the property owner does not make any income in Georgia or if his/ her income is below 40,000 laris per year, the property tax is not payable.
If a non-resident property owner lets his/ her property on a lease, there is a tax to pay and that should be taken into account:
- 5% — on rent of residential accommodations;
- 20% — on rent of commercial property.
Besides, there is real property sales tax in Georgia. You will have to pay 5% of the profit that you are making when selling your property if this property has been in your possession for less than two years. You can reduce this tax by supplying proof of the property maintenance costs that you have incurred such as utility bills, repair person bills, etc.
Reason Seven – Secure property purchase
Georgia was among the first countries that started using the blockchain technologies for storing house ownership data. Thanks to these technologies, the national Property Register is considered one of the most secure ones in the world. The information that is stored there cannot be lost, nor altered, nor deleted without authorization.
The use of blockchain technologies allows signing purchase agreements as well as gift and other agreements without applying for notary services. The property buyer obtains an extract from the Register that serves as the confirmation of property ownership.
Reason Eight – Inexpensive lifestyle
Food, clothes, utilities, entertainments – everything costs much less in Georgia than in any other European country. This is a good reason to buy a house or an apartment there and move to the state where living is cheap indeed. If you have a stable passive income of an average size, you can live very comfortably in Tbilisi, Batumi, or some other Georgian city. Freelancers love Georgia because they can rent high quality accommodations at a price that is lower than the price of poor quality accommodations somewhere in Europe. With a stable job, freelancers can afford living in comfort at the seaside!
NUMBEO ranks Tbilisi 402nd among 440 cities for the cost of living. This means that there are only 37 cities in the world where life is less expensive than in the capital of Georgia.
Reason Nine – Liberal migration policies
The Georgian Government has simplified the border crossing requirements for citizens of over ninety world countries. They can stay in Georgia for a whole year without the need to obtain a visa. In order to extend their visa-free residence permit all they have to do is leave the territory of Georgia and enter it again. This act will start a new one-year period of legal residence in the country for them. Some nationalities do not even have to bring their foreign passports, as their domestic ID cards will be sufficient.
Reason Ten — Tourism
The inflow of tourists into Georgia has been growing steadily over the last five years. There was a conflict with the Russian Federation last year when air connection between two countries was suspended. However, even with this fact, the number of tourists visiting Georgia grew in comparison to the previous year and reached 9.3 million thus setting a new record.
Naturally, 2020 is not going to see figures as high as this one but the number of tourists to Georgia will definitely start growing again when the current pandemic is over. People from the neighboring countries such as Armenia, Azerbaijan, Russia, and Turkey love visiting the hospitable Georgia. Even during the quarantine March of this year, 233,479 foreigners visited the country.
It is also good to know that the Government of Georgia actively promotes the country in the international arena trying to attract more tourists and investors from abroad. The authorities are preparing to open the doors to foreign visitors in the near future while taking all the necessary safety measures.
It is no wonder that Georgia is such a popular tourist destination. The landscapes are breathtaking there, the climate is mild, the national cuisine is fantastic, the local wines taste great, and the people are very friendly. Georgia will leave no one unimpressed!
If you have any questions as to purchasing real estate in Georgia, please address them to email@example.com and we will reply to you ASAP.
Can a foreign national purchase real property in Georgia?
Yes, citizens of other countries are welcome to purchase any property in Georgia in any amounts excluding agricultural lands.
What is required to buy property in Georgia?
A foreigner needs to bring his/ her foreign passport in order to make a purchase agreement. No other documents are required. Property can also be bought with a Power of Attorney in Georgia without the buyer visiting the country in person.
Can I buy an apartment in Batumi at the seaside remotely?
Yes, you can buy property in Batumi, Tbilisi, and other Georgian cities without leaving your home country. All you have to do is issue a Power of Attorney, have it notarized, and send it to Georgia with an international mail carrier.