Real estate market overview of Georgia
Georgia is fast gaining popularity not only among tourists, but also among investors. So, according to TBC Capital, the number of transactions in the first quarter of 2024 for real estate in Batumi and Tbilisi has increased by 36%.
Georgia is most interested preparing to become a tourist center of the Caucasus, which means that investments will quickly meet the expectations of investors.
Who can buy property in Georgia?
Citizens of any country have the right to acquire and own property in Georgia. But there are exceptions. For example, foreigners cannot buy agricultural land. This restriction also applies to foreigners who want to own land through a legal entity.
How to become an owner?
The Georgian government has made the process of buying real estate and registering ownership of it as convenient as possible. The buyer may even not be present in person. A notarized power of attorney is sufficient to make all activity related to property. If an investor gives power of attorney to any person he can purchase or sell the property.
Why Georgia?
Georgian real estate has a lot of advantages, growth, and boom but in terms of investment attractiveness, there are six main ones.
Attractive property prices
Compared to Europe or Turkey, where the average cost of an apartment starts at $35000 to 50000, in Georgia, you can buy an apartment in a new building for $60,000. here the price is about $1,200 to $1800 per m2.
And it should also be taken into account that in Georgia the construction of new districts is proceeding at a high pace and what was recently the outskirts is very quickly becoming a full-fledged part of the cities. For example, Batumi is a small city, from its outskirts to the sea coast – 15 15-minute walk, real estate costs approx $600 per m2.
Interest-free installments
The buyer can make a down payment, usually 30% of the property value, and pay the remaining amount in installments (monthly or quarterly) within 12-36 months. There are no commissions involved. Installments in Georgia are very often given by the developers themselves.
Profitable return on investment
Hundreds of thousands of tourists come to Georgia every year. After the pandemic, their flow resumed immediately. The most popular cities for buying an apartment today are Batumi and Tbilisi. Here real estate is very attractive for investors with its high payback and the demand for rental housing is growing every year.
You can earn from $3500 to $ $8000 per year by renting out an apartment, and the return on investment is about after 5-7 years. The cost of real estate in the country is growing by 20-25% annually. After a while, the apartment can be sold profitably. The country’s infrastructure is rapidly developing, which attracts “expensive” customers from all over the country.
Residence permit
Buying a house in the amount of more than $100,000 or more is one of the grounds for obtaining a short-term residence permit. Usually, it is issued for one year, it can be renewed annually for up to 12 years. It should be kept in mind that the acquisition of agricultural land is not suitable for these purposes.
You can also get an investment residence permit in Georgia for 5 years. It is issued not only to a foreigner but also to members of his family. In this case, the total value of real estate must be at least $300,000. After five years of ownership, a foreigner can obtain a residence permit.
Favorable investment climate
The Georgian government has created favorable conditions for attracting foreign investment. The procedure for registering a company, a hotel business or for renting out real estate as an individual entrepreneur, is simplified as much as possible.
Georgia is among the top five countries that have the easiest process when buying an apartment. The investor will need a passport, a contract of sale, and a receipt for payment of state duty. The standard process of registration of documents will take up to 4 days, the accelerated procedure will take 1 day.
Conservative taxation system
In many cases you do not need to pay real estate tax for owning a home/ apartment in Georgia, but for related income: income tax (corporate or personal), capital gains tax, and dividends. In some cases, VAT and property tax may be charged. However you can use legal tools that will help reduce the tax burden and optimize taxation.
The tax code of Georgia allows you to minimize deductions and increase the payback and profitability of investments in real estate. Foreign citizens in Georgia can use their real estate for commercial purposes without any restrictions and additional conditions.
Additional benefits of buying real estate in Georgia
- Absence of a visa regime – Georgia has free entry for citizens from almost 100 countries.
- Attractive conditions for doing business — transparency of all operations, the “one stop shop” principle.
- There is no corruption and bureaucracy in the country – in the World Bank’s Doing Business ranking Georgia is in 6th place.
- Income in dollars, which, against the background of the unstable exchange rate of a number of national currencies, looks quite attractive.
- Additionally, beautiful nature, landscapes, mild climate, hospitable, friendly people, low cost of living. It is a pleasure to work, live and relax here.
- Every year the popularity of Georgia as a fashionable tourist destination is growing exponentially. The houses and apartments of the Black Sea resorts of the country are in special demand. For example, in Batumi, the yield on real estate is 15-18%, which is a telling indicator (the world average is 4-10% per year).