Tax on Selling Property in Georgia: 5% and the 2 Year Rule
You have a buyer for your flat in Tbilisi and you want to know what the Revenue Service takes. The answer turns on how long the property has been yours, and on whether the sale stands on its own or belongs to a run of them. Below are the rate, the ownership period that removes the tax, the dates that period is counted between, and the VAT question a second sale raises.
- Gain on a residential flat or house with the land under it is exempt once you have owned it for more than 2 years.
- Where the sale is taxable, the gain is taxed at 5%, not at the 20% general rate.
- Gain means the sale price minus the purchase price, or minus market value where you received the property free of charge. Renovation work, agent commission and notary fees do not come off it.
- You file by the 15th of the month after the sale and pay by the same date, on the form at Annex II-04(2).
- Selling several flats raises a separate VAT question that the 2 year rule does not answer: registration becomes mandatory once taxable supplies pass GEL 100,000 in any 12 consecutive calendar months.
How much tax you pay when you sell property in Georgia
The rate on a taxable gain from selling a residential flat or a house with its attached land is 5%, set as a special rate by Article 81(3) of the Tax Code. It applies to the gain, not to the price.
Personal income in Georgia is otherwise taxed at a flat 20%, and the reduced rate reaches only the assets the Code names. Land sold on its own is not one of them, and neither is any other asset that is not a home or a vehicle. The gain there falls under the general 20% unless the asset was owned for more than 2 years and was not used in economic activity.
Holding Small Business Status changes none of this. A gain on real estate is one of the income types that sits outside the 1% regime and does not count toward its turnover limit, so a status holder works the sale out the same way everybody else does.
The 2 year rule
Gain on a residential flat or a house with the land attached to it is exempt from income tax when the property was owned for longer than 2 years. The clause asks about the holding period and nothing else, so the size of the gain and whether the flat was your only home make no difference.
Other assets sit on a different clause with a second condition. A gain there is exempt after more than 2 years only if the asset was not used in economic activity, and simply holding shares or securities for the dividends or interest they pay does not count as economic use.
When the 2 years start
The period does not start on the day you moved in or the day you paid. It runs from the date the ownership certificate was drawn up for registration, or, where the property was never registered, from the moment the ownership right arose.
The far end is the date of the document used to register the transfer to your buyer, not the day the money reached your account.
Only a first-line heir adds time. That heir counts the testator's or donor's ownership period together with their own, and the Code lists the first line as the spouse, child, adopted child, grandchild, great grandchild and his or her child, parent and adoptive parent. An heir of the second, third or fourth line, and a donee who is not a first-line heir of the donor, start the 2 years afresh from the date their own ownership document was drawn up.
A transfer registered a few weeks before the certificate's second anniversary is a taxable sale at 5%. The same sale a month later is exempt. Nothing about the flat or the price has changed between the two. A date on a registry document has.
Renting the flat out and other business use
The economic-use condition does not reach a home: it sits on the clause for other assets, so letting a flat out does not by itself cost you the exemption when you sell it. Where the condition does apply, past business use is ignored only if it ended 2 years before the sale, so an asset taken out of a business the month before it changes hands still counts as used in economic activity.
The rent itself is taxed while you hold the flat. The rental income of an individual from residential space is taxed at 5% where the landlord is entered in the Revenue Service register of persons renting out residential space, on form VII2-01.
The Ministry of Finance draws a line around that in a public ruling. A supply made by an entrepreneur individual within entrepreneurial activity is not treated as the sale of a residential flat or house at all, so neither the 5% rate nor the 2 year exemption reaches it. The ruling names development activity and securing mortgage claims as the examples.
Working out the gain
Gain is the sale price minus the acquisition price at the time your ownership right arose. Where you received the property free of charge, it is the sale price minus the market price at the moment you received it.
The Code names those figures and no others. Renovation and capital improvement work, agent commission, notary fees and registration fees are not added to the purchase price and are not otherwise deducted, because the deduction articles bar expenses unconnected with economic activity and an individual's personal consumption expenses.
Say you bought a flat in Vake for GEL 180,000 and sold it 16 months later for GEL 245,000.
The gain is GEL 245,000 minus GEL 180,000, so GEL 65,000. At 5% the tax on it is GEL 3,250. The sale falls inside the 2 years, so the exemption does not reach it, and the return and the payment are both due by the 15th of the month after the month of the sale.
A sale at cost or at a loss is different. What triggers the return is a surplus of the sale price over the acquisition price, so where there is no surplus, no return falls due on the sale.
When you file and what it costs to be late
A taxable gain from selling property outside a business goes on a monthly income tax return, due no later than the 15th of the month following the month of the sale, on the form at Annex II-04(2). The tax is paid by that same date, and the worked example in the Ministry of Finance instruction has a sale made on 10 March filed and paid by 15 April.
That deadline does not wait for the annual income tax return that residents file by 31 March for the year before, a date the Revenue Service confirms in its own deadline brochure. The registration authority tells the seller about the duty to report and pay before it registers the new owner.
| What went wrong | What it costs |
|---|---|
| Return up to 2 months late | 5% of the tax due on the return |
| Return more than 2 months late | 10% of the tax due on the return |
| Return late, no tax due on it | No fine |
| Tax paid late | 0.05% of the unpaid tax for each overdue day |
The Revenue Service has 3 years from the end of the calendar year in which the liability arose to assess the tax and serve a demand, so a missed return does not lapse with the year it belonged to.
VAT when you sell more than one flat
The 2 year rule does not touch VAT. VAT attaches to supplies of goods and services made within economic activity in Georgia, and the Code defines goods as material or immaterial property, which reaches a flat.
The VAT chapter does not borrow the general meaning of economic activity. It carries its own: activity under the Law on Entrepreneurs, the activity of persons making supplies of goods or services except activity of a one-off or irregular character, and the use of property to obtain regular income.
The carve-out for one-off or irregular activity does not reach commercial property. Whatever its one-off nature, supplying a non-residential building or structure is always economic activity, so an office, a shop or a warehouse stands on different ground from a home.
No article sets a number: the Code has no count of flats and no frequency test, and the tests it does set are qualitative.
The current administrative reading comes from the Ministry of Finance public ruling of 8 June 2026: systematic and organised activity means creating, acquiring or selling assets as an independent and principal economic activity in order to obtain regular income. Merely holding residential flats or houses, their number, how long they are held and their later disposal are not in themselves enough to make the activity entrepreneurial. The ruling states that test for income tax rather than for VAT.
Registration becomes mandatory once taxable supplies exceed GEL 100,000 in any 12 consecutive calendar months, which is not the same as a calendar year, and the application is due within 2 business days. VAT is then charged from the transaction that takes you over the line, including the whole of that transaction. The threshold counts the value of the supplies and not the number of them, so one sale can pass it without a second.
What decides the VAT question is therefore not the amount but whether the sales are economic activity at all. If you have more than one property in play, you can send the dates and prices and get a written opinion David Sisvadze signs. What is characterised is the activity, not the single contract in front of you.
Selling as a non-resident
A non-resident pays Georgian income tax only on Georgian-source income, and a gain on Georgian real estate is inside that. The Code taxes a non-resident individual who earns income from disposing of property on the calendar year's Georgian-source gross income less the deductions related to earning it, and the categories it lists end with the surplus from disposing of other property.
Nothing is withheld at the sale itself. No clause of the tax agent article makes the buyer of real estate a tax agent, so the seller files the same monthly return by the 15th of the month after the sale and pays within that deadline, on a form whose instruction covers a non-resident expressly.
The 5% rate and the 2 year exemption are written by reference to the property, not to the seller's passport. A non-resident who has owned the flat for longer than 2 years is in the same place as a resident who has.
Frequently asked questions
Do you pay tax when you sell an apartment in Georgia?
Only if you have owned it for 2 years or less. Gain on a residential flat or house with its attached land is exempt once the ownership period passes 2 years, and where it has not, the gain is taxed at 5%.
How much is capital gains tax on property in Georgia?
5% of the gain on a residential flat or house with the land under it, where the sale is taxable at all. Georgia charges no separate capital gains tax: this is income tax at a special rate, against a general personal rate of 20%. The gain is the sale price minus the purchase price.
What is the 2 year rule for selling property in Georgia?
It is the holding period that removes the tax. Own a residential flat or house with its attached land for more than 2 years and the gain on the sale is exempt. Other assets are exempt on the same 2 years only if they were not used in economic activity.
When do the 2 years start?
On the date the ownership certificate was drawn up for registration, or on the date the ownership right arose where the property was never registered. The period ends on the date of the document used to register the transfer to your buyer. Neither date is the day you moved in.
When do I have to file and pay after selling a flat?
By the 15th of the month after the month of the sale, on both counts. The return goes in on the form at Annex II-04(2), and the tax is paid by that same date. The registration authority warns the seller of the duty before it registers the new owner.
Do I pay VAT if I sell several apartments?
That turns on whether the sales are economic activity, and no number of flats settles it by itself. Registration becomes mandatory once taxable supplies exceed GEL 100,000 in any 12 consecutive calendar months, and one sale can pass it without a second. The Ministry of Finance's reading is that holding residential property, how much of it you hold and how long you hold it are not in themselves enough to make the activity entrepreneurial.
Do I pay tax if I sell at a loss?
No, because there is no gain for the 5% to apply to. The monthly return follows a surplus of the sale price over the acquisition price, and a sale at cost or below produces none.
Do I pay tax on a property I inherited and then sold?
Inheriting is exempt for a first or second line heir, and exempt up to GEL 150,000 for a third or fourth line heir. The sale is a separate question, and only a first-line heir adds the deceased's ownership period to their own 2 years. A second, third or fourth line heir counts the 2 years from the date their own ownership document was drawn up.