A Guide to Buying Property in Georgia
With a distinctly unique language and incredibly diverse landscape, Georgia is as beautiful as it is unusual. An eclectic melding pot of Persian architecture, stark mountains, Black Sea beauty, spa-culture, and incredibly friendliness, Georgia is a destination like no other.
Georgia has a diverse climate of subtropical influences from the west side and a more continental climate toward the east. Thanks to the Black Sea, the west is a warm, moist climate, with abundant rainfall, noticeable humidity, and temperatures of up to 71F in the summer months.
The Greater Caucasus mountain range along the top side of Georgia shelters it from the extreme colds coming down from Russia, however these mountains often experience heavy snowfall and cooler climates.
The plains in the east of Georgia are sheltered by the mountains but tend to have a continental climate, which summer highs of around 75F, but with significantly lower humidity and rainfall, and slightly colder winters.
Georgia is known as a great budget location offering a range of natural beauty, welcoming people, interesting cuisine, and diverse history and culture.
What This Guide Covers
What You Need to Know About Georgia
Key Info for Foreigners Buying Property in Georgia
- Types of Property for Sale
- Property Ownership
- Buying Process
- Financing Options
- Potential Property Buying Problems
What You Need to Know About Georgia
The 21st century brought a turnaround for Georgia, which was previously ranked 118th when it came to ‘ease of doing business’. Since 2007, Georgia has improved significantly working its way up to 6th in World Bank’s ‘Doing Business 2019’ report.
While improvements can be seen, Georgia still suffers from relatively high unemployment, with 12.6% of the labor force without jobs.
On top of this, Russia has placed an embargo on Georgian good, inflating the price of gas and preventing imports of Georgian wine. This has had significant impact on Georgia’s economy as Russia is the main trade partner of the small country.
That said, Georgia’s integration into the international market of trade has helped to boost the overall economy, with exports making up 21% of their GDP in 2015. The main exports of Georgia include nuts, scrap metal, gold, ferro-alloys, and fertilizer.
When one considers internal changes to the economy, the introduction of a flat-rate income tax in 2004 has had multiple good effects on the Georgian economy as the government is now in a better position, with a budget surplus where previously there was a notable deficit.
In fact, budget revenues have increased fourfold. The reverberations of this can be felt all over the country. Were 54% of the population previously lived in poverty (according to 2001 statistics), by 2015, this number was reduced to 10%.
In general, where Georgia was previously dominated by the agricultural industry, the influx of tourism and introduction of telecommunications infrastructure has led to a bigger focus on the services industry, which now makes up nearly 70% of the country’s GDP.
Politically, Georgia is a parliamentary representative democratic republic with a multi-party system. Since the Rose Revolution of 2003, Democrat parties has been the most dominant in the political system.
Georgia has a President, Salome Zurabishvili, who serves as the ceremonial head of state, and a Prime Minister, Mamuka Bakhtadze, who is the head of the government.
Interestingly, certain regions in Georgia – Abkhazia and South Ossetia – consider themselves autonomous. While the government recognizes Abkhazia to be autonomous, it does not hold the same recognition for South Ossetia.
The Abkhazia area is a source of contention for the government, taking up a lot of their time. There are currently Russian troops stationed there to keep the peace.
As there are a large number internally displaced persons within Georgia, the government has given this region significant authority in the hope of placing these displaced people in a settlement there. However, the Abkhazia people refuse to accept this deal, causing tensions to rise.
Tourism is Georgia is increasing dramatically, making it far easier than it ever was before to reach the country. The main airport is located in Tbilisi, around 11 miles from the city center.
There are direct flights from all over Europe including Vienna, Amsterdam, Rome, Athens, and Munich – as well as further out from Dubai, Doha, and Moscow. Travelers from further afield should head to a European city and change to a budget airline to fly into Georgia affordably.
If you’re coming from Turkey, you can jump on a bus from Istanbul and arrive at one of the three main bus stations in Tbilisi – Ortachala, Samgori, or Didube.
It’s pretty easy to drive into Georgia too – aside from the dodgy roads – but you must be carrying your passport and all important documentation.
If you’re looking to get the train, you can get direct trains from Turkey, Azerbaijan, and Armenia – but you’ll need to get to those countries first. Interrail can get you from most places in Europe to Turkey.
As for getting around Georgia, the roads are very poor. Driving is no mean feat, so be prepared to have to pay extra attention all the time. While there are a few highways, these are few and far between.
Equally, while there are coaches, the ride is not an enjoyable experience and they’re often late and unreliable. Minibus travel is also possible – while you’re more likely to get a reliable service, don’t expect a comfortable ride!
Traveling by train is pretty viable, with nearly 1000 miles of railway running throughout the country. Be aware, however, that you need to keep an eye on your valuables. It’s often recommended to secure your passenger cabin from the inside by tying a wire or string around the handle!
You can fly from Tbilisi to Batumi but internal flights are limited to these two destinations.
Tourism is fast becoming an important element of the Georgian economy, employing over 150,000 people, and contributing 6.7% to the country’s GDP. Georgia has plans to welcome 11 million tourists by 2025.
For tourists traveling to the country, you’ll be surprised by the diversity of attractions, rich cultural history, and beautiful natural setting.
Georgia has one of the oldest wine regions in the entire world, having produced wine as far back as 8000 years ago. They have over 500 different grapes from which they produce wine, with their wine-producing areas dominating the tourist trade.
Eco-tourism is increasingly becoming an attractive prospect for tourists, thanks to the abundance of natural habitats that stand protected in Georgia. 41% of Georgia is forested area, and 21% is nationally protected parks. These areas offer bird watching tours, boat rides, hiking, biking, and horseback riding to showcase the incredible nature – home to 5601 species of animals.
The jaw-dropping Caucasus Mountain range provides tourists with incredible winter sports resorts catering from skiers, snowboarders, and climbers alike, such as Guadauri, Bakuriana, and Mestia.
The historical towns and cities are also home to a menagerie of architecture, from ancient monasteries, fortresses, and cobbled streets, to art nouveau structures and Georgian style natural baths using sulphur springs.
Key Info for Foreigners Buying Property in Georgia
The property market in Georgia is on the rise on account of the increasing levels of tourism that are passing through places such as Tbilisi. Between 2017 and 2018, house prices in the capital rose by 6% and continue to increase.
In 2017 alone, the number of international arrivals through Tbilisi airport rose by 42%, which has significantly increased the short-term rental market for holiday makers coming through for a few weeks at a time.
While the number of tourists coming through has grown, the number of hotel spaces has not increased to fulfil the demand, causing vacationers to look for alternative places for accommodation – including short term rentals.
Interestingly, much of the property market has been dominated by Georgian buyers, meaning that many properties have been finished to the tastes of the native people.
This gives a great opportunity for foreigners to come in and appeal to the international market with their interior design, both in terms of offering holiday lets and for flipping properties.
With no property taxes and easy access to property buying, there are few barriers to foreign investment in property, making the Georgian property market a great place to look for a second home or an investment opportunity.
Types of Properties for Sale
In the urban environments, such as the capital of Tbilisi or the second largest city of Batumi, you’re most likely to find apartments and condos for sale. These are usually one or two bedrooms, but some stretch to three bedrooms. You can find both furnished and unfurnished condos for sale.
While high rise condos are starting to take shape around these cities, you’ll predominantly find lower rise buildings of up to 8 floors. As condos tend to be quite swanky, you’re looking at spending between $80,000 to $100,000 depending on the location.
When you head out into the towns and villages, you’ll find townhouses and villas for sale. These properties tend to have two or three floors with open plan living spaces and generous sized bedrooms. These properties will set you back around $40,000 to $90,000.
It’s important to understand that when you’re buying a new build, most Georgian people want ‘white frame’ buildings, which are essentially just the shell of the house.
This means you might have to do some significant internal work which adds on extra costs. Alternatively, older properties often have quite traditional decor which may need updating.
It’s super simple to buy property in Georgia as foreigners have pretty much the same rights to buying property as Georgian nationals. In fact, foreigners can buy both residential and commercial property – you just need your passport.
The only real limitation is that foreigners cannot buy agricultural property. This refers not just to land that has a working farm, but also countryside homes. Foreigners cannot buy outside boundaries of major towns and cities, so rural properties are off the table.
The buying process is very simple in Georgia. You won’t need to necessarily get an estate agent, independent lawyer, notary, or surveyor – those things are up to you. In general, the process happens privately between the buyer and seller and is registered at the Public Service Hall with the Ministry of Justice of Georgia.
Typically, the buying process goes like this:
- Once the seller and buyer agree to a price, the contract is finalized at the Public Service Hall. Foreign buyers need to bring their passport.
- The buyer pays either $70 for registration in 1 business day or $25 for registration in 4 business days.
- The payment is transferred from the buyer to the seller.
- The registration process involves analyzing the sales contract and checking with the Public Registry in regards to the true ownership of the property.
- If all is above board, the registration is finalized.
- You can have the documents translated to your own language for $5, and notarized for an extra $15.
Foreigners cannot get mortgages in Georgia. This means finding your own independent way to finance your property.
On the flip side, you probably don’t want a mortgage in Georgia as the interest rates are very high – around 8-9% per annum.
If you don’t have the funds right now, however, you can invest in a property that’s not quite completed yet. Usually for projects that are a few years off completion, you can put down a 30% deposit and then pay installments over the period of construction.
There is no property buying tax in Georgia. You only have to pay for the registration which costs either $70 for a one day service or $25 for a 4 day service.
If you want to involve an independent lawyer, estate agent, and surveyor, however, you’ll incur costs of their services – but they’re still pretty low.
Potential Property Buying Problems
There are a few things to consider to prevent you from making mistakes when buying property in Georgia:
- Be careful with rural properties. Make sure that you’re not buying outside the boundaries of allowed land as some country homes can be classed as agricultural property even if there is no farm.
- Sellers will try to upsell to foreigners. Make sure that you get help from a local with translation to make sure that you’re not being taken for a ride.
- Look out for communal kitchens. Old time soviet buildings tend to have a living area and bedroom and don’t include a kitchen, because it is communal to the building and in general, neighbors don’t take care of these and they tend to have plumbing issues.
- Historical buildings must be surveyed. While beautiful, often they have significant structural issues which the seller won’t admit to. Employ a good surveyor to have a look over the property first.
Foreigners who invest more than $35,000 in real estate automatically get a short-term residence permit to live in Georgia. In order to qualify, you have to have the property valued and verified by an independent auditor.
This short-term permit is valid for 1 year and can be extended for up to 5 years. After 5 years, this can be converted to a permanent residence permit, which lasts for 10 years and then can be renewed.
The permit costs $80-$166 and can be applied for at any territorial office of the Public Service Development Agency, any branch of the Public Service Hall or Community Center. Alternatively, you can apply online at: https://services.sda.gov.ge.
You just need your passport, the application documents and the fee.