Real Estate Investments in Georgia

The Complete Guide to Purchasing Real Estate in Georgia
 

Purchasing real estate in Georgia can serve various purposes, from residential use to creating a new income stream. While buying real estate can be complex in Israel due to bureaucratic and financial considerations, the process in Georgia might be even more challenging, requiring professional guidance. Here is the complete guide to purchasing real estate in Georgia.

What Are the Advantages of Buying Real Estate in Georgia for Investment Purposes?

Lower Prices

The most straightforward advantage is the significantly lower cost of real estate in Georgia compared to Israel. This affordability opens opportunities for Israelis with limited capital to enter the real estate investment market abroad.

Additionally, investors with substantial capital can leverage Georgia’s low property prices to acquire multiple properties for the same price as a single property in Israel, without compromising on quality.

Tax Benefits

Georgia offers favorable tax policies for foreign real estate investments. Unlike in Israel, where purchasing property incurs high acquisition taxes, Georgia does not impose property purchase taxes. Moreover, capital gains tax is only 5% if the property is sold within two years of purchase, and it is completely waived if sold after two years.

Thriving Tourism

Georgia’s growing tourism sector benefits the local real estate market. Tourists increasingly prefer renting apartments over staying in hotels, offering investors an opportunity to profit by renting properties to short-term visitors.

Economic Growth

Investing in countries experiencing economic growth can be lucrative. As living standards rise, property values and rental incomes are likely to increase, benefitting investors.

Government Support

The Georgian government actively encourages foreign investments, including in real estate, by providing favorable laws and tax policies. This makes the investment process more attractive and accessible.

High Returns

Real estate in Georgia offers higher returns compared to other countries. Rental yields are calculated as a percentage of the property’s value, and the favorable conditions in Georgia contribute to these attractive returns.

Steps to Buying Property in Georgia

1. Define Your Purpose
Before purchasing property, determine your primary objective. Properties can be bought for personal residence (if you have Georgian citizenship or permanent residency) or for investment purposes, such as renting to local tenants or tourists.

2. Seek Professional Guidance
Buying property in a foreign country can be complex due to differences in language, culture, and legal systems. Professional assistance from lawyers specializing in Georgian real estate or agencies with expertise in the market can streamline the process and ensure compliance with local regulations.

3. Property Search
With professional help, identify properties that fit your budget and investment goals. For instance, if you aim to rent to families, look for properties that meet their needs and are located in areas with high rental demand.

4. Adhere to Regulations
Georgia’s tax and legal framework is investor-friendly. Ensure compliance with regulations for foreign property buyers. While the process is straightforward, working with professionals can avoid potential pitfalls.

What If You Want to Sell the Property Later?

If you decide to sell the property, Georgian law allows for favorable terms. For example, there is no capital gains tax if the property is sold after two years of purchase. Within two years, the tax is only 5% of the profit.

Key Precautions

With the growing interest in Georgian real estate, scams have become a concern. Local fraudsters may exploit language and knowledge gaps. To avoid losing money, always work with experienced and reliable professionals throughout the process.

Investing in Georgian real estate offers numerous benefits, but success depends on thorough research, clear objectives, and professional guidance to navigate the local market efficiently.