Georgia Property Tax and Mortgage Rules Explained

How does Georgia's 5% capital gains tax work?

Georgia applies a 5% capital gains tax on property, but only under a specific condition: it applies only if the property is sold within two years of purchase.

Hold the property longer than that, and the tax does not apply at all — a meaningful incentive toward medium-term rather than immediate flipping.

Just as important is what the 5% is actually calculated on. It applies only to the profit made on the resale — the difference between the purchase and sale price — never to the total value of the transaction itself.

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That is a materially lighter tax structure than a flat transaction tax charged on the full sale price, which is the more common model in many other markets.

Put in concrete terms: a buyer who purchases a unit, holds it for three years and then sells at a profit pays no capital gains tax on that transaction at all under this structure.

Even a buyer who sells within the two-year window only owes 5% on the gain itself, not on the full proceeds of the sale — a meaningfully different tax bill from a flat percentage of total value.

A capital gains regime that only taxes the profit on a sale, and only within a defined holding period, is generally friendlier to short and medium-term investors than systems that tax the full sale value or apply regardless of how long the property was held.

Two details about Georgia's market tend to surprise buyers coming from Dubai: how light the tax burden actually is, and how much more willing local banks are to lend.

Can foreigners buy freehold?

Any foreigner can buy freehold property in Georgia, without the restrictions that apply in many popular alternative markets. Most of Thailand and Bali, by comparison, restrict direct freehold land ownership for foreign buyers, typically pushing them toward leasehold structures or condominium-specific ownership quotas instead.

That freehold access is a genuine structural advantage for Georgia when it is compared directly against those Southeast Asian resort markets — a foreign buyer gets the same underlying ownership rights as a local one, without needing to navigate a leasehold workaround or a foreign-ownership quota system.

For clients who have already looked at Bali or Thailand and been put off specifically by the ownership structure — a leasehold that expires, or a quota that caps how much of a building foreigners can own — Georgia's straightforward freehold access removes that entire category of concern from the decision.

Are mortgages easier than in Dubai?

The detail that surprised me most, even knowing it beforehand, is how much more willingly Georgian banks extend mortgages compared with Dubai — and that applies to both off-plan and ready property, not just completed units.

Dubai's mortgage system is considerably stricter by comparison. For Russian-speaking buyers specifically, financing is mostly available only on ready property, with off-plan mortgages practically unavailable through the mainstream banking system.

Georgia inverts that constraint, treating a mortgage almost like additional insurance covering the final payments on a purchase, with a large share of those payments coverable through financing rather than cash alone.

Why is Georgia so business-friendly?

Georgia's lighter tax environment is not a recent development — the country has been known for it since the Saakashvili era, when a broad set of reforms established the country's reputation for accessible, business-friendly regulation that has persisted since.

That reputation is part of why both IT and manufacturing companies continue relocating there, drawn by the same lighter tax and regulatory environment that applies to property. For most countries, entry into Georgia is also visa-free, which lowers the friction for both business relocation and for buyers wanting to visit before committing to a purchase.

What this means for an international property buyer

A capital gains tax that only bites on short-term flips and only on actual profit, unrestricted freehold access for foreigners, and a mortgage system genuinely more accommodating than Dubai's own.

Taken together, Georgia presents a materially lighter regulatory and financing environment than many buyers expect going in.

For a buyer specifically frustrated by Dubai's off-plan mortgage restrictions, Georgia's financing environment alone is worth a serious look — the ability to leverage a mortgage against an off-plan purchase changes the entry-capital calculation considerably compared with needing to fund the entire purchase price in cash, which is effectively the current reality for many buyers in the UAE.

I would still caution against treating a lighter regulatory environment as a reason to skip due diligence entirely — a lower tax burden and an easier mortgage do not by themselves guarantee a good property or a reliable developer.

They simply remove two of the frictions that make international property investment harder than it needs to be, leaving the actual project selection as the part still worth doing carefully.

Frequently asked

How much capital gains tax does Georgia charge on property?

5%, applied only to the profit from the sale, and only if the property is sold within two years of purchase. Holding longer removes the tax entirely.

Can foreigners buy freehold property in Georgia?

Yes, without the restrictions common in markets like Thailand or Bali, where foreign freehold ownership is limited.

Are mortgages available for off-plan property in Georgia?

Yes — Georgian banks lend more willingly than Dubai's system does, including for off-plan units, unlike Dubai where off-plan mortgages are largely unavailable to many buyers.