How much does an apartment cost in Gudauri? Can foreigners purchase real estate in Gudauri? Procedure of real estate purchase and conveyancing in Georgia. Return on investment and taxation.

- Can foreigners purchase real estate in Gudauri?
- How much does a condo cost in Gudauri?
- How much do commercial property and land property cost in Gudauri?
- Return on investment and taxation

- Why is it more profitable to buy secondary housing in Gudauri?
- Procedure of real estate purchase and conveyancing in Georgia
- Commercial property purchase. Incorporation and taxation

Can foreigners purchase real estate in Gudauri?

Georgian laws allow foreign citizens to freely purchase real estate for residential or commercial purposes without any limitations, apart from plots of land among agricultural lands (this rule is applied since May 2017). Closure of a deal (conclusion of a treaty, payment in the bank, registration of rights in the register) takes from one to several days.

Foreigners are not obliged to provide any additional documents regarding sources of income and do not have to pay additional taxes and stamp duty. Foreign citizens can use the full profit from ownership of the real estate, purchased by them for personal use or for commercial purposes.

How much does a condominium cost in Gudauri?

In 2019, the cost of 1 square meter of apartments in new houses under construction in Gudauri is averagely from USD 1400 with renovation and furniture in Lower, Central and Upper Gudauri, to USD 1600 white carcass without renovation in New Gudauri. The cost of condo renovation on turnkey basis ranges from USD 300 to 500 per square meter, depending on the choice of materials.

Thus, standard apartments – 25-square meters’ studio with renovation and furniture in a house under construction will cost from USD 35000 to USD 48000.

Cost of secondary housing – apartments in already built and functioning houses in Gudauri starts from USD 500 for the black carcass, USD 800 for white carcass and from USD 1400 with renovation and furniture.

How much do commercial property and land property cost in Gudauri?

The average cost of commercial property in houses under construction in Gudauri in 2019 is from USD 2000 to USD 3000 per square meter in already built houses.

Land properties in Gudauri that are not delisted from the list of farmlands - from USD 60 to USD 120 depending on land property location to USD 250 per square meter for land properties, delisted from the list of farmlands with existing projects.

Cost of delisting from the list of farmlands for each hectare of agricultural land by the time of the request – fivefold annual rate of property tax on land determined by the Tax Code of Georgia (Article 6, p. 2. of the Law of Georgia "On recognition of ownership of land properties, owned (used) by physical entities and legal persons under private law").

Return on investment and taxation

As on 2019, the real term of return on investment for purchase of apartment ownership with the purpose of rental is from 5 years for two-three-roomed apartments to 7 years for standard studio-apartments.

There is no real estate purchase tax in Georgia. But there is a sales tax if less than 5 years passed from the moment of property purchase. When renting the apartment, its owner would have to pay 5% from the received income to the Georgian budget, to do that he will have to register as a taxpayer.

Why is it more profitable to buy secondary housing in Gudauri?

At the lower or the same cost of secondary housing, the benefit of its purchase is obvious because of the opportunity to receive income from renting finished housing immediately after purchase, a minimum of 5 thousand USD for a standard small studio for the winter season. Multiply this amount by 2-3 years (while the apartment in the new house will be built) - these USD 10-15 thousands are quite a significant difference at the start in favor of secondary housing. Moreover, new buildings may be commissioned behind schedule, out of time.

Procedure of real estate purchase and conveyancing in Georgia

In Georgia, closure of all real estate purchase and sales deals takes place in the departments of the National Agency of Public Registry at the Houses of Justice, that are open in many cities of the country, and takes from one to several days.

To purchase real estate in Georgia, it is not necessary to come to the country: it is possible to make a deal with the help of a trustee.

The process of a real estate purchase is simple and transparent. It includes several stages:

Choice of real estate item. Our specialists select objects that satisfy your requirements, consult, provide all the necessary information regarding the object. After you’ve made a choice of the item, we check the documents on the item for compliance with its real state and for the non-availability of such issues as debts, judicial proceedings, mortgage loan and any other important information on the property owner. 

Advance-deposit payment. According to the prepayment contract, a buyer pays 3–10 % of the property cost for it to be removed from the market.

Conclusion of sale and purchase contract. It is signed between seller and buyer. When purchasing property in a house under construction, two contracts are executed – preliminary and main. It is not necessary to record the contract by a notary. 

Money transfer. According to sale and purchase contract, buyer pays funds to the seller’s operating account. Payment is performed in any convenient way (cash or wire transfer). The most common is bank transfer.

Conveyancing. The process is performed on the basis of a contract and payment which is proved by the bank transcript. Certificate of registration is recorded and stored in the House of Justice.

Cost of registration depends on the terms: within one day (actually 2–3 hours) — 200 lari (USD 114), one or two working days — 150 lari (USD 85,5), four working days — 50 lari (USD 28,5). The amount includes 18 % VAT.

Commercial property purchase. Incorporation and taxation

Businessmen, interested in creating a company in Georgia, can purchase real estate, where they can develop business in the following sectors: tourism, housebuilding, gambling games, manufacture or logistics services. Those, who want to purchase real estate in Georgia, must hand in an application in the Ministry of Finance and Economic Affairs, where they provide identity details (this is required both from physical entities and legal persons).

Legal persons purchasing real estate in Gudauri must provide information about company, company directors, and registered number of business-form; Colleagues of our company will help to provide additional information about registration of companies in Georgia and will help foreigners with recommendations on the purchase procedure and documents that should be prepared.

There is no real estate purchase tax in Georgia. Commercial activity tax – from 1% to 18%. When renting the apartment, its owner would have to pay 5% from the received income to the Georgian budget, to do that he will have to register as a taxpayer.