Resident and non-resident natural persons, who in accordance with tax legislation of Georgia have in possession taxable property, are subject to property tax.

For natural persons, subject to property tax, except for land, is immovable property in possession (including uncompleted constructions, building or part of building), yachts, airplanes, aircrafts; property obtained from non-resident under the terms of lease; fixed assets, not installed devices and intangible assets on the balance sheet, also property delivered under the terms of lease; taxable property either used or possessed by natural person but registered on the name of decedent person, except for case when property is used under the terms of the rental or usufruct agreement.
Subject to property tax is also:
a) Land in possession of natural person as of April 1, except for land over which immovable property is erected;
b) State owned land which is either used or possessed by natural person;

Natural person (including natural person-entrepreneur) is subject to property tax:
a) If, he possesses taxable property on the territory of Georgia and gross income received by family members throughout the calendar year exceeds 40 00 Gel;
b) If, he, on the territory of Georgia owns land for agricultural and non- agricultural purposes, which are not exempted from property tax according to Article 206, Tax Code of Georgia.

By family members are meant: natural person himself, spouse, minor child and stepdaughter/son, parents permanently leaving with natural person, child and stepdaughter/son, sister, brother, grandfather, grandchild who are involved with joint activities. Taxpayer itself determines those people who leave with him permanently and are involved in joint activities.

Property tax rate differentiates in accordance with gross annual income received by the family members throughout of fiscal year and is determined as follows:
a) For families with gross annual income of up to 100 000 GEL – no less than 0.05 % and no more than 0.2 % of taxable property’s year-end market value;
b) For families with gross annual income equal to and more than 100 000 GEL - no less than 0.8 % and no more than 1.0 % of taxable property’s year-end market.

Property tax rate on the land for agricultural purposes is determined as follows:
a) Annual basic rate per hectare is determined by the Government of Georgia:
- For hayfields and pastures according to territorial unities and types of land – from 1.5 to 20 GEL depending on territorial units and type of land;
- For croplands and farmstead lands – from 50 to 100 GEL depending on territorial units and type of land;
- The representative body of local self-government unit determines property tax rate, which must not exceed 150% of the annual basic rate determined by the Government of Georgia.

Tax rate on the forest land is determined as follows:
- Annual basic rate per hectare is determined by the Government of Georgia and it varies from 20 to 50 GEL by territorial units;
- The representative body of local self-government unit determines tax rate, which must not exceed 50% of the annual basic rate determined by the Government of Georgia. Thus, person is subject to tax on forest land only if local self-government unit introduces such.

Tax rate on the forest land is determined as follows:
- Annual basic rate per hectare is determined by the Government of Georgia and it varies from 50 to 100 GEL by territorial units;
- The representative body of local self-government unit determines tax rate, which must not exceed 50% of the annual basic rate determined by the Government of Georgia.

Tax rate on land for non-agricultural purposes is determined as follows considering location of the land:
a) Basic tax rate is determined once in a year and equals to 0.24 GEL per hectare;
b) By local self-government unit decision determined basic tax rate is multiplied by territorial coefficient. At the same time territorial coefficient can not be more than 1, 5.

The following incomes, including interest, are taken into consideration for property tax purposes:
a) Taxable income received from economic activities;
b) Any type of income, including interest, which is not received from economic activities;
c) Salary.
The following incomes are not taken into consideration for property tax purposes:
a) Value of the property inherited from a decedent; gifted by the family members and received after divorce;
b) Income from selling flat (house) that person owned for more that2 years;
c) For non-resident natural persons, who are citizens of Georgia revenues are determined by Georgia source income.

Non-resident natural person’s income is determined by Georgia source income.

Property tax return must be submitted no later than November 1.Taxable property data must be transferred into tax return in accordance with previous fiscal year, taxable land date must be transferred into tax return in accordance with current fiscal year.

Property tax must be paid no later than November 15 for calendar year.

Property tax amount is calculated by the Tax Authority based on property tax returns filed, where taxable property value and land area are indicated. (Article 205, Tax Code of Georgia).

If taxable property is owned by two or more that two family members, then any adult member of family is entitled to file annual property tax return, where date on his and family members subject to tax is indicated. 

Natural person in not liable to file property tax return, if:
a) Natural person is not subject to tax liability due to tax benefits determined by the Tax Code of Georgia. Also, if natural person filed property tax return in previous year, then he is liable to notify tax authority about his decision of not filling property tax return and this should be done no later than May 15 in accordance with requirements prescribed by the finance minister;
b) Property tax return is filed in accordance with previous year or tax authority imposed property tax and no quantitative and qualitative changes are required for subject to taxation in coming years. In that case it is deemed that taxpayer paid tax and tax authority presented tax claim according which amount of current tax liability is equal to one filed last time. Also, if taxpayer keeps filling property tax return in accordance with these periods, then it will be considered as corrected.

The following properties are property tax exempted:
• Taxable property (except for land) of natural person, if gross family income throughout year does not exceed 40 000 GEL;
• Land for non-agricultural purposes, which are fully of partly damaged in the result of natural disaster;
• Property located on the occupied territories – temporarily, before conflict resolution and before economic situation improvement;
• Natural person received virgin lands for cultivation –during 5 years after land was received;
• Lands located on the territories where there used to be a village, also on the territories where families according to resettlement measures were resettled - during 5 years after they were resettled;
• Agricultural land of 5 hectare owned by natural person as of March 1, 2004;
• Land privatized by invalids of the second world war and people with equal status;
• Lands located along north and south slopes of the Caucasus Mountains, also lands located along mountainous area of Adjara and Guria districts;
• Property tax rate is 50% less on lands located in high-altitude areas to the south of Georgia;
• Agricultural lands where more than 50% of harvest has been destroyed in the result of natural disasters. In that case, the legal base for property tax exemption is decision adopted by the representative body of local self-government and which is agreed with the territorial body of the Agriculture Ministry; committee passes judgment twice– in 2 weeks term once disaster has passed and before a harvest is reaped;

Comment: tax benefits mentioned above does not extend to land delivered under the terms of the rental or usufruct agreement.  (Article 206, Tax Code of Georgia)

Taxpayer is entitled to:
• To file property tax return by himself;
• To file property tax return electronically via RS web-site (www.rs.ge).
• To send property tax return by post. In that case property tax return submission date is defined as date of sending by post;
Prescribed by the Georgia Revenue Service charge for accepting tax returns manually equals to 30 GEL. This charge does not extend annual property tax return of the natural person.
 

Taxpayer is entitled to request the delay of tax return filing deadline before the deadline itself. Due date for filing tax return may be extended by three months (natural persons is not liable to pay current taxes). At the same time, extension of tax return filing date will not affect the tax payment date. (Article 68).

Tax payer is liable to notify tax authority that according to tax benefits defined by Tax Code of Georgia is not subject to property tax, unless it is not liable to tax on land. Decision on not filing property tax return must be provided in accordance with requirements defined by the finance minister by no later than May 15. (Article 205).

Taxpayer breaking the due date for filing tax returns is subject to penalty of up to 5% of the tax amount not paid due date for each month or part of a month that the return is late (not full months are summed of up to one month). Simultaneously, the total amount of sanction for the whole period of delay shall not exceed 30% of the tax amount owed. If, according to tax returns filed and made calculations, the amount of tax liability equals to zero, then taxpayer is not subject to penalty.

If taxpayer fails to pay taxes within the deadline, then he is liable to pay fine. The amount of fine equals to 0.07% of tax amount owed per each overdue day. In case of payment delay, the day of payment is deemed as a day of delay. (Article 272)