Who Can Buy Property in Georgia?
Georgia, with its open approach to foreign investments, allows foreigners to purchase residential and commercial real estate in the country without limitations. Only agricultural land is reserved for the citizens of Georgia.
Residency by investment is also possible. A minimum investment of USD$100,000 grants a one-year residence permit which can be renewed annually on the basis that the person still owns the property (and that the market value of the property still exceeds USD$100,000). There is also a path to permanent residency which requires the investor to physically be present in the country for most of the year for six years.
Do the Research
Take your time to understand the Georgian real estate market. Look into different property types, market trends, and regions. If you’re buying a new property, make sure to familiarize yourself with the different finishing levels of properties (black frame, green frame, and white frame). Keep in mind that as these terms are not legally regulated, different developers might mean slightly different things when using those terms. Thus, it’s important to engage the services of a local, reputable real estate agency or lawyer to make sure you are paying a fair price and you actually receive the property in the state that you expect it to be in.
In terms of regions, most of the foreign investments are focused on:
- Tbilisi - The Capital and largest city of Georgia offers a lively nightlife, delicious food, and heartwarmingly friendly people. The rental yields in Tbilisi have been good in recent years, thus more and more investors are looking in that direction.
- Batumi - Known for its beaches, casinos, and nightlife, Batumi is a major port city on the Black Sea coast. It offers modern architecture with some wonderful buildings like the Batumi Technological University Tower and the Alphabet Tower.
To find properties online:
Financing for foreign residents is possible, but in a lot of cases, foreign investors avoid local banks. In most cases, the interest rates are over 10% and it is common to require 50% down payments. Moreover, the term of the loans is often 10 years. All this together means that in a lot of cases, foreigners opt to purchase their properties in cash or find financing in their home country.
Visit Properties and Make an Offer
As the property purchase process in Georgia is quite simple and straightforward, it’s very important to focus your attention on finding the right property. Determine your budget and goals and start your search online (or with the help of your agent if you go that route). Negotiations are informal so make sure you compare prices of similar properties and try to get the best possible deal. Of course, if you engage the help of a real estate agency, they will be helping you with this process. If any property is of particular interest, make sure you visit it to make sure of its construction quality and general condition.
Due Diligence and Sales Contract
It’s very important to conduct proper due diligence on the property. You can do so yourself online or by making an application to the House of Justice. Of course, it’s best practice to hire a lawyer to do this on your behalf to understand whether there are any encumbrances, burdens, or alienations.
If all documentation checks out, a sales contract needs to be drafted and signed at the House of Justice. This will be done in 3 copies and at least one of the copies needs to be translated if one of the parties does not speak Georgian. All in all, you can expect this process to take not much more than 1-2 days.
Property Buying Costs in Georgia
|Real Estate Agent´s Fee
|Costs paid by buyer
|Costs paid by seller
|ROUNDTRIP TRANSACTION COSTS
|Source: Global Property Guide