Property Tax Planning is a vital service for real estate owners, developers, and businesses in Georgia. Property tax is a local tax, with rates and payment rules varying by municipality, asset type (land vs. buildings), and owner status (individual vs. legal entity). Improper planning or incorrect asset valuation can lead to significant financial losses. This service aims to optimize tax liabilities through legal means, manage asset revaluation, and ensure accurate filing of declarations.
The service involves detailed analysis and consultation on the following issues:
- Corporate Property Tax: Calculating the average annual book value of assets and correctly applying the rate (not exceeding 1%).
- Land Tax Calculation: Computing tax on agricultural and non-agricultural land based on rates established by specific municipalities.
- Individual Property Tax: Determining liability based on annual family income (0% for income up to 100,000 GEL, progressive rates above 100,000 GEL).
- Taxation of Leased Property: Delineating tax obligations between the lessor and the lessee.
- Utilizing Tax Exemptions: Specifics of taxing property in tourist zones, high mountainous regions, or special economic zones.
Consider several scenarios. First: A company has an old building on its balance sheet with a low market value but a high book value (due to insufficient depreciation). As a result, the company pays disproportionately high property tax. Conducting an audit revaluation can reduce the tax base. Second case: An individual owns several apartments and rents them out. If their family income exceeds 100,000 GEL, they are required to pay property tax on all real estate, which is often forgotten and leads to fines. Third: A developer company with unfinished construction. It is important to determine at what stage taxation begins and how land tax applies during the construction process.
The Tax Code of Georgia (Section IX, Property Tax) is the main regulatory document. The Code sets the ceiling rates, while specific rates are established by local self-governments (municipalities). For example, in Tbilisi, the land tax rate varies by zone. The Civil Code of Georgia defines the concept of real estate, which is the basis for taxation. The Law on Audit Activity regulates property revaluation standards, which is crucial for determining the tax base for legal entities.
The planning process begins with an inventory of assets and verification of their status. Specialists analyze accounting records, check cadastral data, and compare municipal tariffs. Then, a declaration simulation is performed to determine the optimal tax burden. If necessary, asset revaluation or structural changes (e.g., writing off unused assets) are carried out. The final stage is submitting the annual declaration (by November 1 for individuals, by April 1 for legal entities).
Legal.ge offers access to real estate tax experts with deep knowledge of local regulations. They will help you not only calculate the tax correctly but also minimize it through legal means. Whether it's commercial space, agricultural land, or a residential complex, our specialists ensure the fiscal efficiency of your assets. Trust Legal.ge and pay only what is legally required.
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