The Essence and Rates of the Property Tax of an Individual
The property tax of an individual is a tax of local character defined uniformly by the Tax Code of Georgia, and its rate depends on the annual income of the family: the amount of the tax depends not only on the value of the property but also on how much the family receives as income. This page explains which property is taxed, how the rate is determined, when declaration and payment take place and which exemptions exist — according to the exact norms of the Code.
The Object of Taxation and the Payer
A physical person pays the property tax, first of all, on immovable property in his or her ownership — including unfinished construction, buildings or parts thereof; also on yachts, helicopters, airplanes and light vehicles determined by code 8703 of the national commodity nomenclature. In addition, tax is levied on property received in leasing from a nonresident and, where economic activity is carried out, on balance assets, uninstalled equipment and property leased out. A separate rule concerns property registered in the name of a deceased person: the payer is the person in possession or use of the property, except where it has been transferred under a lease, rent or usufruct contract.
Rates According to Family Income
The annual rate on the taxable property of a physical person is differentiated by the income of the family during the tax year. For families with income of up to 100 000 GEL the rate is not less than 0.05 and not more than 0.2 percent of the market value of the property at the end of the tax period; for families with income of 100 000 GEL or more it is significantly higher — not less than 0.8 and not more than 1 percent. Family income includes all income, including benefits, without regard to tax allowances: income from economic activity, unrelated income and accrued salary; for small business status — 25 percent of the income under the special regime, for a market trader — 15 percent of sales income. Income does not include, for example, property received by inheritance or gift from family members, or income from the sale of a dwelling owned for more than 2 years. The liability is determined at the rate effective on 31 December, and the tax is computed proportionally to the time of ownership.
Declaration and Payment
The tax period is the calendar year. The tax of a physical person is computed by the tax authority on the basis of the declaration filed no later than 1 November; the declaration covers taxable property according to the past year, and taxable land — according to the current year. The tax itself is paid no later than 15 November. In certain cases there is no obligation to file: where, given the exemptions, no liability arises (a past declarant is then notified), or where the declaration has already been filed or the tax assessed for the previous period — the authority then charges the tax programmatically.
Exemptions Worth Knowing
Exempt from the property tax is the taxable property of a physical person, except land, where the income received by his or her family during the year preceding the current calendar year does not exceed 40 000 GEL. For land, special exemptions are provided: for example, agricultural land plots of up to 5 hectares owned by a physical person as of 1 March 2004, an analogous exemption for internally displaced persons as of 1 January 2011, plots located in highland settlements, property in occupied territories and others. It is important that the established exemption does not extend to a land plot transferred to another person by lease, usufruct, rent or another such form; and where the transfer takes place after the filing deadline has passed, the person nevertheless loses the exemption — in that case a declaration must be filed and the tax paid by the end of the year.
Frequently Asked Questions
Below are answers to the questions most often asked about the property tax of an individual.
Which rate applies to my family?
With income of up to 100 000 GEL — not less than 0.05 and not more than 0.2 percent of the market value of the property; above 100 000 GEL — not less than 0.8 and not more than 1 percent.
Which property is taxed for a physical person?
Immovable property in ownership, including unfinished construction, as well as yachts, helicopters, airplanes and the light vehicles specified by the determined code.
When is the tax not due?
Where the family income of the previous year does not exceed 40 000 GEL, the property of the physical person, apart from land, is exempt from the tax.
When must I file and pay?
The declaration is filed no later than 1 November and the payment is made no later than 15 November; in certain cases no filing is required and the tax authority charges the tax itself.
How We Help on Legal.ge
The specialists of Legal.ge will help compute the property tax correctly: we determine how family income is counted, assess the rate range, verify exemptions and help prepare the declaration. Contact us — an exact computation saves both overpaid and unassessed amounts.