Off-Plan Purchase in Georgia

Understanding Off-Plan Real Estate in Georgia

An off-plan purchase—often referred to as buying pre-construction—is the acquisition of real estate before construction commences or before the building receives its final state acceptance certificate. In primary urban hubs like Tbilisi and Batumi, off-plan transactions represent a major share of investment activity due to lower entry prices and flexible developer financing terms.

Legal Framework and NAPR Registration

Unlike jurisdictions relying solely on private developer agreements, Georgia provides strict public registry protection for pre-construction buyers:

• Preliminary Sales Contract: A binding agreement detailing payment schedules, building specifications, completion deadlines, and penalty terms.
• NAPR Registration: The preliminary contract must be registered at the National Agency of Public Registry (NAPR) via the Public Service Hall. This generates an official extract that legally assigns preliminary rights to the buyer, preventing the developer from reselling, mortgaging, or placing liens on the unit without the buyer's consent.
• Final Ownership Transfer: Once construction is finished and the local municipality issues the state commissioning act, the preliminary right is converted into full, unconditional ownership registration.

Construction Delivery Conditions (Frame Stages)

Off-plan residential units in Georgia are sold under defined completion states:

1. *Black Frame (Shavi Karkasi)*: Structural concrete shell, outer walls, exterior windows, and main door. No internal walls, plumbing, wiring, or floor screed.

2. *White Frame (Tetri Karkasi)*: Includes internal partition walls, plastered surfaces, utility connections (electricity, water, gas) brought to connection points, and finished floor screed.

3. *Green Frame (Mtsvane Karkasi)*: Advanced completion including installed heating pipes, completed electrical wiring, tiled wet areas, and prepped surfaces ready for paint or wallpaper.

4. Turnkey / Fully Furnished: Completely finished unit equipped with furniture and appliances, ready for immediate habitation or rental.

Taxation and Payment Structures

• Value Added Tax (VAT): Under Georgian tax code, sales of primary (new-build) property by developers are subject to 18% VAT. Legally and practically, this 18% VAT is always included in the developer's advertised unit price. Purchasers do not incur an additional VAT surcharge on top of the published sales price.
• Developer Installments: Most developers offer internal, interest-free payment plans over 12 to 36 months, requiring an upfront down payment followed by regular monthly or quarterly transfers.

An investor purchases an off-plan apartment in Tbilisi with an agreed purchase price of $100,000 USD (which fully includes Georgia's standard 18% VAT). The buyer pays a 20% down payment ($20,000 USD) and agrees to 24 monthly installments of $3,333 USD directly to the developer's bank account. Both parties sign the Preliminary Purchase Agreement at the Public Service Hall, and NAPR issues an extract confirming the buyer's preliminary right to the specific unit ID. Upon construction completion 24 months later and issuance of the building's completion act, the preliminary right is converted to full ownership status at NAPR.