Townhouse in Georgia

Definition and Legal Structure

A townhouse in Georgia refers to a low-rise attached single-family residential unit sharing structural side walls with neighboring properties. Under Georgian real estate law, townhouses can be legally structured under two main ownership formats:

1. Individual Cadastral Code (Freehold Property): The buyer receives exclusive full ownership title to both the residential building unit and the underlying individual land plot, registered under a distinct cadastral code at the National Agency of Public Registry (NAPR).

2. Shared Condominium Ownership: In gated communities or integrated developments, the buyer owns the specific internal apartment/unit space while sharing joint ownership of the underlying land plot, access roads, perimeter fencing, and shared amenities (e.g., swimming pools or parks) with other community members.

Foreign Ownership and Land Restrictions

Foreign nationals can purchase townhouses in Georgia without restriction, provided the underlying land plot is officially designated as non-agricultural. Under the Constitution of Georgia, foreign citizens cannot directly acquire agricultural land. If a townhouse development is situated on agricultural land, the commercial developer must legally reclassify the land to non-agricultural status before executing the sales contract and transferring title to a foreign buyer.

Taxation and VAT Requirements

• Value Added Tax (VAT): Sales of newly constructed townhouses directly from corporate developers are subject to an 18% VAT. Pursuant to Georgian tax regulations, this 18% VAT is always included in the developer's advertised sales price. Secondary market purchases from individual owners are exempt from VAT.
• Property Tax: Physical persons owning real estate in Georgia are subject to annual municipal property tax ranging from 0.05% to 1% of the property's estimated market value, determined by the owner's household income generated within Georgia. For individuals with zero Georgian-sourced taxable income, the property tax rate is 0%.
• Capital Gains Tax: Personal income tax on gains from real estate sales by individual owners is 5%, provided the property was held for less than two years. After a two-year holding period, capital gains are tax-exempt.

Residence Permit Qualification

Foreign buyers purchasing a townhouse valued at 150,000 USD or more qualify to apply for a short-term real estate residence permit in Georgia. To substantiate eligibility, an independent accredited valuation report must be submitted to the Public Service Hall alongside the NAPR ownership certificate.

A foreign investor purchases a newly completed 180 m² townhouse in Lisi, Tbilisi, directly from a developer for an advertised price of {{data:townhouse_price_example}} USD (which legally includes the 18% VAT). The property includes a registered 120 m² non-agricultural land plot. The buyer's legal counsel verifies at the Public Registry that the land classification is non-agricultural and that the property possesses a distinct cadastral code. An independent accredited appraisal values the property above $150,000 USD, allowing the owner to successfully apply for a Georgian short-term residence permit.