Buying Property in Georgia: What to Check

Before buying property in Georgia as an investor, check five things: who owns it and what the public registry records against it, what the building permit allows, what condition you are buying it in, whether it is residential or commercial space, and who is responsible for each step until title passes to you. This guide explains each check from a developer’s side of the table. LD Estates develops its own projects in Tbilisi and sells them directly, so these are the questions we answer for buyers, and the ones we would ask ourselves.

Who owns the property, and what is registered against it?

Ownership in Georgia is recorded in the public registry, kept by the National Agency of Public Registry. An extract from the registry shows the owner and every registered burden: mortgages, court-ordered restrictions on sale, servitudes over part of the plot. Ask for a current extract, not one that is months old, and read the burdens before you read the brochure. A registered mortgage or restriction does not rule a purchase out, but it means the transaction has to include the steps that release it, and you should know them before you pay anything.

As an example, we publish what the registry records for our own current project, including the burdens and the sequence that releases them: Avlabari building: legal status and the path to transfer.

What does the building permit allow?

A construction permit in Tbilisi is issued by order of the city’s architecture service, and it can be amended several times. Ask for the permit and every amendment, with their order numbers and dates. Three things in it matter most to an investor:

The building’s function. The permit names what the building is for, for example residential or office. That decides what the units are in law, whatever the marketing calls them.
The approved drawings. A render shows a proposal. Only the approved drawings show what may be built. Floors, terraces or rooftop units that are not in the drawings need a further amendment, which may or may not be granted.
The permitted construction period. It tells you the date by which the building has to be completed under the current permit.

Black frame, white frame, green frame: what are you buying?

Tbilisi developers describe a unit’s condition at handover by frame. In common use, black frame means the structure is complete and the interior is unfinished; white frame adds the preparatory works, such as plaster, screed and service connections; green frame is finished and ready to use. The terms are not defined in law and developers use them differently, so do not rely on the label. Ask for the technical specification that lists, space by space, what is included at handover and what is yours to complete, and make it part of the contract.

Apartment or commercial unit: why does it matter?

Many investment units in Tbilisi are sold for letting, and not all of them are residential. A unit in a building whose permitted function is commercial is non-residential space, even if it is laid out and furnished as an apartment. That can affect how you may use it, how its purchase and its rental income are taxed, whether a bank will lend against it, and whether it can be used as a home address. Do not assume a commercial unit is treated like a residential apartment. Ask what the permit says, and put the questions about your intended use to a Georgian lawyer and a tax adviser before you sign.

Can foreigners buy property in Georgia?

Yes. Foreign individuals and companies can buy apartments, houses and commercial property in Georgia on the same terms as Georgian citizens, and the purchase is registered in the public registry like any other. Buying property does not by itself give a right of residence.

Which taxes should you ask about?

Ask three questions, and have the answers confirmed by an independent Georgian tax adviser for your own status:

Does the price include VAT, and can you recover it?
How will the rental income be taxed, given your status and the way the unit is let?
What applies when you sell the unit later?

The answers depend on the unit’s legal function, on whether you buy as an individual or a company, and on whether you register for VAT. Treat any tax saving quoted in marketing material as a question for your adviser, not a fact.

What should you ask the developer?

What have you completed? Projects you can visit, with their permits and what happened to them.
Who completes what? The split between the developer’s works and yours, in the technical specification.
When, and what if it is late? The programme, and the remedies in the contract if it slips.
How and when does title pass to you? Each step, including the release of any registered burden and the registration of your unit as a separate property.
What is not included? Future phases, neighbouring plots and extra floors are often shown beside an offer. Ask which of them you are buying and which remain the developer’s own project and risk.

Buying directly from the developer means you put these questions to the party that holds the permit and the title, and the answers can go straight into the contract.

What return should you expect?

We do not publish return figures, for our own projects or for the market. What a unit earns depends on its location, its legal use, its fit-out, who operates it and how the market moves, and none of that is guaranteed. Be cautious with projected returns in any offer, including the assumptions behind them. Build your own estimate from figures you can check, and test it: the scenario calculator on our homepage works only with the numbers you enter.

About LD Estates

LD Estates is a real estate developer in Tbilisi that builds its own projects and contracts with buyers directly. Its completed projects are Tabor Hill Villa, on land bought at municipal auction and permitted in a protected district; the Tabor Hill development site, sold fully permitted and ready to build; and the Old Tbilisi Office, a distressed building in a regulated district renovated to heritage rules. Its current project is a black-frame commercial building in Avlabari, near Holy Trinity Cathedral: see the building, its status and the questions buyers ask.

This guide is general information, not legal or tax advice. Take independent advice on your own purchase.