The process of acquiring real estate in Georgia
The procedure for purchasing real estate in Georgia is open to foreign buyers and is characterized by relative simplicity and transparency. It is important to know that there are virtually no significant restrictions for foreign property owners in Georgia, and additional costs remain low. Real estate transactions are usually concluded quickly, thanks to simplified procedures for property registration. Nevertheless, the Georgian real estate market has its own peculiarities, which you should learn about in detail.
Rights and obligations of foreigners when buying real estate in Georgia
Rights:
Freehold purchase of real estate:Foreigners can purchase any type of real estate in Georgia, except for agricultural land, available only through inheritance or with a second Georgian citizenship.
Visa privileges:Citizens of the Russian Federation, Belarus and Ukraine have the right to stay in Georgia without a visa for 365 days. The term starts again after leaving the country. After purchasing real estate worth $100,000 or more, you can apply for a residence permit.
Responsibilities:
Annual Tax:Property owners in Georgia are required to pay an annual tax.
Income Tax:The seller may owe income tax at the time of the transaction.
Selecting a real estate category:It is important to consider the differences between categories of real estate, such as apartments and land with buildings. When you buy a house, you often also buy a plot of land with a building on it.
Georgiareal estate searches can be done through a variety of sources, including online portals, local real estate agencies, and Georgia websites:
You can browse offers, sign up for updates and leave requests to find a property that meets your requirements.
Realtor Services
In the Georgian real estate market, a realtor is not a mandatory participant in the purchase procedure. You can negotiate with the seller yourself and conclude the deal at the House of Justice. This feature of the Georgian market makes the purchase process more direct and deprives the seller of the obligation to pay the realtor's commission, as the commission is usually fully borne by the seller.
It is important to note that Georgia is a small country with a friendly society, and it is often easy to recognize the owner of the property you are interested in. This also affects the real estate market, as realtors may face competition and many properties are sold through multiple agents.
Nevertheless, the role of a realtor can be useful, especially if you are not familiar with the Georgian real estate market and local procedures. A realtor can help you find suitable properties, negotiate with sellers, and support you with the transaction and document verification.
So, deciding whether you need a realtor depends on your preferences, knowledge of the real estate market, and experience with such transactions.
The process of buying real estate and the contract of sale
The process of buying real estate in Georgia involves several steps, and it is important to follow them to ensure a safe and transparent transaction. Here is the step-by-step procedure for buying real estate in Georgia:
Site Selection:Choose the property you want to buy. It can be an apartment, a house, a plot of land or commercial premises.
Legal clearance check:Check that the property is legally clean. Make sure that the property is registered to the person who appears to be the seller and that there are no encumbrances such as mortgages or seizures.
Checking the seller's status:Find out the seller's status and marital status, as this can affect the transaction. For example, the property may have been purchased during marriage and the title may be registered to one of the spouses.
Conclusion of a contract of sale:If the property is clean from legal problems, conclude a sale and purchase agreement. The contract should be drawn up in a language that both parties can understand, as well as in Georgian.
Contract Signing:The contract can be signed either directly at the House of Justice (directly between buyer and seller) or at a notary. Notaries often have access to the public registry and the right to accept documents for registration.
Registration of the transaction:After signing the contract, the transaction goes to be registered in the public registry. This stage provides an official record of your rights to the real estate.
Formalization of complex transactions:If the transaction involves complex terms such as deposits, mortgages, down payments, installments or mortgages, it is important to draft the contract in advance with all the specifics of the transaction in mind. A notary can assist you in this process and ensure that your interests are legally protected.
When a Notarized Contract is Necessary
A notarized contract is worth considering in cases where you need additional guarantees that all the terms of the transaction will be fulfilled. In particular, it makes sense when there is a material obligation in the transaction and there is a risk of non-performance.
Example:You are the seller and have agreed to installment payments from the buyer after the transfer of ownership. In this case, if the buyer does not fulfill his obligations, the notary can help you to obtain a writ of execution, bypassing the enforcement office, and claim the amount owed to you.
Concluding a contract in notarized form gives greater legal protection and ensures faster and more efficient dispute resolution. This is especially important if the transaction involves large financial commitments.
Real estate purchase deposit
In Georgia, as in the rest of the world, the buyer usually pays a deposit to book the property. However, the terms of the deposit may vary and depend on the agreement of the parties. Advance payments and installments are also used here.
A deposit is paid when the property is of special interest or is favorable in price. It serves as a way of securing monetary obligations for both the seller and the buyer. If the buyer withdraws from the transaction, the deposit is not refunded. If the seller cancels the deal, he has to return the deposit in double the amount. It is important that the terms of the deposit can be changed by agreement of the parties, but they are usually recommended to protect the interests of both parties.
Real Estate Payments
To pay for real estate in Georgia, it is not always necessary to open a bank account in a local bank. Many buyers pay directly by transferring funds from a Russian account to a Georgian account.
However, currency control issues may arise in the country of the sender of the money when making the payment.
It is also possible to pay in cash, where the transfer of money is confirmed by a receipt in a simple written form or in the presence of a notary or witnesses.
The choice of payment method depends on your comfort and agreement with the seller. Each method has its own features and advantages.
Transaction Process:
In-person presence:In Georgia it is not necessary to be personally present when buying real estate. The transaction can be concluded on the basis of a notarized power of attorney. The power of attorney can be used to conduct all stages of the transaction, including selection of the object, conclusion of the sale and purchase agreement, settlements, registration of ownership and even conclusion of agreements with utility providers.
Purchasing Procedure:In Georgia, the real estate purchase procedure usually takes no more than half a day. The transfer of ownership is done through registration of the sale and purchase agreement in the public registry, and this information is public.
Additional Costs:An important advantage of Georgia is the absence of taxes on the purchase of real estate. The fee for registration of ownership rights at the House of Justice depends on the urgency and ranges from 50 to 200 GEL ($16-$65). Additional costs may arise when using the services of an interpreter and notary, as well as when buying real estate with a mortgage.
Facility Verification:An inspection of the property may be required when purchasing an older property or a historic property. In this case, it is necessary to make sure that all necessary documents are in place and to conduct a historical analysis of the transfer of ownership. Verification of land plots is also important, especially if there is a need to change their status.
Realtor Services:The realtor assists in selecting the property, organizes the inspection, and participates in drafting the sales contract. The realtor's commission is usually paid by the seller and is 3% of the sale price.
Linguistic Aspects:If you do not speak Georgian, the sale and purchase agreement is drawn up in a language you understand and in Georgian. An interpreter must also be present at the House of Justice and may be required to translate the documents.
Peculiarities of the real estate market in Georgia
Girao - real estate leasing:In the Georgian real estate market, there is a form of leasing known as “girao.” This is a long-term loan agreement secured by real estate, allowing the lender to use the property for an agreed period of time. The amount of girao can be approximately one third of the market value of the property.
Fraudulent schemes:It is important to be cautious and check documents carefully when making girao deals. Fraudulent schemes are sometimes encountered in the Georgian real estate market. Data about the real estate and the owner of the object must be correctly indicated in the contract.
Limitations in gyrao:Pledge of an apartment by an individual in favor of another individual is possible only if the property will be used for residence. This restriction was introduced in the Civil Code of Georgia after cases of seizure of apartments from owners who could not repay the loan amount.
Girao's popularity:Girao is popular in Georgia, especially among Georgian citizens. Many people use it to purchase real estate without large initial investments or to rent it out for daily rent.
Housing Choice:The most popular among foreign buyers are apartments in the old districts of Tbilisi for daily rent, as well as modern residential complexes with infrastructure and security. Historical buildings in the old city are also in demand.
Investments and commercial real estate:Many transactions in the Georgian real estate market are investment-oriented, especially in apart-hotels in resorts. Commercial real estate such as hotels or properties that can be used for tourism or industrial purposes are also in demand.
Secondary and primary real estate:New real estate is being actively built in Georgia, especially in Tbilisi and Batumi. When buying a new building, it is important to choose a developer carefully, as the Georgian market does not have the same mandatory standards and licensing as some other countries.
Purchasing Procedure:The procedure for buying real estate in Georgia is the same for both primary and secondary markets. It is important to verify the property, the history of the home, encumbrances and the status of the owner
What Black, White and Green Frame Means
Black, white and green frame are terms used to refer to the different stages of real estate construction.
Black frame: At this stage, literally only the frame of the building exists. The exterior walls are built, utilities such as electricity and water are connected to the outside of the building, but there is no wiring or partitioning inside. All the communication and finishing works are to be done.
White frame: At this stage, all utilities such as water, electricity, gas and telephone are already installed inside the building, as well as heat and noise insulation. Partition walls are installed, ceilings are finished, windows and entrance door are installed. At this stage, only finishing work remains to be done, such as wallpapering, painting, tiling and so on.
Green frame: At this stage, the building is completely finished in terms of construction and renovation. Interior and exterior works are completed and the facility is ready for occupancy or use. All that remains to complete the facility is the delivery and installation of furniture and appliances, or the facility can be provided turnkey with furniture and equipment already installed.
Buying a property at the “black frame” stage can be profitable, as prices will be lower, but additional costs and efforts will be required to complete the finishing works. On the contrary, green frame properties are ready to live in or use almost immediately, making them more attractive to foreign buyers. However, it can be more expensive and is limited to a typical layout.
Loans and installments for foreigners
As for mortgages and installment loans for foreigners in Georgia, they are available with different terms and conditions, including down payment and loan terms. Banks offer different programs, and terms may vary depending on the applicant's income and other factors.
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