Property Tax for Businesses in Georgia: How It Works and What to Watch Out For
- Tinatin Tolordava
- May 27
- 8 min read
Table of contents
What Is Property Tax in Georgia and Who Pays It?
In Georgia, property tax applies to anyone who owns or uses buildings, land, or commercial space. This includes both local and foreign-owned companies. If your business owns an office, shop, warehouse, or commercial apartment, you're legally required to file a property tax return, even if the property isn’t being used right now.
Georgia’s tax system splits land and building taxation into two separate categories:
Property tax covers the building or structure.
Land tax applies to the plot it stands on.
So if your business owns both, you’ll be filing for both. If you lease, check if your contract shifts the tax obligation to you. It’s common.
This isn’t just for large companies. Even a freelancer with registered business activity operating out of an apartment needs to understand how this works. As Georgia's economy continues to grow, more companies, from logistics firms to IT startups, are dealing with this local-level tax.
How Property Tax Is Calculated in Georgia
Property tax in Georgia is calculated based on cadastral value, which is the officially recorded value of your real estate as set by the municipal land registry. Each municipality sets its own annual rate, usually between 0.1% and 1%.
What affects the rate?
Where the property is located (Tbilisi vs smaller towns)
The function (office, warehouse, retail, residential use)
Whether the asset is owned, subleased, or under construction
The tax base is determined by the local valuation authority, and while you can challenge it with your own expert report, that new value must be approved and updated by the Revenue Service to apply.
Georgia’s tax system does not bundle land and building taxes. That means your land can be taxed even if your building is exempt under business activity.
Stay aware of valuation trends. If your property’s cadastral value increases, so does your tax, even if you made no changes. Business owners should check this yearly with their accountant or service provider.
If your building is used entirely for software development or R&D, and you hold Virtual Zone or International Company Status, you may qualify for exemptions. For more on that, refer to Georgia’s Income, Profit, and Property Taxes: What Every Business Should Know.
Property Tax Deadlines and Compliance Rules for Businesses
Here’s what most businesses forget: even if you owe zero, you must still file.
Deadline to file: November 1 annually
Where to file: Through your company’s account on RS.ge
Penalty for missing the deadline: Fine + daily interest
You’re also expected to update the Revenue Service if your property’s use changes. For example, switching your registered business address or turning a personal apartment into office space should be declared.
If you have company formation in Georgia but haven’t updated the property registry, your filing could be flagged. Municipal and federal systems cross-check records.
The Revenue Service also compares your Georgia tax return with income from rental activity. If you’re collecting rent but haven’t declared the space or listed it under your company, you could be audited.
We’ve broken this down further in How Corporate Tax Reporting Works in Georgia, which includes a walkthrough of syncing profit tax and property tax filings.
Property Tax Exemptions You Might Be Missing
Georgia offers generous property tax exemptions, but only if you follow the rules.
Who qualifies for 0% tax on buildings:
Companies registered under Virtual Zone Status
Companies with International Company Status operating in approved sectors
Assets used solely for core business activity (like IT or exports)
What’s not covered:
Land is never exempt
Mixed-use property is not eligible unless fully separated
Exemptions do not apply automatically, you must apply
To apply for an exemption:
Gather ownership documentation
Show proof of business use (utility bills, photos, employee logs)
Submit your request to the Revenue Service, and in some cases, to the local municipality
We often see founders assume that their status means they don’t need to file. That’s a mistake. Even exempt companies must declare their assets and file zero.
Need help navigating this process? Gegidze specializes in tax status structuring and can handle exemption applications, business classification, and communication with local tax offices. It’s especially useful if you're new to company formation in Georgia or operate in multiple cities.
Holding Property Under a Business vs. Individual Name
If you're buying property for business use in Georgia, you have two main options:
Option 1: Buy it under your own name
Simpler paperwork
Easier to sell later
But: if your company uses the space, you’ll need to declare income and potentially register for VAT
Option 2: Buy it under your company’s name
Lets you claim depreciation
Can apply for business-use exemptions
Works well for reinvestment and long-term asset strategy
This choice affects your Georgia residence permit by investment, too. If your goal is residency through property, individual ownership may work better. But if you want to scale a business and reinvest profits into real estate, holding the asset in your company name gives more flexibility.
Many founders assume the simpler option is best. But for tech companies or property investors targeting growth, holding property under the company often pays off, especially when coupled with the right tax status.
Want to run through your options? Gegidze offers custom consultations on ownership structures and tax strategy.
If you're operating a business in Georgia or planning to invest in local property, the legal entity holding the property matters.
Owning property under a business name can offer benefits in terms of accounting, liability protection, and long-term tax planning. You can deduct depreciation, reinvest profits tax-free under the corporate structure, and potentially sell the asset through share transfers rather than asset transfers, which may minimize capital gains exposure.
But it comes with responsibilities. You’ll be expected to file company tax declarations and annual reports through the Revenue Service portal. If the business owns multiple properties or high-value assets, the scrutiny from tax authorities also increases.
Owning property as an individual, on the other hand, is simpler to manage in the short term. You’re only subject to property tax filings, with no need to prepare full corporate tax reports. However, your personal liability is higher, and you won’t benefit from reinvestment exemptions that apply to LLCs or Virtual Zone companies.
If you're considering applying for the Georgia residence permit by investment, property ownership in your personal name might align better with your residency goals.
International founders should also keep in mind that company info in Georgia is publicly searchable. If you want to keep your name off public real estate records, you may prefer to register through a corporate entity.
Common Mistakes That Trigger Audits or Penalties
Penalties related to property tax in Georgia are more common than most founders realize and often due to avoidable missteps.
Missing the filing deadline is one of the most frequent errors. Even if you don’t owe much, failing to submit your property declaration leads to fines. Georgia’s Revenue Service expects timely reporting and may place liens on business accounts if noncompliance continues.
Declaring the property under the wrong entity can cause issues too. For example, if the property is used by your LLC, but owned by you personally, and you're not reporting rental income between the two, that’s a red flag.
Another common mistake: using residential property for business without notifying tax authorities. If you’ve converted a flat into an office or short-term rental, the Revenue Service expects you to update its status. Otherwise, you may be underpaying your tax rate or misclassified altogether.
Want to learn more about frequent tax reporting errors? See Common Tax Reporting Mistakes Companies Make in Georgia to stay on the safe side.
When Property Tax Intersects With Corporate and Income Tax
This is where many founders get confused.
Let’s say your company owns a mixed-use property. You operate a cafe on the first floor and rent out the upper floors. You’ll need to declare property tax based on usage: commercial vs. residential and also report rental income under your corporate tax filings.
Even more importantly, business-owned properties are often listed as assets on your company’s balance sheet. That means they’re subject to depreciation, which can reduce your corporate profit tax obligations. But it also means you need to maintain accurate documentation.
Any inconsistencies between your property tax declaration and your corporate or income tax filings will trigger questions. If you’re claiming the same property in two ways, or forgetting to declare it altogether, expect a call from the tax office.
To understand how these taxes intersect and avoid costly oversights, refer to our guide on Georgia’s Income, Profit, and Property Taxes.
How to Stay Compliant Without Micromanaging It
Nobody wants to micromanage tax filings. But letting them slip can shut down your bank account or freeze your business registration.
Your accountant should take the lead in preparing and submitting property tax declarations each year. If you're holding real estate through a company, your accountant should also be tracking how the property impacts corporate filings, especially depreciation and VAT treatment if applicable.
When should you involve a legal or tax agency? If you’re buying land, registering property under a new entity, or converting property usage (for example, from residential to commercial), don’t do it alone. Georgian property law and tax compliance rules are complex. Mistakes are expensive and hard to undo.
It’s also worth automating some tasks. The Revenue Service portal allows you to set reminders, submit filings, and track previous reports. Use it.
Want a full view of your compliance obligations? Our bookkeeping and tax accounting guide covers what every founder needs to track monthly and annually.
Final Thoughts
Property tax in Georgia isn’t the most expensive tax you’ll face, but it’s one of the easiest to mess up.
If your property is used for business, tax rates, reporting duties, and exemptions all depend on how you’ve structured ownership and usage. Treating it like a “set and forget” issue can lead to fines or audit flags.
Whether you're just acquiring land or scaling your real estate footprint across Tbilisi or Batumi, staying on top of property tax rules is essential. Use this guide as your baseline and get help when things feel unclear.
Need help setting up accounting for a property-holding company? Or not sure whether your residential property counts as business use? Talk to Gegidze. We help founders structure it right from the start.
Frequently asked questions (FAQ)
Who pays property tax in Georgia?
Businesses and individuals who own buildings or commercial real estate in Georgia must file and pay property tax. This includes local companies, foreign-owned entities, and individuals using property for business purposes.
