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How To Buy Property In Tbilisi, Georgia: A Complete Guide

Posted by Expat Homes on March 6, 2021
| 3 Comments

This post will tell you everything you need to know about how to buy property in Tbilisi. It was written from the perspective of an expat.

Tbilisi, Georgia has become a popular destination for expats from all over the world. Georgia is a lovely country that has something for everyone–big city life with modern amenities, wine country, skiing, hiking and a rich, cultural history that dates back thousands of years.

Oh, and don’t forget about the amazing hospitality that is a source of national pride in Georgia. On your first visit to Georgia, you may be handed a bottle of wine from the immigration agent at the airport. Keep in mind that is not a marketing person on the other end of the immigration booth, it is the actual immigration agent. The bottles of wine look like this:

Tbilisi airport wine

The cost of living in Georgia is very reasonable by most standards. It is lovingly described by some as “first world living at third world prices.” That statement applies to just about everything in Georgia, including property in Tbilisi. It is no surprise that many foreigners like to buy property in Tbilisi.

The following is a list of common questions that come from people who want to buy property in Tbilisi. This should give you a good overview of what to expect.

Can foreigners own property in Georgia?

Yes, citizens of any country can own property in Georgia with the same rights as Georgian citizens. There is one notable exception, though: Georgian citizens are the only ones allowed to own agricultural land. All other property is fair game for everyone.

How do commissions work in Georgia?

Commission rates for real estate agents in Georgia are low. A seller can expect to pay 2-3% of the final sales price to an agent. A buyer will usually not have to pay anything for buyer representation (because buyer’s agents are paid by the seller).

Sometimes buyers will choose to pay an agent 1-2% to a buyer’s agent if the agent is bringing them properties that are not available anywhere online (i.e. off-market properties), or if the agent is doing extra work for a buyer who is not living in Georgia, such as construction property management, previewing properties, organizing a formal valuation, searching for tenants after construction is completed, etc.

What is required if I want to purchase a property in Georgia in order to obtain residency?

Georgia offers a one-year residency permit in exchange for investing in property. The market value of the property must be USD $100,000 or more for a one-year residency permit. The $100,000 number is NOT the purchase price–it is the market value. Just because you spend $100,000 does not mean the property is worth $100,000.

There are some sad stories from foreigners who come to Georgia, buy a property in Tbilisi that costs $100,000 (because they decided not to use an agent and didn’t know they were overpaying) and when they went to apply for their residency permit, they discovered the true market value of their property was only USD $90,000. NO RESIDENCY PERMIT FOR THEM! And now they are stuck with a property they would have to sell at a loss if they needed to sell it.

Also, buying a property in Georgia worth USD $100,000 or more does not guarantee that your official residency will be approved–it just means you are eligible to apply at that point. There are other steps to the application process that will determine whether you qualify or not. A quality agent or lawyer will be able to help you with a proper valuation of anything you are considering buying.

How do property taxes work in Georgia?

There are a few variables that determine the level of property tax that is owed on real property, such as the form of ownership (does an individual or company own it?), the income of the individual (do they make good money or not?) and the location of the property. In most cases, the total property tax rate will be between 0-1% per year.

If you want to buy property in Tbilisi and need help setting up your Georgian business or taxes, we recommend these folks. They are highly qualified, they know what challenges expats face and they charge reasonable rates. The last thing you want to do is get into tax trouble, especially in a country that is not your home country!

Are there any restrictions about landlords offering short-term rentals on websites like Airbnb?

There are no restrictions for short-term rentals in Tbilisi. Even though there are no restrictions, please keep in mind that any income earned from renting your Tbilisi property on Airbnb will be subject to income taxes in Georgia. Don’t worry, though. The income tax rates are very reasonable and filing is easy once everything is properly set up. Again, check here for a free consultation from expat tax experts who know what they are talking about.

How do I find a real estate agent in Tbilisi that I can trust?

We maintain a list of trustworthy agents who can help you buy property in Tbilisi. They have all been vetted by us, they all speak English at a passable level and they can all provide multiple references from other expats who have used them. We also maintain a list of agents who are fluent in other languages, such as Russian, Arabic and Farsi. Contact us and we will hook you up (for free).

Our most common request is foreigners looking for cheap apartments in Tbilisi they can refurbish and then rent on Airbnb or to long-term tenants. We can provide guidance with that process as well.

Is there some sort of central website where I can search all properties for sale, like Zillow or the MLS in the US, or Rightmove in the UK?

There is nothing in Georgia like the MLS that exists in the US or Canada where all the available properties are posted for sale. Anyone who wants to buy property in Tbilisi will have to surrender to the local methods and customs.

There are a few websites where Georgian agents and property owners can advertise their properties for sale and for rent. It won’t take you long to figure out those websites are not ideal. None of them have anywhere close to a comprehensive selection of properties for sale in Tbilisi.

Some of the common complaints from the property search websites in Georgia:

  • Agents and owners never respond to inquiries
  • Many of the properties on the website are no longer available for sale (they were either sold or rented years ago and are left up there for “bait and switch” purposes)
  • Whoever responds to the message or call only speaks Georgian
  • The photos are garbage (clearly taken with a ten-year old cell phone, no lighting, blurry, etc.)
  • The address is missing or wrong (sometimes on purpose)
  • The same property is listed with multiple people at different prices and/or different addresses
  • Once I contact an agent on the website, they spam me all day, every day with photos of their listings on Messenger or WhatsApp, and none of those properties meet my criteria

The other thing to know about the property search websites in Georgia is that the DEALS never make it to the websites. By the time a property is posted online, it has already been “picked over” by those in the know (and all of those people took a pass on it…usually due to the price or the condition).

The best agents in town know who to call when they find a deal so they can have a quick sale, so the best properties never make it online. Those are commonly known as “off market” sales and they happen in every market in the world. It is simply a private sale that is never advertised to the public.

Feel free to contact us if you would like an introduction to a high-quality agent who works off-market property the areas where you are searching.

What do people mean when they say black frame, white frame or green frame?

Black frame, white frame and green frame are terms used to describe the stage of development of the property.

Many properties (namely apartment buildings) sell the units at different levels of completeness. To make it more confusing, the official definition of the framing can be different depending who you ask.

Some unscrupulous property developers, property owners and agents in Georgia have been known to use the framing terms incorrectly (on purpose) in order to assign a higher value to the property and see if a naive foreigner will buy it from them at that price. The foreigners who decide to go property hunting on their own because they think they are smart enough to navigate the market are the ones who get duped. But, hey, at least they can brag to their friends that they “saved” a small agent commission of 2% when they overpaid for their property by 15%! (insert eye roll emoji here).

If you want to buy property in Tbilisi, you should enlist the help of a local agent. Georgian agents are like agents in any other country: There are a few you can trust who will do a great job for you, and many, many, many more that you should avoid. We can help you find one if you’d like. Contact us here if you need some help finding one (there is no fee for our help).

There are some ongoing arguments about the exact definitions of these terms. These descriptions will give you a general idea, although you may find certain agents, owners or developers defining them with some differences from what you read here. 

Black frame: This is a term used to describe a unit that is basically a shell (the name comes from the dark grey color of the concrete used to make the floors and walls). Black frame properties have a door, windows, a floor and a ceiling…but not much else. Sometimes you will find basic plumbing and electricity to the unit, but the plumbing and electricity will not be arranged in a usable manner without further work on the part of the buyer. The building itself will have things like staircases, an elevator, hallways and a lobby.

It is up to the buyer to finish the unit with internal room customization, and run the plumbing, electricity and HVAC to the rooms that need it. Buyers of black frame properties like them because they can create the custom living arrangements that work best for them, and black frame properties are cheaper than white frame, green frame or turnkey properties.

White frame: White frame properties are partially finished, which usually means they have plastered walls, electricity, plumbing and gas in all the right places, finished floors, interior walls, lighting and HVAC. I say usually because there is no official, legal definition of “white frame.”

WARNING: Some developers will say they are going to deliver you a white frame apartment, but their definition of white frame and your definition of white frame could be very different. If you do not specify in your contract with the developer what is expected with the white frame delivery of your unit, you will most likely be disappointed in the end. Again, a quality real estate agent who speaks the native language and knows the developer “tricks” is worth their weight in gold. They will help you navigate situations like this and make sure your interests are protected in the transaction.

Green frame: Green frame apartments are finished apartments that are ready for move-in. The only thing missing is furniture, and any cosmetic customizations you would like to do (like painting walls).

WARNING: Some developers will say they are delivering green frame finishes, when they are actually delivering “white frame +” finishes. Again, it is critically important to spell out ALL the details of what’s expected with the final delivery in your purchase contract.

Turnkey or renovated: Turnkey apartments are completely finished, furnished and ready for living whenever you arrive with your suitcase.

mortgage in tbilisi

Can a foreigner get a mortgage to buy a property in Tbilisi? What are the steps?

Yes, it is possible for foreigners to get mortgages in Georgia. Just because it is possible does not mean it is easy, or advisable.

First, you will need to have proper residency or citizenship in order to obtain a mortgage in Georgia. You will also need to show proof of income (usually through tax filings from your income earned in Georgia). Just like banks everywhere else in the world, Georgian banks will base the amount you can borrow for a mortgage on your income level. They want to be sure you can repay your mortgage.

The mortgage interest rates in Georgia are hefty. At the time of this writing (2021), mortgage interest rates are 12-14% in Georgia, depending on your situation.

It is also important to note that you will need a significant down payment before the bank will consider giving you a mortgage. It is common for banks to require a 50% down payment in order to obtain a mortgage. Also, mortgages in Georgia are usually 10-year terms.

Because of the residency requirements, income requirements, high interest rates, large down payments and short mortgage terms, many foreigners in Georgia choose to pay cash for their properties instead of messing about with mortgages.

What are some of the things that real estate agents in Tbilisi do that I should “watch out” for?

First, you should understand that there is no licensing or regulation for real estate agents in Georgia. If you want to become a real estate agent, you simply go to LinkedIn and change your job title to “Real Estate Agent.” Congratulations! Now you are an agent.

As you can imagine, certain challenges emerge when anyone with a pulse can become a real estate agent. Also, there is no mechanism for the government to punish agents who are unethical or dishonest. Buyer beware!

Here are a few of the agent tricks that you should know. Some of these are nothing more than annoyances, and others can cause financial harm if you are not careful.

  • Posting a property for rent or for sale that is no longer for sale or for rent. Agents do this so you will contact them and they can (hopefully) convince you to buy or rent something else. It is commonly known as a “bait and switch.” The properties they post to do this are usually too good to be true–the price, location and finishings simply do not match what you find in that area. Remedy: Immediately stop working with any agent who says something like, “That property is no longer available, but I have a similar one…”
  • Posting a property for rent or for sale that does not exist. This scam is similar to the bait and switch. The difference here is they agent is using the “too good to be true” property to convince people to wire money for a deposit in order to hold or reserve the property. Of course, because the property does not exist, that money is gone. Remedy: Never send money to reserve a property that you have not visited in-person.
  • Using a property that is already posted to create a new property listing with a different address. Agents do this to trick consumers into contacting them. It’s a variation of the bait and switch approach, and is common with agents on the property portals.
  • Charging a premium price for foreigners from “wealthy” countries. You may be quoted a different price for an apartment if the agent or owner learns that you are from a wealthy country. This is another reason it is important to have a local agent who is a native Georgian speaker making the first contact when you plan to buy property in Tbilisi. If you make the first contact, you will be putting yourself at risk here and may be charged a premium for no reason other than your country of origin.
  • Asking for the rent to be paid in euros or US dollars instead of lari. First, it is illegal to transact ANY business in Georgia in a currency other than Georgian lari. However, some landlords and owners prefer to be paid in euros or dollars. They may offer a discount if you pay in euros or dollars, but Georgian banks have been known to reject transactions and/or close your bank accounts if they believe you are breaking this law. While the laws are clear about this, in practice, many landlords and tenants arrange a way to have the rent paid in the currency of their choice.
  • Presenting another agent’s listing as their own. Some agents in Georgia will “borrow” another agent’s listing without that agent’s permission, add their fee to the price and market it as if it is their own listing. This results in the consumer paying more than market value for the listing because there are several agents who will be earning fees instead of just one agent.

What do I need to know about new development projects?

There are a few good developers who are reliable and build high-quality projects. There are many more developers in town who do not build to the same standards.

The risk you run when you purchase in a development that is under construction is that there can be significant construction delays, or the development could simply run out of money and never be finished.

The advantages of buying property in Tbilisi in a new development are that you have some control over the layout and the finishes so you can make the place fit your needs and style. You may also get a discount if you are one of the first people to buy in a new development project.

Developers do not typically post their prices online. Why? Because they want you to call them or register on their websites. One of the reasons they do this (but not the only reason) is so they can avoid paying a buyer’s agent you may be working with.

If you directly call a developer instead of having your agent call first, they will try to cut the agent out of the deal. The purchase price will always be the same to you in the end, but they developer is trying to save the 1-3% commission they usually offer agents who send clients to them.

There is no financial savings to YOU by purchasing in a new development without using an agent, only a savings to the developer. Agents will help you navigate the process and serve as an intermediary between you and the developer. It is always a good idea to enlist the help of an agent when buying new development properties. They are free to you, so why not?

You can search properties in Georgia here.

Do you have questions we haven’t answered here? Please let us know. We will send you a cookie if we end up adding your question to the list. You can contact us with any questions or comments here.

3 thoughts on “How To Buy Property In Tbilisi, Georgia: A Complete Guide

  • FABIO MICIONI
    on March 20, 2021

    Really good informations. I think that Georgia it’s a developing country and most of the western rules simply don’t apply here so I had to learn a lot about their culture. By law, I hear that neighbors have a lot of power over let’s say you wanna move your front door in your apartment and you need the neighbors to sign off. Well in some cases you see people who have lived together for 40 years no problems. In other cases if you are the new guy some of these neighbors especially in central locations of Tbilisi who maybe living in older buildings, older people, people who lived in the soviet era see you as the “new” guy, the foreigner with a lot of money so I think that is more difficult and what I wanna know now is what is the deal with the neighbord? what really estate agents can prove to us as foreigner that there will be no problems with them. Talking about which location, which type of property, what is the price etc it is a good common question but what about this situation, the neighbord are agreeable etc. Cause everytime is hard and difficult for me and for foreigners I think to trust a real estate agent that just will say ” yeah it can be done” but this meaning that they don’t wanna talk to the neighbord. Cause I think that the culture, the people and the comunity have a really important part of your transaction when you buy a property more then everything else. So this, I think, will be something that really people can appriciate if you can talk about and if real estate agent can talk about it too. Thank you in advance have a beautiful day.

    • on March 22, 2021

      Thank you for your comments. Yes, there are sometimes situations where neighbors can delay or prevent certain improvements that owners want to make on their properties in Georgia. The best way we have found to handle this is to have the seller get permissions from the neighbors BEFORE you buy the place. If you wait until you own it, you may run into issues like you mentioned as the “foreigner who has money.” In most cases, there are no permissions needed, such as the common situations where expats buy properties and renovate the insides.

  • on April 12, 2021

    I am very much pleased with the contents you have mentioned. I wanted to thank you for this great article.

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