Last week, this post was going to be a story about a person who had the apartment he owned stolen from him in Tbilisi. However, a new law is now in place in Georgia that prevents that sort of fiction from being posted online.
OBVIOUSLY, in a country as advanced and organized as Georgia, such a thing could NEVER happen.
The people in charge of all government entities in Georgia right now are flawless in every way. They are clearly putting Georgia on the path to world domination through their superior decision making skills, intellect, vision, personal taste and fashion sense.
There is nothing to criticize about anyone in the Georgian government at this point, and there will probably never be a reason to criticize them in the future!
They are the perfect iteration of what a government should strive to be and the rest of the world should take note. Our team is in awe of their prowess and enjoys watching their success from a safe distance. Our local experts who live in Georgia have no opinion on this matter other than the firm belief that war is peace, freedom is slavery and ignorance is strength.
I’m glad that’s out of the way. Now, the fictional stolen apartment story came about because the fictional owner decided it was a good time to sell the fictional apartment in Vake due to the very real long-term outlook of the property market in the country of Georgia. (More on the effects of shrinking populations at the bottom of this post.)
Is Tbilisi a good place to live?
That’s kind of a weird question when you think about it, but we get asked some variation of it on a regular basis.
How do you define good? What is important to you? Where do you live now? What do you like about where you live? What do you not like about where you live?
Most people understand that nowhere is perfect. Wherever you decide to live, there will be trade-offs. The best way to decide if Tbilisi is a good place to live (or anywhere else is a good place to live) is by being clear about your priorities.
First: The Good
Tbilisi is a unique place. Situated along the ancient Silk Road, it has been a part of human history for as far back as the records go. This article/advertisement does a good job of showcasing some of the fun places in Tbilisi.
The rich history in Tbilisi (and the rest of Georgia) is enjoyed by both residents and visitors. It is common to stumble upon an ancient something or other that has some significance as you go about your daily business in Georgia.
As a capital city, Tbilisi has most of the modern amenities you’d expect, such as public transportation, a robust nightlife and access to products and services you can find elsewhere in the civilized world (with one glaring exception: no ranch dressing).
Georgia is known for its rich culture. Long considered “the birthplace of wine,” Georgia has carried that tradition into the modern era. If great wine is your thing, that alone might be enough to help you determine if Tbilisi a good place to live for you.
Even the Georgian language is not like any other language. The alphabet does not look similar to the alphabet of any of its neighbors, and doesn’t sound like anything else in the spoken form.
Food, wine, dancing and polyphonic singing are some of the unique cultural experiences you will enjoy if you decide to move to Tbilisi.
First-time visitors to Georgia are handed a bottle of wine by the customs agents at the airport. The wine doesn’t come from a marketing person on the other side of the booth, it comes from the government employee who stamps passports. When that unexpectedly happened to me, I got the feeling that Tbilisi is a good place to live.
Georgia is more capitalist than many of the places in the world that toot their own horns about being “the best” places to start a business. Our clients regularly open businesses in Georgia. It costs USD $50 and an hour of your time to formally incorporate in Georgia. There’s no need for expensive lawyers or accountants to muck up the process. Easy peasy.
There is limited or no regulation for businesses who want to open and operate in Georgia. Businesses don’t require special licensing, zoning or permission from unelected bureaucrats like you find in most first-world countries.
Do you want to open a bar or restaurant? Go for it. Pick a spot and open this afternoon if you’d like. What’s a liquor license? Never heard of it. Do you want to open an English language school? Congratulations. All you need is a Facebook page to get started. Credentials or not, you can be a teacher here. I could keep going, but you get the idea.
The tax situation in Georgia is also very business friendly. Most freelancers pay 1% income tax and businesses pay 15% on any money they take out of the business. Money the business earns that sits in a bank account is not taxed until it is used for something. It can safely sit in a bank account indefinitely.
Capital gains tax? 5%. Rental income tax? 5%. Salaried income tax? None until you reach a certain threshold (most Georgians never reach that threshold). Cryptocurrency gains tax? 0%.
Oh, they also don’t care about the income you make outside of Georgia, such as rental income or dividend income from your home country. Zero taxes on that.
Fun fact: Cash deposits in Georgian banks are earning about 10% interest right now (early 2023), and it has been that way for years. That’s not a typo.
Cost of living
Historically, one of the most attractive features of Georgian life has been the cost of living. The low cost of basically everything made Tbilisi a good place to live for a long time.
However, some of those costs have shifted in the past year or so.
The cost of everything, everywhere in the world has gone up lately. As it turns out, printing billions in new currency out of thin air while locking everyone in their homes for months on end has consequences. Who would have thought it?
Inflation has affected Georgia just like everywhere else. Here are some examples of the year-over-year change for February 2023 compared to February 2022.
Housing +38.7% (mostly due to migrants from the war, although prices are coming back down now)
Maintenance and repair of housing +7.4%
Water, electricity and gas +12.4%
Outpatient medical services +13.8%
Inpatient medical services +8.0%
Milk, cheese and eggs +17.2%
Meat and meat products +10.2%
Bread and bakery products +21%
Coffee and tea +14.5%
Mineral waters, soft drinks and juices +12.2%
Sugar, jam and other sweets +9.8%
Even though the cost of living is still lower than other places in the world, the huge monetary advantage for living in Tbilisi has been eroded a bit. Many expats and long-term tourists have left Georgia, or are planning to do so when their leases expire. Even with the cost of housing on par with cities in the sexy parts of Europe, Tbilisi is still a good place to live when you look at the big picture.
Georgia has some of the most friendly visa programs in the world.
Visitors from most countries enjoy 365 days in Georgia as tourists. In order to get a fresh 365 days as a tourist, it only requires a day trip to neighboring country like Armenia. When you return, you’ll be set for another year. (Related: There are some excellent lunch spots just over the border in Armenia for those who are considering this approach. When in doubt, go for the pork barbeque).
Getting a proper residence permit in Georgia is also relatively easy. You can invest roughly USD $100k in real estate in Georgia, have a proper work contract from a Georgian company, prove that you earn a (modest) salary from abroad or be a student. There are other paths to residency, but those are the most common.
Second: The Bad
Clearly, this section is blank because there is nothing bad about living in Tbilisi. Duh!
Unlike the stories you may find elsewhere about stolen real estate, dangerous drivers, air quality that’s worse than China and India, traffic that puts Los Angeles rush hour to shame and healthcare that’s little more than first-aid kits, everything in Georgia is perfect today. All of those problems have been resolved and there is nothing bad to say about life in Georgia, or the people who are running the show.
Any reports to the contrary should be discarded and considered disinformation. Only foreign agents would suggest that there is room for improvement in Georgia. Everyone else knows it’s utopia and no criticism should be taken seriously.
Big picture: Shrinking populations create poor real estate investing scenarios (even when neighboring countries at war send injections of refugees from time to time).
Georgia isn’t the only place that is expected to experience a dramatic reduction in population, but it’s on the list of the most severe. Owning property in countries with shrinking populations is a bit like musical chairs. Maybe you’ll get lucky and you’ll be able to find a buyer for your property someday when you need or want to sell, or maybe you’ll be the last one left standing when the music stops.
And if the population declines too fast, you end up with a scenario like Italy. Right now, you can take your pick of houses in Italy for one euro. The best investing strategy in shrinking markets is to buy a property that you’d be happy owning forever (because you may be stuck with it forever) with money that you won’t need for anything else.