LumenDo I pay tax in Georgia when I sell my apartment or car?
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Under the Tax Code of Georgia, the gain from selling a residential apartment (house) with its land is tax-free if you owned it for more than two years. The gain on a vehicle is tax-free after more than six months of registered ownership. Otherwise, the gain on these is taxed at 5%: sale price minus purchase price.
Key facts
| What | The law says | Source |
|---|---|---|
| Apartment or house with its land | Gain is exempt if owned for more than two years | Tax Code, art. 82(1)(f.a) |
| Vehicle | Gain is exempt if owned for more than six months after registration of title | Tax Code, art. 82(1)(f.b) |
| Other assets | Gain is exempt if owned for more than two years, unless you used them for economic activity before the sale | Tax Code, art. 82(1)(f.c) |
| Rate if not exempt (apartment or vehicle) | 5% of the gain | Tax Code, art. 81(3) |
| How the gain is worked out | Sale price minus purchase price when you got title; for a gift, sale price minus market price when received | Tax Code, art. 82(4)(b) |
| When ownership starts | The date the certificate of title is prepared for registration; if not registered, when title was created | Tax Code, art. 82(4)(a) |
| Inherited or gifted from a first-line relative | Their ownership period is added to yours | Tax Code, art. 82(4)(a¹) |
| Sale date | The date of the document on which the transfer is registered (or the transfer of ownership, if not registered) | Tax Code, art. 82(4)(a²) |
When the gain is tax-free
The Tax Code exempts a natural person’s gain from selling:
- a residential apartment (house) together with its land, owned for more than two years (art. 82(1)(f.a));
- a vehicle, owned for more than six months after registration of title (art. 82(1)(f.b));
- other assets owned for more than two years, unless you used them for economic activity before the sale (art. 82(1)(f.c)). Just holding shares or securities to receive dividends or interest isn’t economic activity for this rule.
When it is taxed
A gain from supplying a residential apartment (house) with its land, or a vehicle, is taxed at 5% (art. 81(3)). The gain is the difference between the sale price and the purchase price when you acquired title. If you received the asset free of charge, it is the sale price minus the market price at the moment you received it (art. 82(4)(b)).
Counting the ownership period
The two-year term starts on the date the certificate of title is prepared for registration with the registration authority, or, if the title isn’t registered, when the title was created. The sale counts from the date of the document on which the transfer is registered (art. 82(4)(a) and (a²)). If you inherited or received the asset as a gift from a first-line heir relation (spouse, child, parent and others listed in art. 82(4)(c.a)), their ownership period counts towards your two years (art. 82(4)(a¹)).
Related questions
- Non-residents: a non-resident pays income tax on Georgian-source gains from the sale of property, reduced by related deductions (Tax Code, art. 80(4)–(5)).
Sources
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