The current system for declaring property tax by individuals is “conditional and incorrect,” Paata Kvizhinadze, chair of Parliament’s Finance and Budget Committee and one of the authors of the proposed amendments to the Tax Code, said. Kvizhinadze made the statement while presenting the bill abolishing the GEL 40,000 property tax threshold for its second reading in Parliament.
Responding to questions from Giorgi Sharashidze of the For Georgia party, Kvizhinadze said lawmakers had considered reducing the property tax rate for households with income of up to GEL 100,000, but the current expedited legislation only abolishes the GEL 40,000 threshold. Kvizhinadze said the Finance Ministry is considering several options for a broader reform, including a zoning-based system.
“We did the minimum that could be done to raise the threshold to GEL 100,000 and relieve people with lower incomes. As for the rest, we will discuss it once the Finance Ministry submits its proposal,” Kvizhinadze said. Kvizhinadze described the current system as problematic, particularly because assessing property values can be highly subjective: an old large building may have little book value, while a newly constructed property could be valued much higher.
Kvizhinadze said the property tax system may ultimately be replaced through a broader reform, which could be introduced gradually. Kvizhinadze added that the Finance Ministry is interested in submitting a comprehensive bill in a timely manner, although it is not yet known when it will be presented to Parliament. Under the proposed changes, the GEL 40,000 exemption threshold would be abolished, while property tax for households earning more than GEL 100,000 would remain at 0.8%-1% of the market value of taxable property.
