Former Member of Parliament Roman Gotsiridze believes that Georgia’s property tax system needs substantial reform, emphasizing that the current threshold of 40,000 GEL for individuals is outdated and should be revised to reflect present-day economic realities.
The Ministry of Finance has been working on a comprehensive property tax reform for several years. According to the ministry, the goal is to separate the taxation principles for individuals and legal entities and to make property tax independent from income levels. However, Deputy Finance Minister Giorgi Kakauridze has not yet specified when the reform might be implemented.
Speaking to BMG, Gotsiridze criticized the existing threshold as unfair and outdated, noting that the rule, established more than two decades ago, no longer reflects current economic conditions.
“The situation with the property tax for individuals is catastrophic. In fact, every second family, if not more, has to pay this tax, often without realizing it. This limit was introduced in 2003, and more than 20 years have passed since then. When it was set, around 95% of the population was exempt,” Gotsiridze said.
He pointed out that prices and incomes in Georgia have tripled since the early 2000s, meaning many families now exceed the 40,000 GEL income threshold that triggers the tax.
“Threshold of GEL 40,000 refers to total family income, not individual income. For example, if two or three people in a family together earn about 32,000 GEL annually, they are already required to pay property tax,” he explained.
Gotsiridze argues that the principle of property taxation must be urgently revised, suggesting several possible approaches, including raising the threshold, lowering the tax rate, or linking the tax to the market value of land and property.
“The property tax system needs quick reform. There are different ways to approach it, the threshold could be raised, the rate reduced, or the tax tied to property value,” Gotsiridze concluded.
