The Ministry of Finance has postponed the property tax reform, meaning it will not be implemented this year, despite plans to initiate legislative amendments in Parliament last spring. According to the Ministry, any adjustments to the tax or changes to the 40,000 GEL threshold require careful analysis due to their impact on municipal budgets.
Giorgi Kakauridze, First Deputy Minister of Finance, explained that unlike other taxes, property tax revenues go entirely to local governments, while income, excise, and profit taxes are directed to the central budget. “Any modification of property tax directly affects each municipality’s revenue, so thorough preparation is necessary,” he said.
Kakauridze emphasized that the main criterion for property tax should be the area of real estate, not income, and certain benefits should be applied depending on property size. “If someone’s income is low due to social conditions, they should receive a benefit. A monetary threshold alone is not sufficient. For example, having 40,000 GEL in income while living in a 500-square-meter house does not reflect the proper logic for taxation,” he noted.
He added that a comprehensive reform, similar to the model used in Estonia, could transfer the tax burden entirely to land value rather than property assessments. “This requires long-term work and will be considered in the coming years,” Kakauridze said. In 2024, local governments collected 82 million GEL from property taxes on individuals.
