The long-anticipated property tax reform in Georgia has been postponed, with the Ministry of Finance confirming that it will not be implemented this year. Initially, the government had planned to submit the legislative amendments to Parliament in the spring of 2024.
According to First Deputy Finance Minister Giorgi Kakauridze, the reform was delayed after analysis showed that it would create significant imbalances in municipal revenues.
“A number of municipalities would see a sharp increase in income, while many others would face a significant decrease,” Kakauridze told BMG. “This creates certain problems, and therefore, we are not in a hurry to implement the reform.”
He emphasized that although the reform may be economically justified, the uneven fiscal impact makes it difficult to roll out quickly.
The planned reform will affect both individuals and companies. Instead of being based on the revenues of legal entities or individuals, property tax would focus more on the value of land.
Currently, enterprises make up around 80% of property tax revenue. Under the new model, taxation would be linked to land value, with a uniform regime for businesses and individuals.
Certain benefits could still be applied for households, for example based on home size.
Kakauridze noted that if the reform is launched, it would likely need to be rolled out in stages so municipalities can gradually adapt. However, this approach also creates complications:
“A gradual transition has another negative side. Municipalities that begin the reform earlier may transition faster, while others may be very late,” he explained.
For now, the Ministry maintains that the reform is too complex to implement immediately and will require further adjustments before moving forward.
