Add listing Log in

How to buy an apartment in Georgia? Stages of purchase

22.04.2022
7523
Interest in real estate in Georgia among residents of the post-Soviet space continues to grow rapidly, apartment rentals in Tbilisi and Batumi have already risen significantly due to the influx of Russians who have decided on a temporary or permanent change of residence; at the same time, experts observe an increased demand not only for renting, but also for buying housing, and in this article we will tell, what features should be taken into account when choosing an apartment, house or apartment in Georgia.

Why Georgia?

The choice of this beautiful southern country by Russians is not accidental: favorable climate, magnificent landscape, sea and mountains, but at the same time relatively low cost of living, low taxes for business, easy procedures for interaction with government agencies and, of course, the hospitality of locals, most of whom speak Russian or English. Against the background of the armed conflict with Ukraine, there is a negative attitude towards Russians, however, most Georgians treat Russians kindly.

Russian citizens do not need a visa to stay in Georgia for 365 days. Next, you need to leave the country, and upon re-entry, the period will be reset to zero. There is still no direct air service between Russia and Georgia (since July 2019). You can fly from a docking station, for example, in Minsk, Yerevan or Istanbul. 

Buy an apartment in Georgia

In Georgia, a certificate of vaccination with the V-Satellite is valid (except for a single-component vaccine), which is a significant plus for many Russians. Confirmation of vaccination (or PCR test) is required when crossing the border. Within the country, covid restrictions are gradually being lifted. For April 2022, everything except wearing masks indoors has been canceled. 

It is also necessary to note the attractive value of real estate in Georgia. A studio of 30-35 sq. m in a new modern residential complex in Batumi on the first or second coastline can be purchased for $35 000-50000. For comparison, the minimum budget for the purchase of similar housing in the Greater Sochi area is from 8-9 million rubles. According to experts of the Georgian market, the lots of the economy segment have already scattered like pies. Prices have not yet responded to the growing demand, although the prerequisites for an increase in the cost of square meters are obvious.

1st stage – real estate selection. Apartment, house or apartment?

The most popular positions for purchase in Georgia are apartments or apartments in a new building or on the secondary market. For their own living, they are looking for apartments in high-rise buildings with gas heating. Apartments (usually without gas) are purchased for seasonal recreation or rental. For apartment maintenance&it is necessary to pay the management company (approximately $0.5-1.1 per sq. m.).In the season, from June to September, the cost of renting a studio of a minimum area (30-35 sq. m. m) in a new complex on the first or second coastline is approximately $100-120 per day. It should be borne in mind that when receiving income from renting out real estate, owners are required to pay income tax in the amount of 5%.

When looking for an apartment or apartments in a house that has not yet been commissioned, pay attention to the choice of the developer. It is advisable to listen to the advice of an experienced realtor who knows the local market well. Cases of long-term construction or double sales are extremely rare here. Nevertheless, new buildings are quite often handed over with a delay of up to 5-6 months. There are cases when some of the apartments in the house that has not yet been rented are occupied until the work is fully completed.

If you are considering buying an apartment on the secondary market, it is necessary to carry out a standard procedure for checking for legal purity, that is, to make sure that the property is not pledged, not under arrest, there are no persons who can potentially challenge the transaction. Usually, this function is taken over by a realtor (or you need to involve a lawyer). In Georgia, there is a practice according to which the services of the agent are paid in full by the seller.The exception is situations when the buyer wants to consider an expanded number of lots, or it is a question of acquiring an expensive object.

When buying a house in Georgia, it should be borne in mind that foreigners are prohibited from acquiring agricultural land. Perhaps this is the only restriction that applies to non-residents. However, this issue can also be solved in some cases by changing the type of permitted land use. Such a procedure, if it is fundamentally possible, will take additional time, about 2-3 months.

2nd stage – discussion with the seller of the terms of the transaction. Installments and mortgages

An important point that needs to be agreed with the seller of real estate is the order of payments. When buying a house in a new building, most often an advance payment of 30% of the total amount is made first, and the rest is paid in stages. Many developers offer interest-free installments until the end of construction, and often further, for a year or even more. Such conditions can be called more than attractive.  

But it has become more difficult for Russians to take out a mortgage to buy an apartment in Georgia today.After the outbreak of the armed conflict between Russia and Ukraine and the subsequent sanctions, most Georgian banks suspended the opening of accounts and the issuance of housing loans to citizens of the Russian Federation. However, according to the information at the end of March - the beginning of April 2022, it is still possible to open an account for holders of a Russian passport in some banks in Georgia. Mortgages are also issued, but the terms of consideration have increased, including due to the large number of applications. Those who purchase an apartment in a ready-made house are more likely to get a loan. The rate is 7% per annum in dollars.

3rd stage – conclusion of the transaction

Suppose the apartment is selected, all the conditions are negotiated, and the parties are ready for a deal. If we are talking about a new building, a preliminary purchase and sale agreement is first concluded between the buyer and the developer, according to which the former receives a preliminary ownership right. After completion of construction and delivery of the house, the parties sign the main contract.

In both cases, the buyer participates in the transaction, the seller is a representative of the developer, and according to the law, an interpreter must be present and sign the contract. This may be a relative or acquaintance who speaks Georgian and is a citizen of the host country. However, it is more reliable to invite a translator from a translation agency – the service will cost only $ 10. The contract is drawn up in Georgian in lari at the exchange rate of the national bank at the time of its signing (on websites and in advertisements, all real estate prices are in dollars).

To conclude the transaction, the buyer (or his proxy), the seller and the translator come to the House of Justice, where, in the presence of a specialist of this institution, the justice officer signs the contract. The procedure takes about 15 minutes. The buyer must have with him a single document – passport. In the case of a remote transaction, you will also need a notarized power of attorney for someone who will represent the interests of the real estate buyer. The practice of choosing an apartment online and making a deal without personal presence became popular during the pandemic.

Note that no taxes are provided for the purchase of real estate by non-residents. It is only necessary to pay the fee for registration of ownership. It is 50 lari (about 1500 rubles) for registration in standard terms (3 days) or about 200 lari (about 6000 rubles) in case of urgent registration (on the same day).

Thus, the procedure for buying an apartment is simplified as much as possible – the buyer only needs a passport, the amount specified in the contract and payment of a small fee.

When buying an apartment on the secondary market, the algorithm of actions is similar, with the difference that a preliminary contract is not needed.

4th stage – settlements between buyer and seller

Until recently, several Russian banks (Sovcombank, Tinkoff Bank, Alfa-Bank and some others) could make payments from the account of individuals to legal entities – developers – in Georgia. However, today this path is impossible or difficult due to sanctions. Alternative options are either unusual, inconvenient, or unsafe. Nevertheless, buyers are forced to resort to them. Settlement via cryptocurrency is becoming widespread; in Russia, for example, you can purchase USDT and cancel it in dollars with a commission in Tbilisi. Some developers already accept payments in cryptocurrency (with a commission of 2-4% for each transaction) or rubles, but at a discounted rate. Some part of the amount (and in the case of a small apartment, a significant one) can be brought in cash. The limit is $10,000 per person.

5th stage – obtaining ownership

Information about the occurrence of ownership rights, including preliminary ones, is displayed in the electronic register. To make sure that the apartment has become the property of the buyer, you can register on the website. No paper supporting documents are provided.

Homeowners in Georgia, both citizens of the country and foreigners, pay an annual real estate tax in the amount of 0.05% to 1% of the cost of an apartment or house. The rate depends on the location of the object and the family income.    

To summarize, real estate in Georgia is not overpriced yet and certainly has investment potential. The costs of buying a home, in addition to the principal amount, are minimal. The procedure for making a transaction is quite simple. All this speaks in favor of choosing the country of the homeland of fine dishes and wines, both for moving and for investing in square meters. In the first case, you should pay attention to the fact that in order to obtain a residence permit, the cost of the purchased property must be above $100,000.

The negative factors affecting the final decision on the purchase of real estate include difficulties in settling with the seller. There are also risks associated with the unstable geopolitical situation in the world and the economic situation in Russia. The main one is the restriction or complication of movement between our countries, the introduction of a visa regime. In addition, new waves of the pandemic may hit the tourism business again, and, accordingly, the profitability of renting apartments. The latter should be taken into account by potential investors.

Thank you for your help in preparing the material of market experts in Georgia:

Arkady Mineva, company JoinGeorgia

Artur Loginov, companyAtlas

Dina Pozharskaya, company DB Nome Group

 

Author: Elizaveta Barskikh

12
All articles by this country
All articles
Property in Georgia
Discussion
gershelev
a good article, described everything in detail and in step with the times. thank you! one problem, of course, with the calculations ... about $ 10,000 per person - now, in my opinion, the limit has been increased to $ 50,000, although it would be better to $ 100,000, since this would be optimal for buying real estate with an eco and comfort real estate classes.
19 of Jun 2022, 02:26:05
Reply