Georgia remains one of the most attractive destinations for investment migration. However, in 2024, important changes were made to the rules for obtaining a residence permit through real estate. These adjustments require special attention from potential investors who plan to relocate to or stay in the country long term.
The minimum investment required for a residence permit remains $300,000, but significant clarifications have been made regarding the types of real estate that qualify. It’s important to note that only residential and commercial properties are considered eligible, while land plots, even with buildings, are not included in the calculation of the required amount. This closes a previously popular loophole in which investors would buy several small plots with houses in an attempt to reach the required threshold.
The clearance process begins with a thorough review of the real estate documents. The key requirement is that the transaction be free of encumbrances or pledges. Special attention should be paid to the cadastral value, which must now be at least 90% of the declared purchase price. This rule was introduced to prevent the widespread practice of overstating the value of properties in contracts.
After completing the transaction, investors must prepare a package of documents, including a notarized sale and purchase agreement, proof of payment, and an extract from the Unified State Register. A new requirement for 2024 is mandatory health insurance of at least €30,000 to cover the stay in Georgia. This point is often overlooked, which leads to processing delays.
The documents are submitted to the Development Agency of Georgia, where a special commission reviews the application within 30 days. If approved, a temporary residence permit is issued for one year, with the possibility of extension. It is important to note that, for the first time, there is a requirement for a minimum ownership period of real estate: three years. If the property is sold before the end of the three-year period, the residence permit is canceled.
Special conditions are provided for family investors. Spouses and minor children can be included in the application without the need for additional investment. However, adult children and parents require separate investments in real estate or alternative investments, such as starting a business.
Tax aspects have also changed. Investors who obtain a residence permit through real estate are exempt from property tax for the first five years but must pay income tax on any income earned in Georgia. It is important to note that tax exemptions do not apply to all types of income, as many people previously believed.
An alternative to buying real estate is investing in construction projects through special investment funds. The new rules allow this option provided the funds are allocated to government-approved infrastructure development projects. However, this route requires more documentation and the involvement of local lawyers, making it more complicated.
Potential investors should also consider geographical restrictions. In 2024, a list of regions where purchasing real estate grants the right to a residence permit was introduced. This list includes Tbilisi, Batumi, Kutaisi, and several other major cities. Purchases in border zones or territories of strategic importance are not considered for residence permit purposes.
Potential investors should consider geographical restrictions. In 2024, a list of regions was introduced where purchasing real estate grants the right to a residence permit. This list includes Tbilisi, Batumi, Kutaisi, and several other major cities. However, the purchase of housing in border zones or territories of strategic importance is not considered when applying for a residence permit.
An important innovation is the requirement to confirm the legal origin of investment funds. Now, a bank statement showing the movement of funds for at least six months prior to the transaction must be provided. This rule aims to prevent money laundering and significantly complicates the process for those who planned to use “gray” schemes. After obtaining a residence permit, investors must reside in Georgia for at least 30 days per year. Authorities will verify this condition more thoroughly through border crossing data and tax reports. Violation of this rule can result in the revocation of the residence permit.
Many people were pleasantly surprised by the simplified procedure for obtaining a residence permit. Now, after five years of continuous residence under a residence permit, an investor can apply for permanent residence without additional investment requirements. This makes the Georgian program one of the most attractive in the region.
While professional consultants note that the new rules have complicated the process, they also make it more transparent and predictable. The main advice for potential investors is to start with a thorough analysis of the real estate market and legal due diligence of the selected property. Mistakes in the initial stages can result in financial losses and denial of a residence permit.
Apart from that, if you are interested to know about “The Ultimate Guide to Donating Vacant Land to Charity” then visit our “Real Estate” category.
