The ruling Georgian Dream party plans to raise the annual income threshold for individual property tax 40,000 (USD 15,386) to GEL 100,000 (USD 38,466) per household, in what follows longtime concerns that the threshold was outdated and added to the financial burdens of low-income families.
The change is expected to take effect in October and apply to property tax declarations due this year, relieving about 81,000 people from tax obligations.
GD Parliamentary Majority Leader Irakli Kirtskhalia announced the decision during a September 14 press briefing, saying the legislative changes had been prepared in coordination with the Finance Ministry and would be considered by the disputed Parliament under an expedited procedure.
Under the current rule introduced more than two decades ago, in 2005, a natural person’s taxable property, excluding land, is calculated based on the annual household income and is exempt from property tax if the earnings do not exceed GEL 40,000.
Households earning more than GEL 40,000 but less than GEL 100,000 are subject to an annual property tax of between 0.05% and 0.2% of their taxable property, while those earning more than GEL 100,000 can be taxed at a rate of between 0.8% and 1% of the value of their taxable property.
For property tax purposes, the calculated income includes accrued salary, taxable income from economic activity, and other income or benefits specified by the Tax Code.
Georgian authorities count as part of a family whose income is calculated “an individual, their spouse, underage child and stepchild, as well as, where they permanently reside with and share a household with the individual, their parent, child and stepchild, sister, brother, grandmother, grandfather, and grandchild.”
The decision follows calls to revise the GEL 40,000 threshold, with critics arguing that inflation and rising incomes had made the decades-old threshold increasingly outdated. They said the threshold, originally intended to exempt lower-income families from property tax, “can no longer fulfill its function.”
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