The FINANCIAL — 1. Avoid selling your land at public auction
If you currently own land in Georgia, you may one day find that you no longer actually own it.
It could turn out that you have tax indebtedness and your plot of land has been kept under tax mortgage for the past several years (https://naprlmr.reestri.gov.ge/#st_intro).
Based on tax indebtedness, the Revenue Service of Georgia (http://rs.ge/Default.aspx) could impose a lien on your property and transmit the case to the newly established Tax Officers of the National Enforcement Bureau of the Ministry of Justice of Georgia:
http://nbe.gov.ge/index.php?sec_id=1&lang_id=ENG
If the Tax Officer can find you, that is fine. You will be given a notice and you will be able to settle the issue. However if you permanently live outside of Georgia, the tax officer will not be able to find you and your land plot may be sold at public auction upon the consent of the local court
(https://www.eauction.ge/Lots/LotsList.aspx?st=2&PID=2b764162-b4ac-47f4-a31b-719030a6ac34).
The sales procedures can take one month or so and one day you may find that a land plot for which you paid a considerable amount of money several years ago, does not belong to you anymore.
In order to avoid such a complicated scenario, you are strongly recommended to perform the following steps:
1) Register yourself as a taxpayer on the website of the Revenue Service of Georgia;
2) Make sure that you always receive correspondence that is delivered to your registered address in Georgia;
3) Make sure that you have a duly authorized proxy in Georgia who can represent you vis-à- vis taxation and enforcement authorities;
4) Check from time to time whether you or your Georgian company are subject to tax mortgages/hypothecations or tax liens;
5) Check from time to time whether you or your Georgian company are indebted to the State Budget of Georgia.
If you find out, however, that your land plot is under tax mortgage/hypothecation, it means that you have an indebtedness that should either be paid or you may wish to start a tax dispute resolution proceeding at the Revenue Service of Georgia.
2. Avoid evaporation of your land
If you own land in Georgia, you may find out one day that you do not own it wholly. For example, four years ago you purchased 15,000 sq. meters of land, and today you find out that you actually own only 10,000 sq. meters of land.
It could be that your neighbour was clever or lucky enough that he submitted to the Public Registry a request to register the exact location of his/her land plot on the digital map of Georgia:
http://gisapps.reestri.gov.ge/geocadastre/
If the land plot of your neighbour is violating the borders of your land, but your land plot is not registered on the digital map of Georgia, there is 100% probability that your land plot will become that much smaller. It depends on how lucky you are. Nothing can help you with this if it happens to you.
In order to avoid such a complicated scenario, you are strongly recommended to perform the following steps:
1. To retain Georgian legal counsel and that of a land measuring company;
2. To arrange getting a cadastre measurement drawing showing the exact location of your land plot;
3. To register your land plot on the digital map of Georgia:
http://gisapps.reestri.gov.ge/geocadastre/;
4. To check from time to time that the borders of your land plot have not been violated.
3. Pay the newly introduced land tax on time
The new Tax Code of Georgia that became effective on January 1, 2011, introduced a tax for the owners of almost of all types of land. Under the previous Tax Code, the natural (physical) persons that owned a land plot in Georgia but did not have an income in Georgia were generally not subject to property tax.
This is not the case any longer. If you are a foreigner, live outside of Georgia and do not have income in Georgia at all, you may still find that you have automatically become a payer of property tax resulting from your ownership of a land plot located in Georgia.
In order to avoid any possible complications, it would be helpful if you talk to your Georgian auditor and/or legal counsel. This will help you to avoid tax complications due to the non-submission of tax declarations, non-payment of taxes etc. In its turn, full tax compliance will protect you from the risks described above.
Zurab Vanishvili
Managing Partner
Zurab Vanishvili Law Firm
Mobile: +995577 (LAWYER) 529937
5@777.ge
Discussion about this post