Abstract:

This study examines the need for reforming the property tax system in Georgia. It demonstrates that the current threshold of 40,000 GEL and the taxation model based on total household income no longer reflect the real economic situation of the population and conflict with the principles of legal certainty, equality, and proportionality.

The analysis highlights the impact of economic changes since 2010, including the depreciation of the national currency, inflation, and nominal increases in the subsistence minimum and average salaries, which have shifted middle-income households into the category of property taxpayers. It also identifies legal ambiguities caused by household-based taxation.

The paper proposes two key reforms:

Raising the income threshold for exemption from property tax from 40,000 GEL to 65,000 GEL.

Transitioning from household-based to individual-based taxation.

Furthermore, it argues for removing the temporal limitation on exemptions for agricultural land plots up to 5 hectares, to comply with constitutional principles of equality and property rights. Comparative analysis shows that in developed legal systems, property tax is based on individual responsibility and market value rather than household income.

The proposed reforms aim to enhance tax fairness, reduce discriminatory burdens, and increase public trust, while balancing short-term impacts on local budgets with long-term socio-economic benefits.

Keywords:

Property tax, Individual taxation, Household income, Legal certainty, Tax fairness

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