Georgia’s Amendment on Foreign Land Ownership and How It Impacts Foreign Real Estate Investment

For foreign investors interested in acquiring real estate in Georgia, understanding local laws is crucial to avoiding costly pitfalls. One of the most significant pieces of legislation impacting foreign real estate investment in the state is O.C.G.A. § 2-1-7. This law imposes restrictions on foreign nationals and entities acquiring certain types of land, particularly agricultural land and property near military bases.

Whether you’re a real estate investor, a foreign corporation, or an individual looking to invest in Georgia, it’s important to be aware of the provisions under this law to ensure compliance and protect your investment. In this post, we’ll explain the key aspects of O.C.G.A. § 2-1-7, how it affects foreign investors, and provide practical advice on how to navigate these restrictions.

Key Provisions of O.C.G.A. § 2-1-7

The Georgia law O.C.G.A. § 2-1-7 places specific restrictions on nonresident aliens and certain foreign entities seeking to acquire land in the state. The key points include:

Restricted Land Types: Nonresident aliens are prohibited from acquiring an interest in:

• Agricultural land: Land that can be used for farming, timber production, and similar activities.
• Land within a ten-mile radius of a military base: This includes military installations and military airports within the state.

Who Is a Nonresident Alien?: A nonresident alien is defined as:

• An individual who is not a U.S. citizen or legal resident and has been physically absent from the U.S. or Georgia for extended periods.
• A corporation or business entity domiciled in a foreign country designated as a foreign adversary by the U.S. Secretary of Commerce (this currently includes countries such as China, Russia, Iran, North Korea, and Venezuela).

Exemptions and Special Situations

Under certain circumstances, a nonresident alien may acquire a possessory interest in the restricted lands, but the law requires that these interests be disposed of within a set time:

• Security for Indebtedness: A nonresident alien can acquire agricultural or restricted land if it is part of a debt enforcement process (e.g., foreclosure or lien enforcement), but the land must be sold within two years.
• Inheritance: If a nonresident alien acquires the land through inheritance or a will, they have one year to dispose of the property.
• Termination of Nonresident Alien Status: If the individual or entity’s nonresident alien status changes, the restriction on ownership may be lifted.

It’s important to note that these restrictions do not apply to residential property, meaning foreign investors can purchase houses, residential buildings, or land intended for residential use without facing these limitations.

How Does This Affect Foreign Real Estate Investors?

For foreign real estate investors, particularly those looking to invest in agricultural land or properties near military installations, O.C.G.A. § 2-1-7 presents a significant barrier. Failing to comply with the law can lead to voided transactions, resulting in the loss of the property and the investment.

1. Agricultural Land Investment: If you’re interested in purchasing agricultural land for farming, timber production, or other commercial purposes, this law will require careful planning. Nonresident aliens are restricted from holding these types of property unless acquired under specific exemptions, and even then, the ownership must be temporary.
2. Land Near Military Bases: Investors looking to acquire land near military installations must be aware of the 10-mile restriction radius. This is particularly relevant for those interested in property development or large-scale land acquisitions near Georgia’s many military sites.

Planning Your Real Estate Investment Strategy

Foreign investors can still invest in Georgia real estate, but it’s crucial to plan your purchases carefully to avoid running afoul of O.C.G.A. § 2-1-7. Here are some practical steps you can take:

1. Know Your Land Type: Before making any purchase, verify whether the land is considered agricultural or falls within the restricted zone near a military base. Work with a real estate attorney to assess the zoning status of the land and ensure it complies with local laws.
2. Understand Your Status: If you or your business is considered a nonresident alien under Georgia law, be sure to understand the limitations on acquiring land. Pay special attention to the countries currently designated as foreign adversaries by the U.S. Secretary of Commerce, as this will impact your ability to own land in Georgia.
3. Explore Exemptions: If you find yourself acquiring restricted land due to foreclosure or inheritance, understand the deadlines for selling the property and plan accordingly. This can help you avoid losing the investment.
4. Focus on Residential Properties: Since O.C.G.A. § 2-1-7 does not apply to residential properties, foreign investors can confidently explore opportunities in Georgia’s residential real estate market, including single-family homes, condos, and apartment buildings. This may be a better route for long-term investments without the risk of restricted land ownership.

Conclusion

While O.C.G.A. § 2-1-7 restricts foreign ownership of certain types of land in Georgia, it doesn’t mean foreign investors are barred from real estate investment altogether. By focusing on residential properties, understanding the type of land you’re purchasing, and working with a real estate attorney, you can navigate these restrictions and make informed investment decisions.

At Edwards Law, we specialize in helping foreign investors navigate Georgia’s real estate laws. Contact us today to schedule a consultation and let us help you make the most of your real estate investments in Georgia.