Renting Out Property in Georgia as a Foreigner: Tax and Setup
Owning an apartment in Georgia and letting it out is one of the simplest ways for a foreigner to earn income here, and the tax rate can be as low as 5%. The catch is that the low rate is not automatic, it depends on what you rent, to whom and how you are registered, and a mistake made in the first month tends to be repeated every month after.
Is Rental Income Taxed in Georgia if You Live Abroad?
Yes. Georgia taxes income that arises in Georgia, and rent from a Georgian property is Georgian-source income. Where the owner lives, and whether they have a residence permit or are a tax resident, does not remove the obligation. Practitioner guides also say the 5% residential rate applies to non-residents in the same way as residents.
What changes for an owner abroad is the practical side: who reports the rent, how the tax is paid, and whether anyone in Georgia is watching the deadlines. That is where most foreign landlords get into trouble, not on the rate itself.
The Two Rates: 5% and 20%
| Type of letting | Rate | How it works |
|---|---|---|
| Residential property let for living purposes, registered with the Revenue Service | 5% | Charged on gross rent. No costs can be deducted, so repairs, furniture and agent fees do not reduce the tax |
| Residential property let without registering for the 5% treatment | 20% | The standard personal income tax rate applies, and sources differ on whether costs can then be deducted |
| Commercial property such as an office, shop or warehouse | 20% | Calculated on rent less the costs the Tax Code allows and you can document |
Most guides agree that the 5% rate is something you register for, not something you receive by default. A landlord who simply starts collecting rent, with no registration, risks being taxed at 20% and cannot count on claiming the lower rate retroactively.
When 5% of Gross Is Not the Cheaper Option
Because no costs are deductible at 5%, the lower rate stops being a bargain when the property is expensive to run. As a rough guide, if your documented costs would come to more than about three quarters of the rent, 20% of the net can end up lower than 5% of the gross. For a normal apartment that is rare, but it can happen with heavy renovation, a large mortgage interest bill or a property that sits partly empty. It is worth running the numbers once, before choosing.
Why Rent Does Not Fall Under the 1% Rate
A lot of foreigners who have registered as an Individual Entrepreneur with Small Business Status assume that everything they earn in Georgia is taxed at 1%. Rent is not covered. The 1% rate is for turnover from your registered business activity, and rental income is treated as property income under the Tax Code, even if the tenant pays into the account of your IE.
Reporting rent through an IE at 1% is the most common way this goes wrong. If the Revenue Service reclassifies it, the rent can be reassessed at 20%, with interest and penalties added for every period it was reported at the wrong rate.
If you hold the property personally and run a separate business through an IE, keep the two apart: rent is declared as rent, and business turnover is declared as business turnover.
The same boundary applies if you are comparing structures. Our articles on the 1% tax for freelancers and on LLC versus IE explain what the 1% rate does and does not cover.
Who Declares and Pays the Tax
| Situation | Who deals with the tax | What to watch |
|---|---|---|
| Tenant is a private individual | The landlord declares the rent and pays the tax | An annual declaration is generally due by 1 April of the following year |
| Tenant is a company or entrepreneur | The tenant may be required to withhold tax and report it monthly | Withholding follows its own monthly timetable and should not be left for the annual return |
| Property has several owners | Each co-owner is generally taxed on their own share | Payments from the tenant should match the ownership shares in the registry |
Declarations are filed through the landlord's account on the Revenue Service portal, or by a representative holding a notarised power of attorney. Tax payments are made through the Georgian banking system, which is one more reason a landlord who lives abroad needs someone reliable on the ground.
Airbnb and Short-Term Rentals Work Differently
Listing an apartment on Airbnb or Booking.com does not automatically qualify it for the 5% residential rate. Tax rules treat short-stay accommodation as a separate category, closer to hospitality than to a normal lease. Guides describe a fixed-rate regime for small short-stay hosts that required registration, no voluntary VAT status and turnover within 100,000 GEL over any 12 months, but they disagree on when it ends. Depending on the source, it either ended on 1 January 2026 or runs until 1 January 2028.
Because the short-stay treatment has changed and sources conflict on the current position, confirm which regime applies to your property before the first booking. Choosing a platform first and the tax category later is how hosts end up on the 20% rate by default.
Do not assume either that Georgia charges a general local tourism tax on every booking. Check what applies to your municipality and property type.
Annual Property Tax and VAT on Top of Rent
Rent is not the only tax a landlord meets. Georgia charges an annual property tax on non-land property, and it is income based: households under a set income level are exempt, and the rate rises with income. Rental income counts toward that household income, so letting a flat out can move an owner who was exempt into a taxable bracket. The exact thresholds and dates have been under discussion, so check them with the Revenue Service for the year in question. We cover the basics in our guide to buying property as a foreigner.
VAT is the other one. If your taxable turnover passes 100,000 GEL over any 12 consecutive months, you must register as a VAT payer, and residential rent at 5% is not automatically exempt from that test. This is a rolling test, not a calendar-year one, so it needs watching if you let several units or combine rent with other income. Our article on the VAT threshold explains how the rolling 100,000 GEL rule works.
Setting Up the Letting Properly
Confirm what you can let
Check the registry extract for the property: who the registered owners are, and whether there is a mortgage, lien or dispute. A tenant does not give you rights you do not have, and a lien on the title still follows the property.
Decide the tax route before the first rent
Settle residential or commercial, personal ownership or a business structure, and whether you will register for the 5% treatment. Doing this after months of rent has already been collected is harder to fix.
Put everything in a written lease
Term and renewal, rent and payment dates, deposit and how it is returned, who pays utilities and building charges, who handles repairs, and termination terms. Verbal arrangements are the first thing to fail when there is a disagreement.
Document the handover
A signed handover act with an inventory and meter readings, plus photographs, makes it far easier to deal with damage claims at the end of the tenancy.
Plan how rent reaches you
Know which account receives the rent, who files the declaration, and who watches the 1 April deadline and any monthly withholding if the tenant is a business.
Keep records
Leases, payment records and any invoices should be kept in order even where costs are not deductible, because they are what you point to if the Revenue Service asks questions.
Legal Vista is a Georgian corporate law firm that has served expatriates since 2017. For foreign property owners we can review the title before a property is let, prepare and review the lease agreement, register the letting with the Revenue Service for the correct tax treatment, and handle the declarations and accounting afterwards, including for owners who live abroad.
If you own a property in Georgia, or are about to buy one to rent out, reach out to us: info@legal-vista.com, or WhatsApp +995 599 848 487.
Frequently Asked Questions
Can a foreigner rent out property in Georgia?
Yes. A foreign owner can let residential or commercial property on the same basis as a Georgian owner. What matters is registering the letting correctly and declaring the income.
Do I pay Georgian tax on rent if I do not live in Georgia?
Yes. Rent from a property in Georgia is Georgian-source income, and non-resident owners are taxed on it as well.
Can I use the 1% Small Business Status rate for rent?
No. Rent is treated as property income, not business turnover under Small Business Status, and reporting it at 1% risks reassessment at 20% with interest and penalties.
Do I have to register to pay 5%?
Most guides say yes. The 5% treatment is generally something you register for, and rent collected without registering can be taxed at 20%. Confirm the current procedure on the Revenue Service portal when you register.
Can I deduct repairs and costs from rent?
Not at 5%, where the tax is charged on gross rent. Costs may be deducted only under the 20% net-income treatment, and they need to be allowed by the Tax Code and documented.
Is Airbnb income taxed the same as a normal lease?
No. Short-stay accommodation is treated as a separate category, and the available fixed-rate treatment has changed over time. Confirm what applies before you list.
Who files the declaration if I am abroad?
You can file through your own account on the Revenue Service portal, or appoint a representative with a notarised power of attorney. If the tenant is a company, it may also have withholding duties.
