Rental Income Tax in Georgia: The 5% Rate and Who Registers
Rent from a Georgian flat has its own place among the income tax rates in Georgia: 5% instead of the general 20%. The 5% is conditional, and the condition is not who your tenant is. It is whether the Revenue Service has entered you in its register of landlords at the moment the rent is taxed. This covers the rate, the register, the 31 March return and what letting does to your property tax band.
- Rent from residential space let for residential purposes is taxed at 5%, charged on the rent itself, and only where you take no deductions from it.
- The 5% is open only to landlords entered in the Revenue Service register of persons letting residential space, which you apply for on form VII2-01.
- A legal person renting from you withholds the tax before the rent reaches you: 5% if you were already in the register when the liability on that payment arose, 20% if you were not.
- Rent nobody withheld tax from goes on the annual income tax return by 31 March, and the register entry has to be in place before 1 April of that same year.
- Rent counts in the family income that sets your property tax band, and short-term letting of your own home can opt into a fixed tax of GEL 10 per m2 per room a month, open until 1 January 2028.
The 5% rate on rental income
Income of an individual from letting residential space to an organisation, a legal person or another individual, for residential purposes, is taxed at 5% under Article 81 of the Tax Code. The rate carries a condition inside it: the landlord takes no deductions from that income.
That makes the 5% a charge on the gross rent. Repairs, agency commission, furniture, utility bills and the mortgage on the flat do not come off the rent before the rate is applied.
Residential space here includes a flat or house still under construction, so an off-plan unit let before completion is inside the same rule. Rent invoiced in a foreign currency is counted in lari at the National Bank of Georgia rate for the day the transaction is carried out.
Example: a Tbilisi flat let at GEL 1,800 a month for a full year is GEL 21,600 of rent. At 5% the tax is GEL 1,080, and it stays GEL 1,080 in a year when you also spent GEL 4,000 on a new kitchen.
When rent is taxed at 20% instead
The general personal income tax rate is 20%. Rent falls back to it when the conditions of the 5% are not met, either because the space is not residential space let for residential purposes, or because the landlord is claiming deductions.
The base moves with the rate. On the 20% route the tax works on the rent less the costs of earning it, not on the gross figure the 5% is charged on. Claiming those costs is the thing that takes a landlord off the 5% in the first place.
The landlord register and form VII2-01
The 5% is administered through a register. An individual letting residential space for residential purposes, and taking no deductions from that income, applies to the Revenue Service on the form of Annex VII2-01, under Minister of Finance Order No 996.
The form asks for the tax authority, your surname and first name, personal number, address and contact details. Part I enters or changes your data and Part II takes you out of the register, and the table in Part I can be left blank where you let to an individual, apart from the address of the space.
An application for the register is not a ground for registering that person as a taxpayer. The personal number the form asks for means, for a foreign owner, a Georgian taxpayer number, and applying to the register will not produce one.
- Attachments, company tenant only: a copy of the lease or another document proving the letting is for residential purposes, plus a public registry extract or another document proving your ownership or right of use.
- Timing: the Revenue Service considers the application within 2 working days, enters you in the register, notifies you and issues a document confirming the entry.
- Incomplete documents: you get a reasonable period to complete them, not longer than 15 working days, and the 2-day period stops running while that one does. A deficiency you never cure leaves the application unconsidered.
- Changes and exit: changed data oblige a new, fully completed application, and you leave the register on Part II of the same form or by decision of the tax authority once you stop meeting the condition.
When a company tenant withholds the tax
Where the tenant is a legal person, the tax comes off the rent at source and the rate follows your register status. The 5% is applied only if your data are in the register at the moment the tax liability arises. If they are not, the rate is 20%.
The test is the date you got into the register, not the date you signed the lease. Order No 996 works it through with rent paid on 27 May and an application filed on 29 May: 2 days late, and that payment is taxed at 20%.
Rent paid while you are outside the register does not get the 5%, and your entry counts for the payments that come after it. On GEL 1,800 of monthly rent, that is GEL 360 withheld instead of GEL 90, and the tenant company, not you, is the one applying the rate.
Rent the tenant has already taxed at source does not by itself make you an annual filer. That obligation attaches to income nobody withheld tax from.
Filing the rent yourself, by 31 March
An individual letting to another individual has no tax agent in the chain, so nobody withholds anything and the rent goes on the annual income tax return for the calendar year in which it was received.
The return is due by 31 March of the following year and the tax is paid by the same day, which is how the Revenue Service states the annual filing deadline. The Georgian text of the Code reads "up to 1 April", and 31 March is the last day it gives you.
A second deadline falls on the same day. Where the rent was not taxed at source, the 5% applies only if your data are entered in the register before 1 April of the year following the reporting year, so a landlord who registers in the April after the rent came in has lost the rate on all of it.
Selling the flat later is a separate calculation: tax when you sell a Georgian property is charged on the gain, the sale price less the purchase price, and the gain on a home owned for more than 2 years is exempt.
A year that is part withheld and part not runs both rules at once, and a question with your own figures in it comes back as a written opinion signed by David Sisvadze.
If you own the flat but live abroad
A non-resident pays Georgian income tax on Georgian-source income only. Rent from immovable property located in Georgia is Georgian-source income, so a landlord who has not set foot in the country all year is still inside the Georgian rules on that rent.
There is no separate non-resident rate for it. The withholding clause for lease payments to a natural person sets the rate as the rate fixed by Article 81, which is 5% where the conditions are met and 20% where they are not.
Where the payer is not a tax agent, nothing is withheld at all. The tax is then worked out on the calendar year's Georgian-source income less the deductions related to earning it, and declared on the annual return.
Short-term letting and the fixed tax option
Until 1 January 2028, an individual carrying on activity code 55.2, short-term letting of their own residential place, may be taxed by a fixed income tax on application to the tax authority. Taking it is a choice, not the default treatment.
The option is open where the person is not voluntarily registered for VAT, or where turnover from that activity in any 12 continuous months does not exceed GEL 100,000. The tax is GEL 10 per m2 per calendar month, charged per room, and the Government may adjust it by location or season.
| The fixed tax | The rule |
|---|---|
| Rate | GEL 10 per m2 per calendar month, per room |
| Turnover test | GEL 100,000 over any 12 continuous months |
| Payment dates | 15 April, 15 July, 5 October, 15 January |
| Available until | 1 January 2028 |
During the period you choose, no cash register is required and the letting is not a VAT taxable transaction. The period can be a full calendar year or one or more calendar months, and those months do not have to run together, which fits a flat let to tourists for one season a year.
Example: a single 20 m2 room let for all 12 months is GEL 2,400 of tax for the year, whatever the room took in bookings.
Rent stays outside the 1% regime
Leasing or renting out property is item 1 on the list of income that small business status and its 1% rate do not reach, under Government Resolution No 415. Micro business status excludes it in the same terms.
The exclusion runs in both directions, and the second half is the useful one: the rent is not counted toward the GEL 500,000 limit either. A holder invoicing GEL 480,000 of services and collecting GEL 30,000 of rent has not passed the limit.
The rent is taxed under the general rules and goes on an annual return, separately from the turnover the 1% covers.
What renting out does to your property tax
Letting the flat does not create the property tax. Owning it does. Property tax on Georgian real estate is the only local tax in the Code, introduced by the municipal council within the ceilings the Code sets, and an individual's owned real estate, unfinished construction included, is taxable property.
What the rent changes is the band. The rate is set by the family's income in the year before the current calendar year, and family income counts all income, exempt income included, so the rent sits in that figure beside the salary.
| Family income in the preceding year | The flat is charged |
|---|---|
| GEL 40,000 or less | Exempt, for property other than land |
| Above GEL 40,000, below GEL 100,000 | 0.05% to 0.2% of market value at year end |
| GEL 100,000 or more | 0.8% to 1% of market value at year end |
Example: a family on GEL 85,000 of salary, owning a flat worth GEL 300,000, is in the middle band at GEL 150 to GEL 600 for the year. Add the GEL 21,600 of rent from the earlier example and family income is GEL 106,600, which moves the same flat to GEL 2,400 to GEL 3,000.
The tax is pro rata to the part of the year the property was owned. The return is due by 1 November and the payment by 15 November, and the Revenue Service may assess the tax itself from the previous year's data.
What a late return costs
A return up to 2 months late costs 5% of the tax due under it, and 10% once it is more than 2 months late. Where the tax due under the return is zero, there is no late filing fine at all.
Those percentages are the general fine for filing late rather than a rental rule, so a landlord who is also an entrepreneur carries them on every other return they file.
Late payment runs a separate charge: 0.05% of the unpaid tax for each overdue day, with the day of payment counted as overdue.
Example: on the GEL 1,080 from the 5% example, 1 month late is GEL 54, past 2 months it is GEL 108, and 30 days of unpaid tax adds GEL 16.20 of interest on top of that.
Frequently asked questions
How much tax do you pay on rental income in Georgia?
5% of the rent, where an individual lets residential space for residential purposes, takes no deductions from that income, and is in the Revenue Service register. Outside those conditions the rate is the general 20%, charged on the rent less the costs of earning it.
Do I have to register as a landlord to get the 5% rate?
Yes. Where a company tenant pays the rent, the 5% is applied only if your data are in the register at the moment the tax liability arises. Where nobody withholds the tax, the 5% applies if you are entered before 1 April of the year following the reporting year.
How do I register as a landlord in Georgia?
You apply to the Revenue Service on the form of Annex VII2-01. A company tenant means attaching the lease or another document proving the letting is for residential purposes, plus a public registry extract or another proof of ownership or right of use. The Revenue Service considers the application within 2 working days and issues a document confirming the entry.
Can I deduct repairs, agency fees or utilities from the rent?
Not on the 5%. The rate is written for a landlord who takes no deductions from the rental income, which is why it is charged on the gross rent. Deductions belong to the 20% treatment, where the tax works on the rent less the costs of earning it.
My tenant is a company. Who pays the tax?
The company does, at source, and the rate follows your register status on the day the tax liability arises: 5% if your data are in the register, 20% if they are not. Each payment takes the rate that applied on its own day, so rent paid before your entry went through is withheld at 20%.
Do I still file a return if my tenant already withheld the tax?
Not for that rent. Income taxed at source is not what makes you an annual filer, but rent from the same year that nobody withheld tax from is, and that part goes on the return due by 31 March.
I live abroad and rent out my Tbilisi flat. Do I pay tax in Georgia?
Yes. A non-resident is taxed on Georgian-source income, and rent from property located in Georgia is Georgian-source. The rate is the Article 81 rate, 5% or 20% on the same conditions as for a resident, rather than a separate non-resident rate.
Can I pay 1% on rental income under small business status?
No. Leasing or renting out property is named in the income that sits outside the 1% regime and outside micro business status, and the same exclusion keeps the rent out of the GEL 500,000 limit. The rent is taxed under the general rules on an annual return.
Does renting out my flat change my property tax?
It can. The band is set by family income in the year before the current one, and family income counts all income, so rent can carry a household over GEL 40,000 and out of the exemption, or over GEL 100,000 and into the 0.8% to 1% rate on the same flat.