The 5% rental tax comes with a condition: you give up deducting anything

If you are an individual and the property is residential and let for residential use, you can be taxed at 5% of gross rent, provided you claim no deductions. If you want to deduct costs, you are in the standard personal income tax regime at 20% on the net figure. That is the whole decision, and most owners make it once and never revisit it. The 5% route also applies to short-term letting of a residential flat, not only to a long tenancy, so hosts are choosing between the same two regimes as landlords.

When your real costs are heavy. Gross means gross: management fees, agency commission, repairs, replacement of furniture, utilities you cover between guests and interest on a loan are all ignored. A furnished short-let run through a management company is the classic case where expenses are large enough that 20% of a much smaller net figure can be the lower bill. Nobody can tell you which side you are on without your own numbers, so take last year's actual outgoings, apply both methods, and keep the working. If your costs are small and your rent is steady, 5% of gross is both cheaper and simpler.

Commercial leases do not get the 5%; they are taxed at the standard 20%. If a Georgian company owns the property, it is in the distributed-profit corporate system, where retained profit is generally untaxed and tax at 15% arises on distribution. That difference in timing is the real attraction of the company route for owners reinvesting rather than drawing income, and it is also why it suits portfolios more than a single flat: you take on accounting, filings and a corporate layer in exchange for deferral. Residential disposals by individuals are taxed at 5% on the gain, and other disposals at 20%.

Property tax on buildings is charged as a percentage of market value and is banded by household income, with municipalities setting the exact rate inside each band. Land is separate: non-agricultural land carries a base rate of 0.24 lari per square metre a year multiplied by a municipal coefficient of up to 1.5, and agricultural land runs on a per-hectare base, from 5 to 100 lari depending on category and location, with a coefficient of up to 150%. Transaction costs are modest by regional standards, with a roundtrip generally in the 3.7 to 6.2% range and the agent fee of 3 to 5% customarily on the seller. For filing, ExpatHub puts the property tax declaration at 1 November and payment at 15 November of the year following the tax year, and it is worth confirming your own dates with the Revenue Service rather than with a forum.