Residential rent is taxed at 5% — and a commercial lease at 20%

Rent from property let for residential use is taxed at 5% of gross rental income. A commercial lease falls under the standard 20% income tax rate instead. The trigger is not the building, the district or the tenant's nationality but what the space is used for, which means a landlord who lets a ground-floor flat to a cafe and the identical flat above it to a family is running two different tax positions in one stairwell. Before signing with a business tenant, price the rent with the 20% rate in it, not the 5%.

The guide states that the flat 5% applies both to long-term tenants and to short-term lettings of the Airbnb type. That is worth noting because the two businesses look nothing alike from the outside: a nightly let involves cleaning, platform commission, linen and a reception function, and is closer to hospitality than to tenancy. The page does not say whether those costs can be deducted — it describes the 5% as applying to gross rental income, and never addresses expense deduction at all. Treat that silence as a question to ask, not an answer.

Owning the property for more than two years can bring a full exemption from capital gains tax on the sale. Sell before that point and a reduced 5% rate applies instead of the standard 20%. Note an inconsistency on the source page worth being careful about: its main text limits the pre-two-year 5% rate to residential immovable property, while its FAQ drops the word residential. If you are selling land, a commercial unit or a parking space rather than a flat, that distinction is the one to check before you sign, because the difference between 5% and 20% on a gain is not a rounding error.

These are the rates as described by a Georgian advisory firm's tax director, on a page updated in late October 2026, without statutory citations. They match what is widely understood to apply, but a rate you read on a blog is not the rate the Revenue Service assesses you at. Three things are worth doing before the next tax year: write the intended use into the lease, keep the rental income separate from any other business income in your records, and get a one-page written confirmation of your position from an accountant. If you are a non-resident owner, also ask how your home country treats the Georgian tax paid, because a 5% bill here may not be the end of the matter there.