Residential rent is taxed at 5% — if you claim nothing back

PwC's summary of the Georgian code puts personal income tax at 5% on rent from residential space, whether the tenant is an individual living there, a company or another organisation — and it attaches one condition: the rate applies only if the individual makes no deductions from that income. Claim expenses and you are outside the 5% regime; the general rate of 20% on net income applies instead, as private advisers here describe it.

Gross means gross. If a flat lets for the equivalent of $9,000 a year and you spend a third of that on interest, agency commission, repairs and furnishing, then 5% of gross and 20% of what is left are not far apart, and in a heavy renovation year the deduction route can win. The calculation is worth doing once with real figures rather than assuming the headline rate is always the right one.

Where the tenant is a business, Georgian practice is that the tenant withholds and declares the tax as your agent; where you let as a private person to another private person, the obligation to declare is yours. Advisers here put the annual income declaration for rental and sale income at 1 April. Confirm the filing route for your own arrangement, because the answer decides whether a missed deadline is your problem or the tenant's.

Letting by the night is not the same as letting by the year. PwC describes a distinct fixed-rate regime for holiday and other short-stay accommodation, open to an individual who applies to the tax office, is not voluntarily registered for VAT and has earned no more than ₾100,000 in any consecutive twelve months. The page does not state the rate, so we are not going to put a number on it here. If you are running a flat on nightly bookings, that application and that ₾100,000 ceiling are the two things to ask the Revenue Service about directly.