Renting out property in Georgia is a popular income source. The choice between long-term and short-term letting affects both yield and taxes.
Long-term rental
- Steady income, minimal operational hassle.
- Lower yield, but lower vacancy and wear-and-tear risk.
- Good for those who don't want to deal with guests and cleaning.
Short-term rental (Airbnb/Booking)
- Higher potential yield in tourist locations (central Tbilisi, the Batumi coast).
- Requires management: check-in, cleaning, reviews, seasonality.
- Often handed to a property manager for a percentage.
Taxes — the key difference
When letting residential property (long-term or short-term), you can pay just 5% on gross rental income instead of the standard 20%, if set up correctly (see the article on registering an IE).
VAT threshold
If your total income from entrepreneurial activity (including rent) exceeds 100,000 GEL over 12 consecutive months, you must register for VAT and pay 18% on the amount above the threshold. This matters when letting several properties at scale.
Practical tip
Calculate net yield: subtract tax, utilities, platform/manager fees, furniture depreciation and vacancy from gross revenue. The real cost of maintaining a flat is covered in a separate article; the IE tax regime in the article on the 1% rate.