Long-Term Rental in Georgia

Overview of Long-Term Leases in Georgia

Long-term residential leasing in Georgia involves fixed-term contracts, usually structured for 6 to 12 months with provisions for annual renewal. Governed primarily by the Civil Code of Georgia (Articles 531–573), a long-term lease contract establishes legally binding rights and responsibilities for both lessors (landlords) and lessees (tenants), covering rent schedules, utility payments, property maintenance, and termination conditions.

Legal Framework and Registration Requirements

• Written Contract Standard: While short oral agreements exist informally, a formal written contract executed in bilingual format (Georgian and English or Russian) is the standard for foreign investors and tenants.
• Public Registry Registration: Under Georgian legislation, any lease agreement signed for a duration exceeding one year must be registered at the National Agency of Public Registry (NAPR) to be enforceable against third parties (such as new owners if the property is sold). Leases of 12 months or less do not legally mandate NAPR registration.
• Currency Regulations: Under the Law of Georgia on the National Bank, domestic transactions and prices quoted between residents within Georgia must technically be settled in Georgian Lari (GEL). Although contract rates are frequently indexed to US Dollars (USD) or Euros (EUR) to protect against currency fluctuations, actual bank transfers or cash payments are settled in GEL based on the official exchange rate on the date of transaction.

Taxation of Long-Term Rental Income

Landlords earning residential lease income in Georgia have access to a streamlined tax structure:

• Simplified 5% Tax Rate: Individual landlords who rent residential property strictly for living (dwelling) purposes can register with the Revenue Service (RS.ge) to pay a preferential 5% flat tax on gross rental receipts. Under this status, no expense deductions are allowed.
• Standard 20% Tax Rate: If a landlord does not register for the preferential status, or if the property is leased for commercial purposes, the standard personal income tax rate of 20% applies to net rental income (gross income minus allowable expenses).

Deposits and Eviction Rules

• Security Deposits: Standard market practice requires a tenant to pay the first month's rent along with a security deposit equivalent to one or two months' rent.
• Eviction Procedures: Unilateral lockout or forced removal of a tenant without statutory legal procedure is illegal in Georgia. Landlords must utilize administrative police protocols (applicable if formal ownership and tenancy terms meet specific criteria) or proceed through the court system to achieve lawful eviction in cases of non-payment or breach of contract.

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