Rental Income Tax on a Batumi Apartment for an Israeli Owner

If you rent out a Batumi apartment as an individual, Georgia's tax code taxes that rental income at 5% of the gross amount received, with no deductions for expenses. This guide covers the Georgian side only, which is published and verifiable; your Israeli tax position on the same income is a separate question for your own adviser.

The Georgian rule, as published

Georgia's tax code, article 81 paragraph 2, sets a 5% rate on income a person earns from renting out residential property to an organisation or to another person, where that individual does not deduct any expenses against the income. In practice, that means the 5% applies to the gross rent you receive, not to a net figure after management fees, maintenance or other running costs. This is distinct from the general personal income tax rate of 20% set out in article 81 paragraph 1, which applies to income outside this specific rental category. Income outside this rental category is checked against the right provision with a tax adviser.

What this means in a Batumi context

Several projects in Orven's Batumi collection describe operator-managed rental arrangements, such as the Royal Tulip programme at The Parallel. None of that changes the Georgian treatment: rental income earned by an individual owner, however it is collected, falls under the same 5% gross-income rule unless your structure places you elsewhere in the tax code, a point to confirm with a tax adviser.

If you sell the apartment rather than rent it, article 81 paragraph 3 of the tax code sets a 5% rate on the gain from the sale. Article 82 paragraph 1(f.a) exempts that gain entirely if you have held the apartment, with its attached land, for more than two years before selling. Holding period is therefore a meaningful factor in planning an exit, separate from the rental income question above.

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What is not covered here

Georgia's annual property tax (articles 202 and 206 of the tax code) depends on household income and the property's market value; its current rates are confirmed with a tax adviser. Whether this rental income is also taxable in Israel depends on your own circumstances: this guide does not describe Israeli tax rules, so confirm that side with your own adviser.

Working out what a rental actually nets you

A simple way to frame the numbers, without projecting a return, is: gross yield equals annual rent divided by the purchase price; net yield subtracts the 5% tax, management, vacancy periods, maintenance and insurance, then divides by the total cost of acquiring and furnishing the unit. For more, see our guide on calculating rental yield on a Batumi apartment and Batumi short-term rental and seasonality. Orven's Israel page lists the Batumi projects most requested by Israeli buyers.

Next step with Orven

Message Orven on WhatsApp at +971 52 776 1939 or email sales@orvenproperties.com, and your adviser connects you with a Georgian tax professional to confirm current rates and your own Israeli adviser for the reporting side.

FAQ

What rate applies to rental income from a Batumi apartment? 5% of gross rental income under article 81 paragraph 2 of Georgia's tax code, with no deduction for expenses, for an individual owner.

Does selling the apartment trigger a different tax? Yes, a 5% rate on the gain under article 81 paragraph 3, unless the apartment has been held for more than two years, in which case the gain is exempt.

Is this rental income also taxable in Israel? That depends on your own circumstances. This guide covers the Georgian side only; confirm your Israeli position with your own adviser.

Does a developer's rental programme change the Georgian tax rate? No. The 5% gross-income rule applies to rental income earned by an individual regardless of how it is collected or distributed through an operator's programme.