The Ministry: aparthotels are commercial.

Government Resolution №602 (January 2026) introduced mandatory medical insurance for tourists — minimum 30,000 GEL coverage. By spring 2026 the regime is enforced at entry: tourists without insurance are refused. This has become a check layer ahead of booking. What this does to STR metrics operationally will be visible after the summer season; at the time of this note, no aggregate compliance / cancellation impact data is in the public domain.

The decision concerns capital gains tax on sale. The Ministry of Finance of Georgia published a clarification via infohub.rs.ge: apartments within hotel infrastructure are not classified as residential housing and are taxed as commercial property — 20% on the surplus at sale, no 2-year exemption if the unit was rented. By contrast: residential housing — 5% on surplus, 0% after 2 years of ownership. This is a clarification, not a new rule — the Ministry formalized a classification that previously sat in a grey zone. Operationally it means: many Batumi STR units, legally registered as aparthotel, are sold as commercial, not as residential. A buyer planning to exit "tax-free after 2 years" is planning incorrectly.

Before 2022, foreign buyers rarely exceeded 25% of Batumi transactions. Recov now shows 47% — a structural shift, not a one-off reaction. That 90% of y/y growth is foreign means: the Georgian domestic buyer is no longer the market's main driver. What this means for the local seller — a topic for a future issue.

Galt & Taggart's 2025 Review named 2026 the absorption-test year — supply for sale continues to grow, and the market question is now: will demand absorb new units, or will supply pressure compress yields further. The half-year mark is too early for a verdict; April transaction data shows absorption holding at current pace, but this is early summer. The real test is August-October.