Gift of Real Estate — How to Transfer It

What a gift is

A gift is a contract in which the donor undertakes to make a gratuitous provision for the benefit of the recipient at the expense of their own assets. In the case of real estate, this means the gratuitous transfer of ownership of an apartment, house or plot. The essence of a gift is its gratuitous nature, which distinguishes it from a sale.

A gift contract comes into effect with the consent of both parties, because the recipient may accept the gift or not accept it. This institution is regulated by the Civil Code, which specifies both the rights and obligations of the parties and exceptional situations, such as the revocation of a gift.

Form and course of a gift

A gift of real estate must be concluded in the form of a notarial deed, and this under pain of nullity. This means that informal arrangements or an ordinary written contract will not produce the effect of transferring ownership. The notary's role is to draw up the deed, instruct the parties about its effects and file the application for entry in the land and mortgage register.

In the notarial deed, the subject of the gift and any additional provisions can be precisely specified. After the gift is made, it is necessary to update Section II of the land and mortgage register in order to disclose the recipient as the new owner.

Gift tax

The transfer of real estate by gift is subject to the provisions on inheritance and gift tax. The amount of any burden depends on the tax group determined by the degree of kinship between the parties. The closest family may benefit from an exemption, provided they complete the required formalities, including reporting the acquisition within the statutory time limit.

When the gift is made in the form of a notarial deed, part of the obligations connected with the tax is fulfilled with the participation of the notary as the payer. It is worth, however, establishing in advance with the notary what conditions must be met in order to retain the right to the exemption.

Securing the donor's interests

When transferring real estate, the donor often wants to retain certain powers, especially when a family home or apartment is involved. A popular solution is establishing an easement of dwelling for the benefit of the donor, giving the right to use the premises for life. Such security is entered in the land and mortgage register.

Alternatives may be other legal structures that make it possible to reconcile the transfer of ownership with the need to provide the donor with care or maintenance. It is worth consulting the choice of an appropriate solution with a notary, taking into account the individual situation of the family.

Revocation of a gift

Although a gift is as a rule permanent, the Civil Code provides for exceptional situations in which it can be revoked. The most commonly cited ground is gross ingratitude of the recipient towards the donor. Revoking a gift that has been performed requires making an appropriate declaration and may give rise to an obligation to return the subject of the gift.

The possibility of revocation is, however, limited by grounds and time limits, and assessing whether gross ingratitude has occurred can be complex. In practice, disputes over the revocation of a gift not infrequently end up in court, so decisions in this area should be made prudently.

Summary: safely transferring real estate

A gift is an effective way of gratuitously transferring real estate to loved ones, requiring, however, that the form of a notarial deed be observed and the tax formalities completed. The closest family may benefit from an exemption, and the donor may secure their needs, for example through an easement of dwelling. It is worth remembering that in exceptional situations a gift can be revoked, so the whole operation is best carried out prudently and with the help of a notary.