The gift contract for real estate is a common occurrence in legal transactions, especially among family members. Although the form appears simple, this contract includes several legal requirements that must be fulfilled to be valid.
To be legally valid, a gift contract for real estate must meet the following conditions:
In addition to general rules on gifting, the regulations governing real estate transactions apply to real estate gift contracts.
This contract must be made in writing and notarized before a public notary with jurisdiction over the property's location.
If the contract does not meet the legally prescribed form, it is considered null and void and has no legal effect.
If the subject of the gift is property that belongs to the marital joint property, explicit consent from the donor’s spouse is required.
The donor must have full legal capacity. If the donor is a minor, the legal representative concludes the contract on their behalf, with prior approval from the social welfare center.
Once the contract is concluded and notarized, the public notary is obligated to submit a request for registration of ownership in the competent real estate cadastre.
The recipient becomes the legal owner only after the registration is completed.
The next obligation is to submit a gift tax declaration. Legally, the notary should file this declaration on your behalf with your signature. However, in practice, this is not always done, so it is recommended to check with the notary after signing.
Failure to submit the declaration on time may lead to misdemeanor proceedings.
Under the Law on Property Taxes, gift tax is paid on the transferred ownership rights or other rights over the gifted real estate.
The gift recipient is the taxpayer.
The gift tax rate is 2.5% of the established taxable base.
If the recipient is a first-degree relative (e.g. child) or spouse, the gift is tax-exempt. There are other exemptions as well, such as gifts of land up to 10 ares.
If the gift is given to a second-degree relative (e.g. sibling), the tax rate is 1.5%.
According to Article 168 of the Family Law, property acquired as a gift during marriage is considered separate property of the recipient spouse.
This property is managed and disposed of solely by the spouse who received the gift.
The same rules apply to property relations between common-law partners.
In case of divorce or annulment of marriage, customary gifts exchanged between spouses are not returned.
However, valuable gifts given during cohabitation may be returned if the court finds a disproportion between the gift’s value and the joint property.
If the return of the gift would cause obvious unfairness to the other spouse, the court may deny the request.
Gifts are returned in the condition they were in at the time of ending the joint life.
The gift contract may be terminated:
Due to the complexity of the reasons that may lead to termination, annulment, or return of the gifted property, legal assistance is recommended to ensure proper guidance and protection.
When an heir waives an inheritance in favor of another, it is legally treated as if the heir accepted the inheritance and then gifted it to another heir.
This legal act, although originating from inheritance law, is considered a gift and is therefore subject to all rules applicable to gift contracts.
For example, if an heir gives up inheritance in favor of a brother, the brother must pay gift tax at a rate of 1.5%, since the gift is between second-degree relatives.
Due to the legal nuances of such actions, it is strongly advised to consult an attorney before transferring an inheritance share.
