Gift Deeds for Real Estate: A Comprehensive Guide

What is a Gift Deed for Property?

A deed of gift is a legally binding document that formally documents the transfer of a property from one person (the donor) to another (the donee). In order for this transfer to be legally valid, specific requirements must be met, especially in the case of immovable property. The deed of gift must, among other things, contain a clear description of the property in question, the full names of the parties, as well as signatures from both parties.

Legal Requirements for a Gift Certificate

In order for a deed of gift regarding a property to be legally valid, the following formal requirements must be met:

• Writing: The gift deed must be in writing.
• Transfer declaration: The document must clearly state that the property is transferred as a gift.
• Specification of Share: It must be stated how much of the property is transferred, for example 50% or the entire property.
• Signatures: The gift giver and recipient must sign the gift deed.

In addition to these basic requirements, the gift deed must be witnessed by two people in order for the recipient to obtain title to the property.

Financial and Fiscal Aspects

When a property is given away as a gift, the recipient takes over the donor's tax situation according to the so-called continuity principle. This means that if the recipient later sells the property, the capital gains tax is calculated based on the original acquisition cost that the donor had.

It is also important to note that if consideration is given for the property equal to or greater than the property's assessed value, the transfer is no longer considered a gift but a purchase. This can have significant tax implications.

Practical Aspects of Creating Gift Deeds

After the gift deed is drawn up and signed, it must be registered to be valid. For real estate, this means applying for legal title to the Land Survey, something that must be done within three months of the gift deed being signed.

It is also important that the deed of gift is kept in a safe place, as it is an important document that may be needed in the future, for example in the event of a possible sale of the property.

Things to consider when creating a gift certificate

In addition to the formal requirements, there are several aspects that are important to consider when writing a gift letter:

• Conditions for the Gift: The gift giver can introduce specific conditions in the gift deed, for example that the gift must be the individual property of the recipient. This means that the property will not be included in any property division in the event of a divorce.
• Protection of the gift against attachment: By introducing certain conditions, the gift deed can protect the gift from attachment for the donor's debts.

Conclusion

Giving away a property as a gift is a significant act that requires careful consideration of all legal and practical aspects. A properly drawn up deed of gift is essential to ensure that the transfer is valid and that both the donor and the recipient are protected. By following the guidelines outlined in this article, you can be sure that your real estate gift is handled correctly and safely.