The gift of real estate is a common transaction, especially between close relatives, such as parents and children, grandparents and grandchildren, or between spouses. The main reason for the popularity of such gifts is that in these cases no local tax on the transfer of the property is payable. If, however, the gift is made between persons who are not closely related, the local tax is due.
It is important to note that the gift may be challenged by heirs with a reserved share after the donor’s death. Likewise, the gift may be revoked if the donee fails to provide the donor with the maintenance they require.
Parties to the gift contract
The parties to the gift contract are:
- Donor – the person who transfers the property.
- Donee – the person who receives the property.
Minors under the age of 14 cannot be donors of real estate or ideal parts thereof. Such gifts are null and void by law. Even with the court’s permission, such a contract cannot be concluded. Minors, however, may be given real estate as a gift. No court permission is required for this purpose.
Form of the gift contract
A contract for the gift of real estate must be concluded in the form of a notarial deed. Very often the donor reserves the lifelong right of use over the gifted property.
Documents required for the gift of a property
The following documents are required for the execution of the transaction before a notary:
Document of title to the property
The document certifies the donor’s ownership of the property. This may be a notarial deed, a will, a court decision, a voluntary partition agreement, etc.
Certificate of tax valuation
It is issued by the relevant department or office for local taxes and fees of the municipality where the property is located. The certificate must state that there are no unpaid building tax and waste-collection fee.
Certificate of marital status, spouse and children, or of family relationships
This is required if the gift is made in favour of a child or spouse. The certificate is issued by the ESGRAON office of the municipality of the donor’s permanent or current address. For a gift between spouses, a marriage certificate may be presented, and for a gift in favour of a child – the child’s birth certificate.
Declaration under Article 26 of the Family Code
The gift of the family home, even if it is the personal property of the donor, requires the consent of the other spouse. This is necessary if there is no other home – jointly or personally owned.
Sketch of the property
The sketch is issued by the Geodesy, Cartography and Cadastre Office or the technical service of the municipality. It is required for the gift of land or ideal parts thereof.
Diagram of a self-contained unit in a building
This is issued for areas with a cadastral map in force. It is valid until changes occur in the property data.
Certificate of heirs
This is mandatory if the property was acquired by inheritance. The certificate is issued by the municipality of the last permanent address of the deceased person.
Decision of the competent body in the case of commercial companies
If the donor is a commercial company (for example, a sole-owner limited liability company (EOOD), a limited liability company (OOD) or a joint-stock company (AD)), a decision of its competent body is required, such as the general meeting of the partners, the board of directors or the sole owner of the capital.
Power of attorney
If any of the parties is represented by an attorney-in-fact, the power of attorney must have notarial certification of the signature and the content, carried out simultaneously.
Declarations
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- Declaration under Article 264(1) of the Tax and Social Insurance Procedure Code – no longer required from the donor.
- Declarations under Article 25(8) of the Notaries and Notarial Activity Act – signed by both parties.
The declarations are certified before a notary if they are signed by attorneys-in-fact.
Particularities of the gift of real estate
- Local tax
The local tax on the gift is due if the gift is made between persons who are not close relatives. In the case of a gift between parents and children, grandparents and grandchildren, or spouses, the local tax is not due. - Challenging the gift
Heirs with a reserved share have the right to challenge the gift after the donor’s death. Likewise, the gift may be revoked if the donee fails to provide the donor with the necessary maintenance. - Lifelong right of use
The donor often reserves the lifelong right of use over the gifted property. This restriction on the property is entered in the notarial deed.
If you need legal advice or assistance in connection with the gift of real estate, contact us on: 0887550706 or by e-mail: [email protected]
