The contract for the gift of real estate is a gratuitous act. By nature, it is unilaterally binding as it creates an obligation for the donor and is formal as it must be concluded and certified by a public notary. Additionally, this contract is also a bilateral legal transaction, as it produces legal effects during the lifetime of the contracting parties.

The key difference of the Gift Contract compared to other Contracts lies in the intention of generosity. The intention of generosity is an act of charity that requires the donor to express awareness and intention to transfer ownership or some other right or benefit to another without compensation. The donor’s intention must be clear, genuine, and unequivocal.

Through the act of charity, the donor expresses gratitude and care towards the recipient, while the obligation of the recipient is to express gratitude towards the donor.

THE RECIPIENT DOES NOT HAVE TO BE A LEGALLY CAPABLE PERSON, WHICH MEANS THAT THE RECIPIENT CAN ALSO BE A MINOR.

Gift tax – how is it determined and calculated?

The basis for calculating the gift tax is the market value of the received property on the day the tax obligation arises, and it is determined by the competent tax authority.

The obligation to pay the gift tax falls on the party receiving the gift – the recipient, considering that it is a legal transaction based on an act of charity.

What is the gift tax rate?

The gift tax rate is proportional.

1. The recipient who is in the first line of inheritance with the donor or is their spouse DOES NOT PAY gift tax;

2. The recipient who is in the second line of inheritance with the donor pays tax at a rate of 1.5% of the determined market value;

3. The recipient who is in the third and further lines of inheritance, that is, is not related to the donor, pays tax at a rate of 2.5%;

The agency “Heroldo Real Estate” d.o.o. provides services for drafting the Gift Contract for real estate and legal consulting services regarding the gift of real estate.