Gift agreements are concluded between the donor and the recipient (donee). They are drawn up when one party to the agreement wishes to give the other money or a selected asset from their property as a gift. This matter is regulated by the provisions of the Civil Code. Gift agreements concerning land or premises, as well as a cooperative ownership right to premises, must be drawn up in the form of a notarial deed.
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In what situations must gift tax be paid?
Often, signing a gift agreement entails the obligation to pay gift tax. This obligation rests with the recipient. However, paying the tax is not always required, and its amount depends on several factors – above all, on which tax group the recipient falls into and, consequently, on the applicable tax-free amount.
There are three tax groups (I, II and III). Pursuant to Article 4a of the Inheritance and Gift Tax Act, the acquisition of ownership of property or property rights by a spouse, descendants, ascendants, a stepchild, siblings, a stepfather or a stepmother is exempt from tax, provided that the conditions set out in that article are met.