House donation agreement: template, Word & PDF

What is a house donation agreement?

A gift agreement for a house is a legal agreement between two parties—the donor (who is giving away the house) and the recipient (who is receiving the house)—in which ownership of a property is transferred free of charge. In this agreement, the donor waives any consideration from the donee and transfers ownership of the house out of generosity.

A deed of gift for a house should contain the following information:

1. The identity of the parties involved (donor and recipient) as well as their addresses and contact details.
2. A detailed description of the property, including address, land registry details, and parcel numbers, if applicable.
3. Confirmation that the gift is made free of charge and without any consideration from the recipient.
4. Any rights of recovery or reservation that the donor wishes to retain (e.g., right of residence or usufruct).
5. Confirmation that existing encumbrances, such as mortgages or land charges, are known and will be assumed if necessary.
6. A declaration of consent to the registration of the gift in the land register.

In many countries, notarization of the deed of gift is required by law for the donation of a house.

This means that the contract must be drawn up and certified by a notary in order to be legally valid. In addition, the gift must be entered in the land register in order to officially document the transfer of ownership.

What should be considered when donating a house?

When donating a house, there are a few important points to consider in order to avoid potential legal and financial problems:

1. Notarization: A gift agreement for a house must be notarized by a notary public. This ensures the legal validity of the gift and provides security for both parties. (More on this: When is a gift agreement valid?)
2. Land registry entry: The donation must be entered in the land registry to officially document the transfer of ownership. The notary can usually arrange this for you.
3. Gift tax: Check the tax implications of the gift. In many countries, gift taxes are levied, but there are allowances that can vary depending on the degree of kinship. (Gift agreement taxes)
4. Rights of recovery: Clarify whether and under what conditions the donor can reclaim the house. This may be relevant, for example, in the event of financial hardship on the part of the donor or in the event of divorce of the recipient.
5. Reserved rights: Consider whether the donor wishes to retain certain rights, such as a right of residence or usufruct. These rights should be specified in the gift agreement.
6. Compulsory portion claims: Consider possible compulsory portion claims by other heirs. A gift may, under certain circumstances, trigger supplementary compulsory portion claims if it is made within a certain period of time before the inheritance.
7. Existing encumbrances: Find out about any existing mortgages or land charges on the house, as these may also be transferred to the recipient.
8. Financing: If the recipient needs additional financial resources for the house, for example for renovations or conversions, financing options should be explored.
9. Legal advice: Consult a lawyer or notary to ensure that all legal aspects of the gift are handled correctly and in the interests of both parties.

By carefully reviewing and considering these points, you can help ensure that the gift of a house is a satisfactory and smooth process for everyone involved.

What are the costs involved in donating a house?

Various costs may be incurred when donating a house. The exact amounts may vary depending on the country and individual situation. In general, the following costs should be taken into account:

1. Notary fees: The notarization of the gift agreement by a notary is required by law. Notary fees are based on the value of the house and the respective fee schedules. They can range from several hundred to several thousand euros.
2. Land registry fees: Fees are incurred for registering the gift in the land registry. These vary depending on the state and the value of the house, but are generally in the low three-digit range.
3. Gift tax: Depending on the value of the house and the degree of kinship between the donor and the recipient, gift tax may be payable. However, there are allowances that vary depending on the degree of kinship. Find out about the applicable allowances and tax rates in your country.
4. Appraisal or valuation fees: In some cases, it may be necessary to hire an appraiser or valuer to determine the value of the house. This can be particularly relevant when calculating gift tax or determining notary fees. The costs vary depending on the appraiser and the amount of work involved.
5. Legal advice: If you consult a lawyer or tax advisor for advice or to review the gift agreement, additional costs may arise. These depend on the respective advisor and the amount of advice required.
6. Other fees: Depending on your individual situation, additional fees may apply, for example for the cancellation of land charges or the adjustment of insurance policies.

Calculation example: Gift agreement for a house – EUR 500,000

1. Notary fees: Assuming that the notary fees amount to 1.5% of the value of the house. In this case, the notary fees would amount to EUR 7,500 (EUR 500,000 x 0.015).
2. Land registry fees: Land registry fees vary depending on the state and can amount to around 0.5% of the property value. In this example, they would cost EUR 2,500 (EUR 500,000 x 0.005).
3. Gift tax: Gift tax depends on the degree of kinship and there are tax allowances. Assuming that the allowance for the recipient is EUR 400,000 and the tax rate for the remaining amount is 15%, the gift tax would then amount to EUR 15,000 ((EUR 500,000 - EUR 400,000) x 0.15).
4. Appraisal or valuation fees: Let's assume that an appraiser determines the value of the house to be EUR 1,000.
5. Legal advice: The costs for legal advice can vary depending on the amount of work involved and the advisor. In this example, we assume that the consulting costs amount to EUR 1,500.
6. Other fees: We assume that no further fees will be incurred.

In total, donating a house worth EUR 500,000 in this example would cost around EUR 26,500 (EUR 7,500 + EUR 2,500 + EUR 15,000 + EUR 1,000 + EUR 1,500).

Which is better: a gift or a transfer of ownership?

Donation and transfer are both ways of transferring ownership of a house or land. The terms are often used synonymously, but there are differences between them. A donation is a transfer of ownership without compensation, while a transfer generally refers to a transfer with compensation, e.g., through sale or exchange.

To decide which option is better, various factors should be taken into account:

1. Family relationship: When making a gift within the family, generous tax allowances can be used depending on the degree of kinship. Transferring property in return for payment, on the other hand, can lead to a higher tax burden.
2. Tax considerations: Gift taxes may apply to gifts. Depending on the value of the house and the tax situation of the donor and recipient, this can result in different tax burdens. Transferring ownership may incur real estate transfer taxes, income taxes, and, in some cases, value-added taxes. Detailed tax advice is recommended in order to determine the best option. Further information on this topic: Real estate gift agreement.
3. Financial situation: A gift is free of charge, whereas a transfer of ownership involves an expected financial consideration. If the donor is financially secure and does not require any consideration, a gift may be appropriate. On the other hand, a transfer of ownership may improve the donor's financial situation if they require the proceeds from the sale.
4. Future planning: A gift often has long-term effects on family assets and future planning. A transfer, on the other hand, is usually a one-time transaction in which the recipient acquires property in exchange for payment.
5. Emotional aspects: A gift can promote family cohesion, while a transfer of ownership can lead to differences if the sale price or consideration does not meet expectations.
6. Legal aspects: Legal aspects must be taken into account for both options, such as notarization, land registry entries, and, if applicable, rights of recovery and reservation.

Overall, the decision between gifting and transfer depends on the individual situation, financial and tax aspects, and personal preferences of the parties involved. Comprehensive advice from a lawyer, tax advisor, or notary is recommended in order to find the optimal solution for your situation.

Gift agreement for a house – what are the advantages?

A deed of gift for a house offers various advantages for both the donor and the recipient. Some of the most important advantages are:

1. Tax advantages: Many countries offer generous tax allowances for gifts, especially between close family members. This means that potential inheritance taxes can be reduced or avoided altogether if the house is gifted during the owner's lifetime.
2. Early transfer of assets: A gift agreement allows the donor to transfer assets to the recipient during their lifetime, which simplifies future succession and prevents potential inheritance disputes.
3. Securing family assets: A gift can help keep family assets within the family and ensure that the house is transferred to the desired person, e.g., a child or other relative.
4. Individual design options: Special provisions can be included in the gift agreement, e.g., rights of recovery in the event of certain circumstances (such as divorce or insolvency of the recipient) or rights of retention such as right of residence or usufruct for the donor.
5. Support for the recipient: Donating a house can provide financial security for the recipient and enable them to own their own home without having to take out a loan or buy a house.
6. Emotional benefits: A gift can strengthen family ties by expressing the donor's desire to pass on their wealth to a loved one and support them.

Despite these advantages, the potential legal and tax consequences as well as the costs of a gift agreement for a house should also be taken into account.

What are the disadvantages of a house gift agreement?

A gift agreement for a house can also have some disadvantages. Here are some of the most important disadvantages that can arise for both the donor and the recipient:

1. Irrevocability: A gift agreement is generally irrevocable once it has been concluded. This means that the donor cannot simply reclaim the house if they change their mind or their financial situation deteriorates.
2. Rights of recovery: Although the donor can stipulate rights of recovery in the gift agreement, these only apply under certain conditions, e.g., in the event of divorce, insolvency, or death of the recipient. Such rights of recovery can lead to uncertainty and potential conflicts.
3. Tax implications: Although gifts can offer tax advantages, gift taxes may also apply, depending on the degree of kinship and the value of the property. In some cases, the taxes can be significant.
4. Liability for debts: When donating a house, existing encumbrances such as mortgages or land charges may be transferred to the recipient. This can entail financial risks for the recipient. Further information on this topic: Gift agreement for real estate.
5. Loss of social benefits: Donating a house may result in the recipient losing their entitlement to certain social benefits, as the house is counted as an asset.
6. Claims for supplementary compulsory portions: If the donor dies and the gift was made within a certain period before their death, beneficiaries of a compulsory portion can assert a claim for a supplementary compulsory portion in order to increase their compulsory portion of the total inheritance. This can lead to financial burdens for the recipient of the gift.
7. Notarization and costs: In many countries, the donation of a house requires notarization, which incurs costs. In addition, gift taxes, land registry fees, and possibly legal advice and appraisal fees are incurred.

Before deciding on a gift agreement for a house, you should carefully weigh up all the possible advantages and disadvantages.

Is a gift agreement valid without a notary?

The validity of a gift agreement without notarization is a complex issue that depends heavily on the legal regulations of the respective country and the type of gift. In Germany, for example, the provisions of the Civil Code (BGB) are decisive.

For the donation of movable property, such as money, jewelry, or vehicles, no notarial certification is required under Section 518 (1) of the German Civil Code (BGB). An oral contract or a simple written agreement may be sufficient in this case. The transfer of the gifted item usually completes the gift. A special feature here is the so-called hand gift, which is executed by the direct transfer of the item without a written contract.

In the case of real estate gifts, the legal situation in Germany is different. According to Section 311b (1) of the German Civil Code (BGB), notarization is mandatory for the gift of land or real estate. Without this notarization, the gift agreement is void, which means that the gift is legally ineffective.

Notarization not only serves to provide legal certainty, but also ensures that all parties are fully informed about the implications of their decision. In addition, the legal requirements are met and the transfer can be entered in the land register.

Other legal aspects should also be taken into account:

• Gifts may be subject to gift tax under certain circumstances. Tax allowances and rates vary depending on the degree of kinship between the donor and the recipient.
• The donation may have repercussions on social security benefits or inheritance rights. This is particularly relevant when it comes to larger assets or real estate.

What tax law aspects need to be considered in a house gift agreement?

When transferring real estate through a gift agreement, there are various tax law aspects to consider that are important for both the donor and the recipient. The regulations vary depending on the country and legal system, but some basic tax law points are generally relevant.

Gift tax: In Germany, gifts of real estate are subject to gift tax in accordance with Sections 7 ff. of the Inheritance and Gift Tax Act (ErbStG). The amount of gift tax and the allowances vary depending on the degree of kinship between the donor and the recipient, as well as the value of the real estate. According to Section 16 ErbStG, close relatives such as spouses and children have higher allowances and benefit from lower tax rates than distant relatives or unrelated persons.

Tax allowances and tax brackets: It is advisable to find out about the current tax allowances and tax brackets in order to determine the potential tax burden. In Germany, these allowances can be claimed again every ten years in accordance with Section 14 of the German Inheritance Tax Act (ErbStG).

Property valuation: In order to calculate the gift tax correctly, the property must be valued. In Germany, this is usually done using the market value, which can be determined by an appraisal, or the official standard value is used as a basis.

Tax reporting obligation: In Germany, there is a reporting obligation for gifts. According to Section 30 of the German Gift Tax Act (ErbStG), the gift must be reported to the tax office within a specified period. The certifying notary can take care of this reporting, which makes things easier for those involved.

Inheritance tax and compulsory portion supplement claims: If the donor dies within a certain period after the gift (in Germany, usually within ten years), the gift may be relevant when calculating inheritance tax or compulsory portion supplement claims, as regulated in § 10 ErbStG (Inheritance Tax Act).

House donation agreement: What laws must be observed?

In Germany, you should observe the following laws and regulations when concluding a gift agreement for a house:

1. Civil Code (BGB): The BGB contains the general regulations governing gifts. The key provisions relating to gifts are set out in sections 516–534 of the BGB.
   
2. Real Estate Transfer Tax Act (GrEStG): Although gifts of real estate are generally exempt from real estate transfer tax, you should consult the GrEStG to ensure that your gift meets the requirements for exemption (Section 3 No. 2 GrEStG).
3. Inheritance Tax and Gift Tax Act (ErbStG): This law regulates the taxation of gifts and inheritances in Germany. Gift tax is based on the degree of kinship and the value of the property (Sections 16-19 ErbStG). Exemptions and tax classes are specified in Sections 15-16 ErbStG.
4. Land Registry Act (GBO): The Land Registry Act regulates the registration of changes in ownership in the land register, including the donation of real estate. The requirements for registration, the role of the notary, and the necessary documents and procedures are specified in the GBO.
   
5. Notarization Act (BeurkG): The Notarization Act regulates the notarization of legal transactions, including gift agreements for real estate. It specifies the duties, responsibilities, and fees of notaries, as well as the requirements for the contract and the notarization process.

House donation agreement: template, Word & PDF

Gift agreement for a house (sample)

Between

[name of donor], born on [date of birth], residing at [address],
(hereinafter referred to as "donor")
and

[name of the donee], born on [date of birth], residing at [address],
(hereinafter referred to as the "donee")
the following gift agreement is concluded:

§Section 1 Object of the gift

(1) The donor transfers to the donee the property registered in the land register of [place], sheet [number], with the parcel number [number] and the address [address] (hereinafter referred to as "property").

(2) There is a residential house on the property (hereinafter referred to as the "House").

(3) The donor transfers ownership of the land and the house to the donee without consideration.

§2 Transfer and transfer certificate

(1) The donor undertakes to hand over the land and the house to the donee immediately after signing this agreement.

(2) The parties shall draw up and sign a written transfer certificate after the transfer.

§3 Land register

(1) The donee undertakes to arrange for the transfer of ownership in the land register immediately after the transfer.

(2) The donor hereby declares his consent to the transfer of ownership in the land register.

§4 Exemption from public charges

The donor undertakes to indemnify the donee against all public charges and levies relating to the land and the house which have arisen up to the date of transfer.

§5 [Optional: Reserved rights]

[If reserved rights such as right of residence, usufruct, right of reclamation, right of first refusal or expectant right are to be agreed, insert appropriate clauses here].

§6 Final provisions

(1) Amendments and additions to this contract must be made in writing. This also applies to the waiver of the written form requirement.

(2) Should individual provisions of this contract be or become invalid or unenforceable, the validity of the remaining provisions shall remain unaffected.
(3) The law of the country [Land] in which the property is located shall apply.

Place, date

[Name of donor] [Name of donee]
(sign) (sign)

What are the rights of retention in a house gift agreement?

Reservation rights are clauses that can be included in a gift agreement for a house in order to secure certain rights or uses of the property for the donor, even after the gift has been made. Here are some common reservation rights used in gift agreements for houses:

1. Right of residence: The donor retains the right to continue living in the property or to use part of it. The right of residence can be agreed for life or for a specific period of time. It can be granted free of charge or in return for payment of rent.
2. Usufruct: A usufruct right allows the donor to retain the right to derive economic benefits from the property, such as rental income or the use of fruits and yields. Usufruct can also be established for life or for a specific period of time.
3. Right of recovery: A right of recovery allows the donor to revoke the gift under certain conditions, e.g. if the recipient dies before the donor or if the recipient fails to fulfill their contractual obligations.
4. Right of first refusal: The donor can secure a right of first refusal, which gives them the right to buy back the property at a later date if the recipient wishes to sell it. This right can help to keep the house within the family or give the donor the opportunity to repurchase the property if their financial situation improves.
5. Deferred right: A deferred right allows the donor to postpone the gift until a later date or to make the gift effective only after a certain event has occurred (e.g., the death of the donor). In the meantime, ownership of the house remains with the donor.

Further information on this topic: Real estate gift agreement.

Gift agreement for a house versus a will

Both a deed of gift for a house and a will are instruments for transferring assets, but they differ in terms of timing, formalities, and tax implications. Here are the main differences between a deed of gift and a will:

1. Time of transfer:

• Gift agreement: The transfer of the house takes place during the lifetime of the donor, and the recipient immediately receives ownership of the property.
• Will: The transfer of the house only takes place after the death of the testator and comes into effect as soon as the will is opened and the inheritance matters have been settled.

1. Formalities:

• Deed of gift: In many countries, a notarized deed is required for the gift of a house. The gift must be entered in the land register to document the transfer of ownership.
• Will: A will can be either handwritten (holographic will) or notarized (public will). It is only entered in the land register after the death of the testator and the opening of the will.

1. Revocation and changes:

• Gift agreement: Once the gift agreement has been concluded and entered in the land register, it can only be revoked or amended under certain conditions, e.g. in the event of gross ingratitude or impoverishment of the donor.
• Will: The testator may amend or revoke his will at any time during his lifetime, provided he is legally competent.

1. Tax aspects:

• Gift agreement: Gift taxes may apply when gifting a house, depending on the degree of kinship and the value of the property. However, there are allowances that vary depending on the degree of kinship.
• Will: The transfer of a house through a will is subject to inheritance tax. The tax rates and allowances are similar to those for gift tax, but the tax regulations and allowances may vary from state to state.

1. Compulsory portion claims:

• Gift agreement: Gifts made during the donor's lifetime can be taken into account when calculating compulsory portion claims. In many countries, there are regulations governing compulsory portion supplements if gifts were made within a certain period prior to the donor's death.
• Will: Beneficiaries of a compulsory portion may assert their claim to their compulsory portion against the testamentary heirs if they receive less under the will than they are entitled to under the statutory succession.

The decision as to whether an f or a will is the best option depends on the individual circumstances, goals, and wishes of the owner.