Donation of property
Some of our clients has asked us for legal help of donation of property.
The donation, under Article 225 of the Obligations and Contracts Act, is a legal act where the donor gratuitously transfers ownership of an item or property to the donee, who must accept it.
This process is particularly relevant for real estate, where various types of properties, such as
- agricultural land,
- buildings, and
- apartments,
which can be donated.
The process of donating real estate closely mirrors the sale of property, as it requires a notarized deed signed by both parties.
However, the critical difference is that the transfer of ownership in a donation is entirely gratuitous, with the donor receiving no payment or financial obligation in return.
It’s important to note that any encumbrances on the donated property remain attached to it, even after the transfer of ownership.
The donation must meet the legal conditions.
For example, future promises to donate or donations made against good morals or legal norms are null and void.
The procedure also requires similar documentation as a sale, including ownership proof, tax evaluations, and registration at the Registry Agency, at which point the donee becomes the official owner.
Taxes and fees generally fall to the donee, and they vary depending on the relationship between the donor and the donee.
For instance, donations between spouses or linear relatives are exempt from taxes, while donations between unrelated parties can attract higher fees.
A key aspect of real estate donation in some jurisdictions is that property acquired through donation during marriage becomes personal property of the spouse who received it.
This can lead to complications if the donation was made to avoid taxes or fees, as such transactions are often scrutinized.
Ultimately, while the intent of a donation is to transfer property out of generosity, it is advisable for both parties to seek legal consultation to avoid potential legal and financial complications.
