What should I do if I want to give my wife a property but we have community of property (SJM)? Can the transfer of the property be divided between my husband and children? What if my parents want to gift the apartment so that it belongs to me alone? In this article, we answer the most common questions we at The Affordable Lawyer address when gifting real estate in a marriage. We also describe mistakes that many of our clients have made. Read on to learn how to avoid them.
You can gift a freehold property to your spouse by means of an ordinary deed of gift.
Property held in community of property (SJM) cannot be gifted between spouses.
The solution is to narrow or extend the SJM by notarial deed.
Donations between spouses are exempt from income tax.
An entry in the Land Registry is always required.
If you are not sure whether your property is part of the SJM, check with our lawyer before drawing up the contract.
A deed of gift is a commitment to transfer an item to the donee or donees, who must agree to the gift. It is therefore truly a contract as a bilateral act and not just a unilateral matter as it often appears. A donation is always a voluntary and gratuitous transfer of ownership of a thing.
In general, you can make a donation without entering into a written contract – in such a case, the contract of donation is concluded by the donor handing over the item and the donee accepting the gift. However, today we are going to talk about the donation of real estate – in which case a written contract is necessary. The signatures on the deed of gift must then be officially certified.
Tip: You can find a number of sample property deeds on the internet. However, these are often outdated or contain errors. It is better to contact us to draw up a deed of gift. We will prepare a complete contractual and legal service for you , including the gift agreement, registration in the Land Registry and taxes. We can do it within 48 hours, flawlessly and professionally.
We often encounter clients wishing to gift property to their spouse. However, SJM plays a crucial role in gifting between spouses. What should you keep in mind in such a case?
JJM is created automatically on marriage and means that most of the property acquired by one spouse after marriage belongs to the other spouse as if it had been acquired in joint ownership, so that both are equally entitled to it. Both the car the husband bought after the wedding and the wages he earns are part of the community property. The unpleasant part, however, is the debts that you will share. We discussed what is in and out of community property in a previous article.
Even an incorrectly drafted proposal for entry into the cadastre can deprive you of your apartment, not to mention the gift agreement. Make sure that the gift to your loved one goes exactly as you planned.
I want a guarantee that the donation will go through as it should
Thus, a gift of real estate between spouses is only possible if it does not fall under SJM. The other option is to narrow the scope of the community property by means of a contract in the form of a notarial deed. The exempted property can then be the subject of a donation.
The narrowing of the matrimonial property regime, or more precisely the agreement on the change of the statutory matrimonial property regime, deals with cases where real estate is to become the exclusive property of only one of the spouses. And not only in terms of donation.
If the spouses intend to deal with the gift of the property in this way, it is necessary to visit a notary who will draw up their agreement on the reduction of the community property.
The reduction of the community property must take the form of a notarial deed. If you want to be sure that the agreement is correctly worded and the Land Registry will register it without reservations, we will prepare it for you, including the proposal for registration.
If a situation arises where one of the spouses owns, for example, an apartment which he bought with his own funds before he got married and subsequently wishes to give his wife part of this property, he can do so in the following way. He enters into a deed of gift with his wife and transfers part of the property to his wife by means of the deed of gift. In the event of such a transfer, the property will be owned by both spouses in the form of joint ownership after registration in the Land Registry.
Another way is the aforementioned marriage contract, in which the spouses agree to extend the matrimonial property to include the property in question. After signing the notarial deed, the property will be included in the matrimonial property and the notarial deed will serve as the basis for the registration of the change of ownership in the Land Register.
If the spouses do not choose another method of transfer (e.g. concluding a purchase contract with a third party), they must donate the property by joint negotiation, which means that they must both agree.
The donee can then be any third party, most often children or parents. We have discussed what to look out for in our article “How to make a proper gift of real estate”.
It is possible to make a gift of real estate from the community property as a whole or only a part of it. In this case, a share of the property will be donated – so parents can give their offspring a ½ share of the family home. The remaining part is then retained in the matrimonial property regime.
Donation to the community of property is an institute introduced by the new Civil Code in 2014. Before its entry into force, real estate could only be acquired by purchase. However, it is now possible, for example, to give a property to a daughter and her husband at the same time so that they acquire it in the community of property. The donation can be made by means of a written contract of donation, which must expressly state that the parties are acquiring the property as community property. This fact must also be stated in the application for entry in the Land Register.
If the spouses have a narrower community of property, they can only acquire the property as community of property. Each of the spouses will thus own a ½ share in the property and will also be registered as new owners in the Land Register.
The property thus acquired is disposed of jointly by both spouses and they are equally liable for it, i.e. for example jointly liable for repairs to the property or liable for a debt relating to the property, where the creditor is entitled to claim payment of the debt from either co-owner in full. Each spouse may then dispose of his or her share of the property as he or she wishes.
If the wife decides to make life unpleasant for her husband, she may sell her share of the property to a third party without the husband’s consent. The property is managed by the co-owners according to the amount of their share, with a majority vote deciding on day-to-day matters. Thus, if the shares are equal, the management of the common property can be quite difficult unless the spouses agree on the disposal of the property.
If the spouses own half, no one has a majority and there is a need to agree. In cases where this is not possible, it is necessary to go to court.
Tip: Previous practice when selling a co-ownership share included the obligation to offer the co-ownership share. This has not been the case for several years. What is the current practice and legislation regarding pre-emption rights? And what rights are left to the co-owners?
An important fact to keep in mind when making a gift between spouses is that the property you give to your wife will remain with her even after the eventual dissolution of the marriage and will therefore not be subject to the division of the matrimonial property in the divorce proceedings.
But what happens if you are getting divorced and you are living in a house owned by your husband that was acquired before the marriage or given to him by his parents? Such a house will not be subject to community of property and therefore will not be subject to a mutual property settlement after the divorce.
However, it is very often the case that the other spouse invests considerable sums of money in the family home. In such a case, the spouse is entitled to a settlement of the investment, i.e. to the return of the funds invested in the property. In divorces, we regularly deal with disputes about investments in exclusive property – without receipts and invoices, proving them is very difficult and often only the court decides.
If you find yourself in one of the situations described above, for example, you are thinking of making a gift of real estate to your spouse, we will be happy to help. Depending on your specific requirements, we will draw up a gift agreement, including a proposal for entry into the Land Registry, advise you on whether a matrimonial property agreement (or a pre-marital property agreement) is advantageous in your particular situation, and also provide advice on property settlement after divorce and the related compensation for investments in the sole property of one spouse.
Tip: Do you own a condominium? You probably know that in cooperative housing, you do not own the apartment as such, but only the cooperative share, which is a participation in a housing cooperative. Is it possible, in such circumstances, to bequeath the condominium to your children in some way? Yes. In our next article you will find out how to inherit a cooperative flat and how the transfer takes place.
Donating property between spouses has clear rules: you can donate property in sole ownership by means of an ordinary deed of gift with subsequent entry in the Land Registry, whereas property in community of property cannot be donated between spouses and the SJM regime must first be regulated by notarial deed. A donation from SJM to a third party requires the consent of both spouses. Between spouses, the gift is generally exempt from income tax, but one must take into account the possible notification obligation and always correctly file the application for registration, otherwise there is a risk of delaying the proceedings. On divorce, the donated property remains with the donee, but claims for reimbursement of investments in the sole property may be settled. The most common mistakes in practice are related to incorrect assessment of the ownership regime, underestimation of the formalities of the contract and defective application for entry in the Land Register.
No. The community property already belongs to both spouses, so it cannot be given to each other. If you want the property to belong to only one of you, you must first modify the SJM regime by notarial deed (e.g. by narrowing it down).
The donation agreement must be in writing. Officially certified signatures are required for filing a petition for entry into the Land Registry. The contract itself does not have to be notarised (unless the SJM regime is also changed).
No. Donations between spouses are exempt from income tax. There is no longer a separate gift tax. However, in certain cases, a notification obligation to the tax authorities may arise (e.g. for high value gifts).
Yes. In the case of sole ownership, you can donate an ideal share (e.g. 1/2). In the case of jointly owned property, both spouses must agree to the gift and it is always made from the joint property.
Generally, no. The gift remains with the donee even after the divorce. The return of the gift is possible only exceptionally – in the case of ingratitude of the donee or in the case of the donor’s distress, provided that the legal conditions are met.
The Cadastral Office has a legal deadline of 30 days, or up to 60 days in more complex cases. The time limit starts to run when the application for registration is filed. A seal is affixed to the property during the procedure.
If the property is part of the community property, it cannot be donated without the consent of the other spouse. Such a legal act would be null and void. In the case of sole ownership, the consent of the other spouse is not required.
We will provide you with a complete legal service related to real estate donation, including a proposal for entry into the Land Registry. We will also advise you on how to deal with taxes in the most advantageous way. We will handle everything quickly and flawlessly, so you don’t have to worry about a thing. You can pay after the service has been provided.
Don't look at a gift horse's teeth! However, if you want to donate land instead of a horse or if you are on the side of the donor, be sure to look carefully. The written contract of gift, which is necessary for the gratuitous transfer of ownership of land, must contain all the legal requirements so that the transfer of ownership can be approved by the land registry office. Omitting a detail in this case could cause you unnecessary grief.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
