Gift agreement in Georgia — gifting a flat or a share

Under a gift agreement the donor transfers property free of charge to the recipient, with the recipient's consent (Civil Code, Article 524). A gift of movable property takes effect on handover; a gift of real estate — on registration at the Public Registry (Article 525).

A promise of a gift is binding only if made in writing. You may not gift property if it deprives you or your dependants of the means to live (Article 526).

What to know

• A gift can be made subject to a condition or purpose — if the recipient doesn't meet it, the donor can withdraw
• A gift can be revoked if the recipient seriously insults or shows gross ingratitude to the donor or a close relative — within 1 year of the donor learning of it
• If the donor falls into hardship, they can ask for the gift back, provided this doesn't put the recipient into hardship
• Gifted property may be counted towards an heir's share on inheritance

Tax

First- and second-order relatives — children, spouse, parents, siblings — pay no tax on property received as a gift. Third- and fourth-order relatives are exempt up to GEL 150,000 a year; otherwise the value is taxed as income at 20%.

Gift or will?

With a gift, the property passes now and the donor no longer owns it. With a will, it passes only after death and the will can be changed at any time. Which is better depends on your goal.

Common mistakes

• Signing a sale instead of a gift — or the other way round
• Giving away property so the donor is left with nowhere to live
• Gifting without a co-owner's or spouse's consent

Will a template do?

A template is written for a general case and doesn't reflect your risks — often it lacks exactly the clause you'll need in a dispute. It's better to fit the contract to your deal. We draft the contract or review the other side's text before you sign.