Property Gift Agreement 2026

Although in everyday terms a gift is a gesture, from a legal perspective it is a complex process governed by strict rules, especially when it comes to a property gift agreement. Since property gift agreements are concluded primarily between relatives, within the family, this article pays particular attention to these cases of gifting real estate.

What are the minimum requirements of a property gift agreement?

A property gift agreement is a bilateral legal transaction under which the donor transfers ownership of real estate he or she owns (for example, a flat, house or plot of land) to the donee free of charge. The word “free of charge” is key: the donor receives no consideration whatsoever in exchange for the ownership.

What are the obligations of the contracting parties when gifting real estate?

• The donor is obliged to transfer ownership and possession of the property to the donee.
• The parties are required to make their contractual declarations in writing. Failing this, the agreement is invalid.

When is no property gift agreement concluded?

• If the parties discuss the minimum requirements listed above but do not put their declarations in writing.
• If the parties set out the terms that must be recorded in writing to each other by email, this qualifies as a written declaration only if certain special conditions are met.
• If the parties do write down their agreement, but it does not clearly show the intention to gift the property, or the property cannot be identified.

Is a gift agreement sufficient to acquire ownership of real estate?

For someone to acquire ownership of real estate, in addition to concluding the agreement, registration in the real estate register is also required. Without registration in the real estate register (ingatlan-nyilvántartás), the property gift agreement alone is not sufficient to acquire ownership of the property.

Is it enough for the parties to conclude a valid gift agreement for ownership to be registered in the real estate register?

Above we described the features of a valid property gift agreement. Surprising as it may be, however, the validity of the agreement alone does not guarantee registration of ownership. The Act on the Real Estate Register imposes a number of further requirements on the gift agreement in addition to the minimum requirements for validity. If these are not met, even though the parties have a valid agreement to gift the property, the donee cannot acquire ownership, because ownership passes only upon registration in the real estate register.

What features must a property gift agreement have to be registered in the real estate register?

As perhaps everyone has heard, a property gift agreement must be countersigned by an attorney or executed as a notarial deed.

The gift agreement must contain:

• the details of the contracting parties as listed by law;
• the capacity in which each party is acting (donor, donee, usufructuary, etc.)
• the municipality and the topographical lot number;
• the parties’ declaration of citizenship;
• the parties’ declaration of the market value;
• the donee’s declaration accepting the gift.
• the so-called “registration consent”, under which the donor unconditionally and irrevocably consents to the registration of the donee’s ownership in the real estate register;

What is the process of gifting real estate?

The process of gifting real estate can be summarised in the following basic steps.

1. In any real estate transaction, the first step is to retain an attorney experienced in real estate law.
2. Identifying the property.
3. Title deed (property sheet) retrieval and, if necessary, requesting a copy of the cadastral map.
4. Agreement between the donor and the donee on the terms of the gift.
5. Review of the property and the agreement by the attorney.
6. Preparation of the gift agreement and its annexes by the attorney.
7. Signing of the gift agreement and its countersignature by an attorney.
8. Submission of the application to the real estate register and payment of the HUF 10,600 land registry administrative fee.
9. The land registry office registers the donee’s ownership within a 60-day procedural time limit and sends its decision to the parties.

Is an energy performance certificate required for gifting real estate?

Many people do not know this, but when ownership of real estate is transferred by a gift agreement, as a general rule no energy performance certificate needs to be obtained, because the government decree links this obligation to transfers for consideration.

Having an energy performance certificate prepared is not mandatory for a gift, but it can be useful on a voluntary basis. It allows the donee to learn about the energy consumption of the building, house or flat. The energy performance certificate can help the donee assess the property’s running costs and any need for modernisation (e.g. insulation, replacement of the heating system), which may influence whether he or she accepts the gift.

Is duty payable on a gift?

One of the most frequent questions about gifts is the obligation to pay duty. Although gifts are subject to duty as a general rule, fortunately in the most common life situations the donee enjoys an exemption from duty.

When is a gift exempt from duty? No gift duty is payable if the gift is made between the following persons:

• Lineal relatives: Gifts between parents, grandparents, great-grandparents and their children, grandchildren, great-grandchildren (including family relationships based on adoption).
• Spouses: Gifts between husband and wife.
• Registered partners: Gifts between persons living in a registered partnership.
• Siblings: Gifts between full siblings, half-siblings and persons in a sibling relationship based on adoption.

How must the family relationship giving rise to the duty exemption be proven to the Tax Authority (NAV) and the land registry office?

The answer is very simple. It does not have to be proven. Only circumstances expressly required by law must be proven to the authorities. The new Act on the Real Estate Register (Act C of 2021) precisely defines the documents that must be attached for the registration of ownership. These do not include any document proving the family relationship on which the duty relief is based. In view of this, the land registry office may not demand such a document from the donee; the NAV may, if necessary, request data or proof in the duty procedure.

How much is the gift duty if it has to be paid?

If the donee does not fall within the exempt group (e.g. a cousin or a friend), the rate of duty is as follows, based on the market value of the property:

• For residential property and related property rights: 9%
• For all other real estate: 18%

What is the market value of the gifted property?

To obtain the amount of the duty, the market value of the property must be multiplied by the gift duty percentage. The market value is the property’s value on the market. It is essentially the amount for which a buyer could be found for a flat.

But who determines the market value? When assessing the duty, the NAV relies primarily on the parties’ declaration.

As a general rule, the tax authority assesses the duty on the market value stated in the property gift agreement and on the B400 form by the acquiring donee.

The tax authority has a detailed database of property market values. If the NAV detects a significant difference between the donee’s declaration and its own data, it generally determines a market value corrected relative to the donee’s declaration, following an on-site inspection. In this case, the duty is naturally assessed on this corrected market value.

What are the personal income tax rules if the property received as a gift is sold?

It often happens that the donee wishes to sell the property after some time. The sale is subject to 15% personal income tax (SZJA). Personal income tax, as its name suggests, must be paid on the income earned from the sale.

From the second year after acquiring the property, the rate of personal income tax decreases gradually, and from the fifth year the donee selling the property no longer has to pay personal income tax, regardless of the price for which the property was sold.

Gradual reduction of the personal income tax base

15% personal income tax is payable on the income from the sale of real estate (the difference between the sale price and the acquisition value plus related costs). However, under the Personal Income Tax Act, the amount of income forming the tax base decreases over time.

The rules treat the year of acquisition as year zero. In the years following acquisition, the tax base develops as shown in the table below:

Practical example of calculating personal income tax

Suppose you received a property as a gift in 2021 and your income from the sale is 10 million forints. Let us see how the tax payable would develop if you sold the property in different years:

• Year of acquisition: 2021 (this is year 0)
• If the sale takes place in 2022 (year 1):
• Tax base: HUF 10,000,000 (100% of the income)
• Personal income tax payable: HUF 10,000,000 * 15% = HUF 1,500,000
• If the sale takes place in 2023 (year 2):
• Tax base: HUF 10,000,000 * 90% = HUF 9,000,000
• Personal income tax payable: HUF 9,000,000 * 15% = HUF 1,350,000
• If the sale takes place in 2024 (year 3):
• Tax base: HUF 10,000,000 * 60% = HUF 6,000,000
• Personal income tax payable: HUF 6,000,000 * 15% = HUF 900,000
• If the sale takes place in 2025 (year 4):
• Tax base: HUF 10,000,000 * 30% = HUF 3,000,000
• Personal income tax payable: HUF 3,000,000 * 15% = HUF 450,000
• If the sale takes place in 2026 (year 5) or later:
• Tax base: HUF 10,000,000 * 0% = HUF 0
• Personal income tax payable: HUF 0

As you can see, each additional year of waiting before selling can result in significant tax savings, and from the 5th year after acquisition the income from the sale becomes completely tax-free.

Personal income tax question – What is the documented acquisition cost on sale if the seller received the property as a gift?

As mentioned, when a property received as a gift is sold, the tax base (income) is not the full sale price but the difference between the sale price and the deductible costs. For gift agreements, as a general rule, the market value stated in the gift agreement can be deducted as the cost of acquiring the property. Thus, to determine the tax base, the market value must be subtracted from the sale price. This amount will form the tax base (if there are no other deductible costs).

Personal income tax question – What is the documented acquisition cost if the seller received the property as a duty-exempt gift?

For duty-exempt gifts within the family, the law sets a special rule for the acquisition cost that may be deducted when the gifted property is sold. Here it is not possible to use the market value stated at the time in the gift agreement as the basis of the calculation. In this case, the law sets the deductible costs at 75% of the sale price. This is a flat-rate amount. Regardless of the property’s market value in the gift agreement and of any further actual costs incurred by the donee selling the property, the donee is not entitled to deduct any further costs on the sale.

This means that after reducing the sale price by 75%, 25% of the sale price will form the tax base. This amount can then be reduced further depending on the year after acquisition in which the sale takes place. 15% of the resulting value will be the amount of personal income tax payable.

Can a gift be reclaimed?

Although it is rare, the Civil Code (Act V of 2013) allows the gift to be reclaimed in strictly defined cases. These are the following:

1. Threat to subsistence: If the donor’s circumstances deteriorate after the gift to such an extent that he or she needs the property for subsistence, he or she may reclaim it. An important condition is that this must not endanger the donee’s own subsistence.
2. Serious wrongdoing: If the donee or a relative living with the donee commits a serious criminal offence or wrongdoing against the donor or the donor’s close relative (e.g. breach of a statutory maintenance obligation).
3. Failure of an underlying assumption: If the gift was based on an essential assumption known to both parties (e.g. the parties’ cohabiting relationship), without which the gift would not have been made, and this assumption later fails permanently.

If the donor forgives the wrongdoing, this counts as a waiver of the right to reclaim. The gift cannot be reclaimed if, at the time of reclaiming, the gift no longer exists, provided that no asset that replaced the gift exists either.

What should be done if the donee is a minor?

It is common for parents or grandparents to give property to their minor children or grandchildren. The good news is that guardianship authority approval is not required for this if, at the same time as making the gratuitous transfer, the donor reserves a usufruct (haszonélvezeti jog) over the property for himself or herself. This simplifies the procedure considerably. The agreement is signed on behalf of the minor by the legal representatives (typically the parents).

The bad news, which many people do not consider when embarking on such a transaction, is that parents entitled to act as legal representatives may exercise their right of representation only jointly. So the signature of only one parent is not enough. Yet in the most typical cases the donor is one of the parents, who in this case is not entitled to represent the child because of the conflict of interest.

In such cases, the appointment of an ad hoc guardian must be requested from the guardianship authority to replace the parent affected by the conflict of interest. Even though the agreement itself does not require guardianship approval, the appointment of an ad hoc guardian will make the process at least as cumbersome.

What should you watch out for if a usufruct is created or reserved in a property gift agreement?

In many cases, clients ask us to create a usufruct in the property gift agreement in favour of the donor or a third party. The reasoning behind this is usually that the donor would like to retain some degree of control over the property.

This approach carries serious risks if someone is not aware of the relationship between ownership and usufruct. Our clients usually have some vague notion about this: “Counsel, as I understand it, it will be good for me to reserve my usufruct, because usufruct is stronger than ownership“

Well, in this form, that statement is extremely misleading. What is usufruct, really? To answer this, we must first explore the legal nature of ownership. Ownership is made up of component rights, which are the following:

• possession
• use
• enjoyment of the benefits (exploitation)
• disposal

When the donor reserves the usufruct, he or she retains the first three component rights of ownership. The owner can exercise the rights to possess, use and exploit the property only to the extent that the usufructuary does not exercise these rights.

The donee should carefully consider whether to accept a gift encumbered by a usufruct. The donee can use such a property only to the extent that the usufructuary does not exercise this right. Thus the owner may at most enter the property, or where applicable hand over possession of it, with the usufructuary’s permission.