Real estate donation agreement – peculiarities

Many questions arise in practical activity regarding: the procedures for drawing up the Donation Agreement, taxation (when a military levy and tax arise, and in what cases it does not arise), the approximate cost of concluding a Real Estate Donation Agreement with a notary. In this article, we tried to highlight all the main points and wishes of our clients and tell in detail about the procedure for concluding the Donation Agreement, taxation and pricing policy.

The donation agreement is concluded in writing and is subject to notarization. Since January 2013, after certification of the contract and state registration, the Donee no longer needs to contact the Bureau of Technical Inventory (BTY). After concluding the transaction, he receives a notarized contract and an extract from the state register of property rights, which confirms the entry of the Donee’s ownership in the electronic register (Ukrstate Register database).

It should draw the attention of owners who intend to donate their property to the fact that from the moment of concluding the Donation Agreement, the Donor becomes the owner of the property donated under the agreement. From this moment on, the Donor can dispose of this property (apartment, house, land, etc.) at his discretion, namely: sell, gift, exchange, bequeath, write off the owner and evict him from the home, register other persons, etc.

If the property that the owner wants to donate was acquired during marriage and is the joint joint property of the spouses, the second spouse’s consent to the donation of the property is required to conclude this contract. In this consent, it is necessary to indicate the surname, name and patronymic, the date of birth of the Donor, the property (address, characteristics of the property, etc.) that will be donated, information about the marriage, which confirms the fact that the property is in the common joint ownership of the spouses.

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The donee does not need the consent of the second spouse to receive property as a Gift. This is due to the fact that the property received as a gift or by way of inheritance is the personal property of the person who received such property, and in the event of a divorce, the property received as a gift or received in the process of re-registration of the inheritance will not be subject to division between the spouses.

Donation between children and parents and donation between spouses

In this blog, we have highlighted the gift between children and parents and the gift between spouses separately, since taxes (=5%) and military service (=1.5%) do not arise when concluding an Agreement between these persons. These categories of persons are mutually recognized as relatives of the 1st degree. To confirm this fact :

• when donating real estate between spouses — the donee must provide a marriage certificate
• when donating between children and parents – the Donee must provide a birth certificate (marriage certificate, divorce certificate or court decision, in case there was a change of surname due to marriage, or two or more marriage registrations were concluded by this person).

Since a gift between children and parents and a gift between spouses is not subject to tax (=5%) and military levy (=1.5%) and is by its nature free of charge, therefore, it is necessary to submit an income declaration it is not necessary regarding this property.

Although in this case there is no tax (=5%) and military collection (=1.5%), but the price of this contract will be 1% of the state duty (of the estimated value of the property or part that is donated) and the services of a notary 4000 UAH. Payment can be made by the Donee, the Donor or equally.

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