Gifting an Apartment or House Within the Family: Lawyer Advises on What to Watch Out For and How to Avoid Legal and Tax Issues

JUDr. Jakub Dohnal, Ph.D., LL.M.
JUDr. Jakub Dohnal, Ph.D., LL.M.
20.4.2026 | ARROWS law firm

Gifting real estate within the family may seem like a simple decision: you sign the agreement and that’s it. In reality, it is a transaction accompanied by many legal and financial pitfalls. Official signature verification, tax implications, a mortgage on the property, the impact on social benefits – all of this will change and it could take you by surprise. This article will guide you through the most important points to avoid issues that many families end up dealing with in court and with the tax authorities in the Czech Republic.

In the image, we see a lawyer addressing the legal aspects of gifting real estate within the family.

Gifting real estate requires a written deed of gift with officially certified signatures. You also need to take into account the costs of signature certification and the administrative fee for registration in the Cadastral Register of Real Estate.

Between close relatives, income from a gift is exempt from income tax; however, there are follow-on tax obligations, such as real estate tax and potentially income tax on rental income or on a subsequent sale.

If there is a mortgage or a lien on the property, it cannot be transferred without the creditor’s consent. You risk immediate acceleration of the debt.

A gift may negatively affect the recipient’s entitlement to social benefits. It is also necessary to consider the link to inheritance law.

Without an expert assessment, you risk unintentionally creating future legal issues with costs many times higher to resolve.

Why gifting real estate differs from a standard purchase agreement

A gift is a legal act in which one person (the donor) transfers property to another person (the donee) free of charge, with the intention of permanently disposing of it. On paper it sounds simple, but the legal reality is more complex.

The key difference is that while in a purchase agreement both parties are commercially motivated and act on an equal footing, in a gift the law provides specific mechanisms to protect the donor, such as the possibility to revoke the gift. At the same time, a gift also contains elements that need to be addressed preventively—otherwise a good intention can turn into a legal problem.

In the Czech Republic, since 2014, gift tax has been abolished as a separate tax and gifts are assessed as income under Act No. 586/1992 Coll., on Income Taxes. As of 2026, the provision continues to apply that income from gifting between close relatives (spouse, partner, parents, children, grandparents, grandchildren, siblings) is exempt from income tax.

At first glance, that looks great—but be careful. The income tax exemption is only one piece of a larger puzzle. You also have fees for signature certification, the administrative fee for registration in the Cadastral Register of Real Estate, costs of property insurance that the bank may require, and of course all the legal and tax effects the owner may not have considered.

Legal formalities: the deed of gift and the Cadastral Register

Real estate cannot be gifted by an oral agreement or by signing a document without certification. The law requires a written deed of gift, and for registration of ownership in the Cadastral Register of Real Estate, officially certified signatures on that deed are also required. Signature certification is carried out by a notary or a municipal office (CzechPoint), not necessarily in the form of a full notarial deed.

Find out who the true owner of the property is. Obtain a current extract from the Cadastral Register of Real Estate, as it sometimes happens that a person assumes ownership, but someone else is recorded in the register, or there is a lien or other restriction.

The preparation of the deed of gift must include all requirements under the Civil Code. In particular, this includes precise identification of the donor and the donee, specification of the gifted property, and an unambiguous expression of intent to give and to accept the gift. It is recommended to have the agreement prepared by an attorney so that it is legally flawless.

Signatures on the deed of gift must be officially certified. This can be done by a notary or at a municipal office (e.g., CzechPoint). As of 2026, the fee for certifying one signature is typically CZK 30.

Together with the certified deed of gift, it is necessary to file an application for registration of ownership with the competent cadastral office.

As of 2026, the administrative fee for registration in the Cadastral Register is CZK 2,000 for each registration of ownership, for example for one property. Without registration in the Cadastral Register, ownership is not transferred.

If there is a lien or a mortgage on the property, the bank must consent. Very often it requires property insurance and may impose additional conditions.

If the deed of gift does not correctly state all required particulars, or if the formal requirements are not met, the agreement may be invalid or the registration in the Cadastral Register may be refused. This can lead to uncertainty of ownership and the need to resolve the situation in court.

Questions related to the deed of gift: 

1. Can we “agree” the gift between ourselves without officially certified signatures and just register it in the Cadastral Register?
No. A written deed of gift with officially certified signatures is always required to transfer ownership of real estate. Without them, registration in the Cadastral Register cannot be carried out. Attorneys from ARROWS, a Prague-based law firm, often handle disputes precisely because someone underestimated the formal requirements. It is better to ensure they are met. Contact office@arws.cz.

2. What if the donor later changes their mind and wants to cancel the gift?
In certain cases, a gift can be revoked—for example, if the donee failed to provide the donor with necessary maintenance in need (revocation of a gift due to need), or if the donee behaves towards the donor or the donor’s close persons in a grossly offensive manner or contrary to good morals (revocation of a gift for ingratitude). However, without legal advice you cannot resolve this on your own. The Czech legal team at ARROWS can help you assess the grounds and find a way to revoke the gift if applicable.

3. How much does the gift actually cost in total?
Typically: legal fees (preparation of the agreement) as agreed with the attorney (usually thousands to tens of thousands of CZK), fees for signature certification (typically tens to hundreds of CZK), the administrative fee for registration in the Cadastral Register (CZK 2,000), and potentially the cost of property insurance. Total costs vary depending on the complexity of the case and the value of the property. ARROWS’ Prague-based attorneys will go through all items with you and provide a cost estimate. Write to office@arws.cz.

Tax aspects of gifting real estate

As mentioned above, as of 2026, income from gifting real estate between close relatives (spouse, partner, parents, children, grandparents, grandchildren, siblings) is exempt from personal income tax under Section 4a of the Income Taxes Act. It may seem that you have a clear path. But be careful—the income tax exemption does not mean there are no other tax obligations at all.

What changed in the past

Gift tax as a standalone tax was abolished as of 1 January 2014. Since then, gifts have been assessed as income under the Income Taxes Act. The original exemption for relatives in the direct and indirect line was gradually expanded and, as of 2026, includes the closest family circle. Real Estate Acquisition Tax was abolished with effect from 26 September 2020, including retroactively for transfers where the entry in the Cadastral Register was made from 1 December 2019. Therefore, this tax is no longer payable.

What tax obligations remain?

The donee becomes the owner of the property and is obliged to pay the annual Real Estate Tax (tax on immovable property), previously referred to as property tax. The tax return must be filed by 31 January of the year following the registration of ownership in the Cadastral Register. The amount of tax varies depending on the type of property and its location.

If the donee later rents out the property, they must report rental income and pay personal income tax. This income is taxed at a rate of 15% up to a certain level of annual income, or 23%.

If the donee sells the gifted property before the statutory time limit has elapsed, for example 10 years from acquisition of ownership, or 5 years from acquisition of ownership if they lived in the property, the proceeds from the sale will be taxable income.

Social security and health insurance benefits are not strictly taxes, but they can have significant financial impacts. If the donee receives, for example, a housing allowance and the gifted property increases their assets above a certain threshold, they may lose entitlement to certain social benefits that are tied to the applicant’s assets.

Practical example: A parent gifts an apartment to their daughter. The daughter does not have to tax the income from the gift, but:

She must make sure to file the real estate tax return.

If she rents out the apartment, she must report the income and pay income tax on rental income.

If the apartment increases her income or assets above the limit for social benefits, she may lose support.

Without legal advice, a family may be surprised by what tax and financial obligations actually await them, even though it seemed that the gift was tax-free.

Questions related to tax obligations: 

1. Do I really not have to pay gift tax when I give an apartment to my daughter?
Yes, income from gifting real estate between parents and children is exempt from personal income tax in the Czech Republic. However, that does not mean there are no other tax implications. Proceed with a lawyer who will go through all tax obligations specific to your situation with you, such as real estate tax and, where applicable, income tax on rental income or on a sale. ARROWS advokátní kancelář will be happy to advise you—write to office@arws.cz.

2. I am a pensioner and my son is gifting me an apartment. Will I lose entitlement to benefits?
It depends on which benefits you receive and the value of the property. Some social benefits are tied to the applicant’s assets. A gifted property is included in the assets test. If you own it, it may affect your entitlement to a housing allowance or other social benefits. First, find out where you stand. The attorneys at ARROWS can help you calculate all consequences before signing the gift agreement.

3. What if I rent out the apartment—what tax can I expect?
You must report rental income and pay personal income tax at a rate of 15% or 23% depending on your total income. At the same time, you can claim expenses related to the rental, such as depreciation, mortgage interest, repairs, insurance, and property management. This is not part of the gifting itself, but it is a tax reality you must not underestimate. The attorneys at ARROWS will help you optimize your tax position. Contact office@arws.cz.

Mortgage and other liens: what must be clarified

If there is a mortgage, an instalment, or any other lien on the property, such as security for a loan, you cannot simply gift it without the creditor’s consent.

The bank or other creditor has the right to know who owns the encumbered property and what will happen to it. If there is a change of owner without their consent, in theory they could demand immediate repayment of the entire remaining debt—this is called acceleration of the debt. In practice, this approach is common among banks.

What you need to do

Contact the bank and request its consent to the change of owner of the mortgaged property. The bank usually charges a fee for processing the request and issuing consent, for example CZK 500–2,000.

The bank will likely require the property to be properly insured against damage. Premiums vary, but are typically in the thousands of Czech crowns per year.

Some provisions of the mortgage agreement or the pledge agreement must be rewritten or amended so that the creditor knows who now owns the property.

It is important to realize that the mortgage debt primarily remains with the original debtor, the donor, unless the bank agrees with the donee on an assumption of the debt or a novation of the agreement. However, the lien on the property remains in place.

If you do not clarify the terms with the bank before you sign the gift agreement, you may end up in a situation where the bank accelerates the entire debt and the property may be forcibly sold at auction. Then the gift fails and, instead of a good intention, chaos arises.

Questions related to the mortgage: 

1. Can I gift an apartment to my son if I am still repaying the mortgage on it?
Formally yes, but only with the bank’s express written consent. Without consent, you risk the bank accelerating the entire debt at once. In other words: talk to the bank first, then plan the gift. The attorneys at ARROWS will help you negotiate this and secure it legally. Write to office@arws.cz.

2. What happens to the mortgage after the gift?The bank’s lien remains on the property. The donee becomes the owner of the property, but the mortgage debt primarily remains with the original debtor, the donor, unless the donee assumes the debt with the bank’s consent. The bank will continue to collect instalments from the original debtor, but in the event of non-payment it may satisfy its claim from the sale of the encumbered property, which is already owned by the donee. Without legal support, it is easy to get lost in this.

3. What if I have a loan on the apartment from my mother and I do not want to owe it?
In such a situation, it is possible to agree with your mother that the gifting of the property is linked to forgiveness of the existing debt. This debt forgiveness agreement must be expressly agreed and ideally incorporated into the gift agreement or into a separate agreement so that it is legally binding. The attorneys at ARROWS will help you secure this and draft it correctly.

The impact of gifting on inheritance law and family relationships

Gifting real estate is not only a legal transaction—it is also an emotional and family decision that can have implications for inheritance law and for relationships among other children or family members.

How a gift is counted in an inheritance

In the Czech Republic, there is a legal concept of bringing a gift into account against an inheritance share or against the compulsory portion. If a parent gifts an apartment to one daughter and later dies, the other heirs, such as the donor’s other children, may demand that the donor’s gift be brought into account against the gifted daughter’s inheritance share. This reduces her share of the inheritance to ensure a fairer distribution among the heirs.

The Czech Civil Code sets out rules for such set-off, which is carried out either on the basis of the testator’s explicit declaration of intent—ideally in a will or in a deed of gift—or under statutory conditions. Without a proper legal solution, this is often dealt with through the courts and leaves lasting rifts within the family.

Prevention

Clearly define in the deed of gift whether the gift is to be set off against the donee’s inheritance share, or whether it is a gift without set-off that will have no impact on future inheritance.

Clarify this with an attorney or a notary—these professionals can address all relevant issues when preparing the deed of gift and incorporate them into the agreement so that it is legally clear and binding later on.

If you know you have more children and you gift real estate to one of them, inform the others how this situation will be handled in the context of future inheritance. This can reduce the risk of future conflicts.

If you do not clarify this in advance, it may happen that after the donor’s death the heirs will litigate over how much each person should have received. Legal resolution of such disputes is far more expensive and painful than prevention.

Risks and common mistakes

Possible issues

How ARROWS helps (office@arws.cz)

Lack of awareness of tax obligations : The donee did not realize the real estate tax, income tax on rental income, or the impact on social benefits.

ARROWS attorneys will go through all tax and social-security implications of the gift with you before you sign the agreement. We will provide a tailored legal opinion.

Mortgage without the bank’s consent : The bank accelerates the debt and the property goes to auction.

ARROWS attorneys will negotiate with the bank, secure written consent, and adjust the terms. We will ensure the gift transfer proceeds without the risk of debt acceleration.

Unclear relationships between the donor and the donee : After the gift, the family argues about who should have received what in the context of inheritance.

ARROWS attorneys will help clearly define the terms regarding set-off of the gift against the inheritance share directly in the deed of gift. They can also assist with mediation and prevention of family conflicts.

Revocation of a gift without legal grounds : The donor wants the gift back but has no statutory reason; a dispute arises.

ARROWS attorneys will analyze whether there is a statutory ground for revoking the gift, such as ingratitude or the donor’s hardship, and will assist you in court proceedings if necessary.

Loss of social benefits : The donee, a pensioner, did not realize that the gifted property would deprive them of entitlement to a housing allowance or other benefits.

ARROWS attorneys will explain the impact on social benefits before the gift is made. They will help you find alternatives, such as a conditional gift or using the legal concept of a residential easement.

Invalid deed of gift : The agreement is not in writing, signatures are not officially certified, or key elements are missing. The cadastral registration is rejected and the transfer of ownership does not take place.

ARROWS attorneys will prepare a legally sound deed of gift that meets all statutory requirements, including proper identification of the property and precise drafting of all provisions.

How to avoid the most common mistakes

The biggest mistake individuals and families make is underestimating legal support. They think gifting is simple and that they can save money by handling it without an attorney. It then comes back to haunt them—when they end up in court proceedings, tax proceedings, or a banking issue.

The second mistake: They do not calculate the impacts in advance. They never clarify how it will affect taxes, social benefits, inheritance, or relationships with the rest of the family. Only after the gift do surprises come—and then it is too late.

The third mistake: Silence with the bank and forgetting about insurance. Then mortgage repayment becomes a nightmare.

Book a legal consultation before you sign anything. ARROWS attorneys will review your situation within a few hours, point out risks, and propose solutions.

Communicate with the bank if there is a mortgage on the property. Secure written consent.

Clarify the tax and social-security implications. This will save you thousands of Czech crowns and a lot of stress.

Plan everything in detail and devote time to it. A gift transfer should not be rushed—it is a long-term decision with lasting effects.

Final summary

Gifting real estate within the family is not just about signing a piece of paper and everyone being happy. It is a complex legal and financial decision that can affect your tax burden, entitlement to social benefits, your relationship with the bank, and even later inheritance and family relationships.

Without legal advice, you risk ending up in a confusing situation—where you will not be able to handle it on your own and will then have to resolve problems through the courts or the tax authority, which is many times more expensive and painful than prevention.

Attorneys from ARROWS, a Prague-based law firm, will guide you through the entire process: from verifying the legal status of the property, through negotiations with the bank, to preparing the deed of gift and addressing all tax and social aspects. You will have peace of mind and confidence that you have handled the matter correctly.

If you want the gift transfer not to worry you and for everything to proceed smoothly without surprises, contact the attorneys from ARROWS, a Prague-based law firm, at office@arws.cz. They will help you.

FAQ

1. What does gifting cost? How much does a notary charge?

A notary will charge a fee for official certification of signatures (around CZK 30 per signature). If you need a notarial deed as a public instrument, the notary’s fee depends on the value of the property (e.g., 0.5% for a value up to CZK 1 million, plus VAT), which can amount to thousands to tens of thousands of Czech crowns. In addition, there is an administrative fee for registration in the Cadastral Register (CZK 2,000) and any other potential costs (legal services, insurance, a bank fee). Overall, expect total costs that may range from CZK 5,000 to higher tens of thousands of Czech crowns, depending on complexity and the chosen approach. ARROWS attorneys will first clarify the exact budget with you—write to office@arws.cz.

2. How long does the gifting process take?

From preparing the deed of gift and arranging certified signatures to the final registration in the Cadastral Register, it typically takes 2–4 weeks. If there is a mortgage on the property and you need to negotiate the bank’s consent, add another 1–2 weeks. If everything is more complex (multiple creditors, non-standard arrangements), it may take 1–2 months. ARROWS attorneys will help speed up the process and organize it smoothly.

3. What if I later rent out the gifted property—what are my obligations?

You must declare rental income and pay personal income tax. At the same time, you can claim expenses (depreciation of the property, repairs, insurance, maintenance). There are also social-security and health-insurance obligations if rental income would be your only or main income. ARROWS attorneys will go through all of this with you. Contact office@arws.cz.

4. Can I get the gift back later if I change my mind?

A gift can be revoked only under conditions set by law – for example, if the donee failed to provide the donor with necessary maintenance in a situation of need (revocation of a gift due to need) or if the donee behaves in a grossly offensive manner towards the donor or the donor’s close relatives, or otherwise acts contrary to good morals (revocation of a gift due to ingratitude). Without these legal grounds, you cannot demand the gift back – it would end up in court proceedings. The attorneys at ARROWS can help you assess whether you have legal grounds and will represent you in any dispute. Write to office@arws.cz.

5. How is a gift counted towards an inheritance – do the other children have to “offset” it?

This must be clearly defined in the gift agreement or in a will. The Czech Civil Code allows set-off against an inheritance share or against the compulsory portion. If the gift is to be set off, the donee’s inheritance share will be reduced accordingly. Without this clear definition, the other heirs may later complain that they are being disadvantaged. The attorneys at ARROWS can help you clarify this and secure it legally. Contact office@arws.cz.

6. Will I lose entitlement to social benefits if I accept a gifted property?

It depends on the type of benefits and the value of the property. Some social benefits are linked to your assets – if the value of the gifted property exceeds the prescribed limit, you may lose entitlement to a housing allowance or other benefits. First, verify your rights with the social welfare office and then consult an attorney. The attorneys at ARROWS can help you calculate all consequences before the gift is made and propose alternatives. Contact office@arws.cz.

Notice

Notice: The information contained in this article is of a general informational nature only and is intended for basic orientation in the matter, reflecting the legal situation as of 2026. Although we strive for maximum accuracy, legal regulations and their interpretation evolve over time. We are ARROWS, a Prague-based law firm registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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