A Gift Deed is a legal document that records the transfer of property ownership from a donor to a donee, indicating that the transfer was made voluntarily without any exchange of money. Unlike a sales deed, no financial transaction occurs in the gifting process.
While it’s not mandatory for a donor to declare a gift in writing and it can be done orally, gift deeds for property transfers are executed to create a valid record.
It is crucial to register a gift deed to validate the transfer of ownership rights for immovable property.
In Pakistan, there is no standardized format for a gift deed. Generally, when someone bequeaths property to a loved one, the deed specifies that the gift was made voluntarily and without coercion. It also states that the donor is not bankrupt and will not reclaim the gift.
A gift deed in Pakistan must be signed by both the donor and the donee to be registered.
For gift deeds involving cash and prize bonds, the document usually mentions the total amount transferred and the mode of transfer (e.g., cash or check). If gifting jewelry, the type, weight, and current valuation should be mentioned.
When executing a gift deed for real estate, certain documents are required to prove ownership rights. Whether gifting land or a house to a relative, friend, or acquaintance, the following documents are needed:
How to Register a Gift Deed in Pakistan
To register a gift deed in Pakistan, the details must be documented on stamp paper with the names of the donor and donee. Although no monetary exchange is involved, the deed must be attested by at least two witnesses before being registered with the sub-registrar. For immovable properties, the title cannot be legally transferred to the recipient’s name unless the gift deed is registered and property tax is paid.
Tax on Gifted Property in Pakistan
Property transferred as a gift is subject to taxation under Capital Value Tax, determined by the overall value of the gift. However, properties gifted by parents, grandparents, siblings, spouses, or children are exempt from this taxation.
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