Gift Deed

A gift deed is the official document proving that ownership of a property has passed from a donor to a donee during the donor's lifetime and without consideration. It is issued after the gift is documented with the competent authority (a notary via the Najiz platform, or the Real Estate Registry in areas under registration). The Civil Transactions Law defines a gift as a contract by which the donor, during his lifetime, transfers ownership of property to the donee without consideration (Article 366). The key Saudi requirement is that a gift of real estate is only concluded when documented according to the statutory rules (Article 368), so an oral gift or an informal paper does not transfer ownership of property. The donor may impose an obligation on the donee; if he requires consideration, the contract becomes an exchange governed by the rules of sale. The donor does not warrant the property against defects or third-party claims unless he deliberately concealed them, and if the property is burdened by a mortgage securing a debt, the donee must pay that debt up to the property's value unless agreed otherwise. The costs of the gift and transfer fall on the donee unless agreed otherwise. Gifts have important tax and inheritance effects. A documented gift to a spouse or a relative up to the third degree is exempt from the 5% Real Estate Transaction Tax under its implementing regulation and conditions, while a gift to others may be taxable. Revocation is restricted: it is possible with the donee's consent, or by court order in defined cases such as a parent's gift to a child where there is justification, and it is barred if the donee has disposed of the property or made a significant attached improvement. A gift made during a terminal illness takes the legal treatment of a bequest.