Real Estate News Property donations: the most common mistakes and key points in the process - La Nacion Propiedades

[BuySellBA]

Property donations: the most common mistakes and key points in the process - La Nacion Propiedades




Source:

Donaciones de propiedades: los errores más comunes y los puntos clave en el trámite

Las donaciones se transformaron en una herramienta que muchas personas utilizan para ordenar su patrimonio; algunos aspectos no deben pasarse por alto al momento de realizar este trámite.

www.lanacion.com.ar

April 06, 2025


Donations have become a tool many people use to organize their assets; some aspects shouldn't be overlooked when completing this process.

Donations have become a tool that many people use to organize their assets.Shutterstock



After a period of growth following the legislative amendment in December 2020, a regulatory framework was created that allowed donations to become an effective tool . The numbers have increased since then and remained on the rise until approximately 2023. In 2021, there were more than 11,000; in 2022, more than 12,000; and in 2023, almost 10,500. Meanwhile, in 2024, around 8,500 were registered, reflecting a flattening curve.

The Notaries Association of the City of Buenos Aires maintains that the reasons for this increase in these types of procedures reflect a cultural phenomenon. "People began to realize that by donating certain assets, they can anticipate certain situations that tend to become complicated or delayed in the context of a probate process ," they explained.



It's worth noting that these weren't as common previously, especially between 2015 and 2020, due to observability. This meant that donating a property represented a potential conflict for the parties because the title to the property was observable for 10 years. For example, an unrecognized child could appear and demand their share of the property . For this reason, during those years, the number dropped dramatically, with no more than 3,000 or 4,000 per year.



However, under the new legislation, if the person who received the donation sold the property, the current owner cannot be sued . It's worth noting that if the person who received the donation received more than they were entitled to, they are allowed to respond with the equivalent monetary value.

Donation of properties Javier Joaquin

The most common mistakes​

According to the Buenos Aires Notaries Association, donating is transferring something free of charge, without expecting anything in return, with the aim of benefiting someone, who may be an heir: a child, a third party, or even a public entity. "It often also involves organizing the family estate, before the death of the donor, or of the owner of the property," they indicate.



Regarding the delay involved in the donation process, the registration process is similar to a deed of sale. In principle, it must be registered in a property registry, and the simple process takes approximately 30 to 45 days, depending on the jurisdiction. Generally, if it involves a functional unit, it's faster; if it involves a property, plot of land, or house, there are other procedures that take a little longer.

Donating a property often involves organizing the family assets a bit, before the death of the property owner.Javier Joaquin

What to keep in mind when donating​

• Donations impact assets: This is the first thing to keep in mind, according to the Notaries Association, both for the donor, who is the transferor, and for the donee, who is the recipient. "A property, a piece of personal property (a car), a bank account, or bonds or stocks, has an asset impact. This means that an asset enters the donee's assets and is now recorded. If tax or fiscal issues were not taken into account, they will probably have to start paying personal property taxes," the institution states. However, they clarify that one alternative to avoid this is for the donor to donate and reserve the usufruct, because the usufructuary, that is, the person who has the enjoyment and use of the property, is the one who must declare it.
• Can a donation be limited or conditional? Yes, the donor may establish clauses or conditions that, in some way, limit the donee's right to dispose of the received asset—whether by selling, re-donating, granting usufruct, among others. The donation may be outright or subject to a charge or condition. This means that the person who receives and accepts the donation is obligated to fulfill the charge: it may be the completion of a project or a benefit for a third party. It may also be the case that the donee refuses to accept the donation in order to avoid fulfilling the charge.
• Can donations be revoked? Yes, donations can be revoked. These can be rendered void, even if the possibility of reversal (voluntary revocation) is specifically reserved in the donation instrument: once such an event occurs, the donor can reverse it at any time. There are also legal grounds that arise when the donee harms, injures, or threatens the life of the donor. In all cases, it is necessary to resort to justice to invoke these grounds, which the law calls "grounds of ingratitude." The judge must then decide on their admissibility and effects.
• What portion can be freely donated? A person can donate, without any restrictions, whatever they want to whomever they want. However, this does not imply that the heirs can later sue for compensation of values because the donation exceeded the legitimate portion. This is possible when there are forced heirs, such as children, because the portion available for donation, without any type of claim, is one-third of the estate.
• Is it possible to donate property to a minor? This procedure is possible, of course. It can be donated to minors, but their legal representatives must accept the act of donation.
• Can a property received as a gift be sold? Regarding this question, Bernardo Mihura de Estrada, former secretary of the Notaries Association and current director general of the Real Estate Registry of the Federal Capital, warns that currently, the doctrine is unanimous in holding that if the property was gifted to the children, there is no problem in selling it whenever they wish. "If the parents are alive, with their signature—they have the usufruct—and if they have passed away, there is no time limit for carrying out the transaction," he points out.
• Is the tax impact the same everywhere? In some jurisdictions, such as the Province of Buenos Aires, gratuitous acts, such as donations, have a tax impact on the act itself; that is, they must be paid with what would be the tax on the gratuitous transfer of assets. This tax must be paid if the property is located in the Province or if the recipients have a real address in that jurisdiction.

www.buysellba.com