A Texas gift deed transfers real property from one person to another with no money changing hands, usually between family members. It works like any other deed of conveyance under Texas Property Code Section 5.021, which requires every conveyance of real property to be in writing and signed by the person transferring it.1State of Texas. Texas Code Property Code 5.021 – Instrument of Conveyance Preparing one correctly means more than filling out a form. It means understanding the signature rules, the recording steps, and the tax and mortgage consequences that follow the transfer.
What the Deed Must Contain
Texas recognizes five requirements for a valid deed: it must be in writing, signed by the grantor, name the grantee, include a legal description of the property, and be delivered to and accepted by the grantee.2Texas Real Estate Research Center. Deeds and the Texas Recording Statutes Both the grantor (the giver) and the grantee (the receiver) need their full legal names and current addresses on the document, matching government-issued identification.
The legal description is where people most often go wrong. A street address is not enough. You need the formal description that fixes the exact boundaries, either a metes and bounds survey or a lot and block reference to a recorded subdivision plat.3Texas Law Help. Property Deed Basics Pull it word-for-word from the most recent recorded deed for the property, or get it from the county appraisal district. Even a small transcription error can create title problems later.
When Both Spouses Have to Sign
Texas is a community property state. Property acquired during a marriage generally belongs to both spouses regardless of whose name sits on the deed. If the property is the homestead, Texas law goes further: neither spouse can sell, convey, or encumber the homestead without the other spouse joining in the deed.4State of Texas. Texas Family Code 5.001 A gift deed signed by only one spouse on a homestead property can be void.
Even for non-homestead property, gifting community property without both signatures creates a cloud on title that can surface years later. If you are married, have both spouses sign regardless of how the property is titled. The clean exception is separate property: real estate one spouse owned before the marriage or received individually as a gift or inheritance.
Picking the Right Form of Deed
A gift deed is not its own legal form. It is a standard deed of conveyance that identifies the transfer as a gift rather than a sale. Most people choose between a general warranty deed and a special warranty deed.
A general warranty deed gives the grantee the strongest protection. The grantor guarantees that title is clear going back through the entire chain of ownership and agrees to defend the grantee against claims. A special warranty deed is narrower: the grantor only guarantees against defects that arose during the grantor’s own ownership. Texas Property Code Section 5.022 provides a statutory form for a general warranty deed and also confirms that a covenant of warranty is not required in a conveyance.5State of Texas. Texas Property Code 5.022 You could convey property with no warranty at all, though most family gift deeds use one of the two warranty forms.
Gift Language and the Three Legal Elements
Gift deeds have traditionally used the phrase “for and in consideration of love and affection” in the consideration section to explain why the property is moving without payment. That language is customary, but Texas courts do not actually require consideration for a valid deed. Stating that the property is conveyed “as a gift” is legally sufficient on its own.1State of Texas. Texas Code Property Code 5.021 – Instrument of Conveyance Either phrasing works. Using recognizable gift language helps distinguish the transaction from a sale if questions come up later.
Three elements have to be present when the transfer happens. The grantor must have genuine donative intent, meaning they truly intend to give the property away for nothing. The deed must be delivered, which under Texas law means the grantor relinquishes all control over the deed with the intent for it to take effect immediately, not simply handing over a piece of paper. And the grantee must accept it. Acceptance is usually presumed when the gift benefits the grantee, but an outright rejection would void the transfer.
Signing, Notarizing, and Recording
Texas gives you two ways to make a deed eligible for recording. The grantor can sign before a notary public, or sign before two or more credible subscribing witnesses.6State of Texas. Texas Code Property Code 12.001 – Instruments Most people use a notary because it is simpler and more widely accepted. A Texas notary can charge up to $10 for the first signature and $1 for each additional one.7State of Texas. Texas Government Code 406.024
Once signed and acknowledged, take the deed to the county clerk’s office in the county where the property is located.3Texas Law Help. Property Deed Basics Anyone presenting a deed in person must show photo identification. The statutory base recording fee is $5 for the first page and $4 for each additional page, though county surcharges typically push the real total to around $25 for the first page.8State of Texas. Texas Local Government Code 118.011 The clerk enters the deed into the official public records and mails the original back to the grantee after processing.
Why Recording Protects You
Recording is not technically required for the deed to be valid between the grantor and grantee. But an unrecorded deed is void against any later buyer who pays value for the property without knowing about the gift transfer.9State of Texas. Texas Code Property Code 13.001 – Validity of Unrecorded Instrument If a grantee never records, the grantor could sell that same property to someone else and the buyer, having no notice, would have a valid claim. Recording puts the world on notice that ownership has changed.
Federal Gift Tax Filing
Giving away real property counts as a gift for federal tax purposes, and the value of land or a home will almost certainly exceed the annual gift tax exclusion. For 2026, an individual can give up to $19,000 per recipient per year with no gift tax consequences.10Internal Revenue Service. Gifts and Inheritances Married couples who elect to split gifts can double that to $38,000 per recipient. When the property’s fair market value is above those thresholds, the grantor must file IRS Form 709, a federal gift tax return, for the year of the transfer.11Internal Revenue Service. Instructions for Form 709
Filing Form 709 does not necessarily mean tax is owed. The excess simply reduces the grantor’s lifetime gift and estate tax exemption, which for 2026 is $15,000,000 per individual.12Internal Revenue Service. What’s New – Estate and Gift Tax Unless you have already given away more than $15 million in your lifetime, no actual tax is due. The filing itself is still mandatory, and skipping it can cause problems with the IRS and complicate the grantee’s tax records later.
The Carryover Basis Problem
This is where gift transfers quietly cost families serious money. When you receive property as a gift, your cost basis for capital gains purposes is the donor’s original basis, not the current market value.13Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If your parent bought a house for $80,000 in 1990 and gifts it to you when it is worth $350,000, your basis is still $80,000. Sell it for $350,000 and you could owe capital gains tax on $270,000 of profit.
Compare that to inheriting the same property. Inherited property gets a stepped-up basis equal to fair market value at the date of death. Inherit the house at $350,000, sell it for $350,000, and your taxable gain is zero. The difference is enormous, and it makes gift deeds a poor estate planning tool in many situations. Families thinking about gifting an expensive property should look seriously at a transfer-on-death deed or leaving the property through a will instead. If the property’s fair market value at the time of the gift is lower than the donor’s basis, the grantee must use the fair market value as their basis when calculating a loss.13Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust
Gifting Property That Still Has a Mortgage
Nearly every residential mortgage contains a due-on-sale clause, which lets the lender demand full repayment when ownership changes. A gift deed is still a change of ownership, and lenders can treat it as triggering the clause.
Federal law provides some protection. Under the Garn-St. Germain Depository Institutions Act, a lender on residential property with fewer than five units cannot enforce a due-on-sale clause when the borrower transfers the property to a spouse or to the borrower’s children.14Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions That covers many family gift situations. It does not cover gifts to siblings, nieces, nephews, friends, or anyone outside the spouse-and-children circle. A gift to a brother could trigger the clause and force immediate repayment of the entire balance. If you are gifting mortgaged property to anyone other than a spouse or child, talk to the lender first.
Homestead Exemption Does Not Travel With the Property
If the property currently carries a homestead exemption, that exemption does not automatically follow it to the new owner. Texas requires each owner to apply for their own exemptions.15Texas Comptroller. Property Tax Exemptions The grantee has to file a new homestead exemption application with the county appraisal district if they plan to use the property as their primary residence. Until they do, the property will be taxed at its full assessed value with no homestead reduction. If the previous owner did not receive the homestead exemption for the current tax year, a new owner who qualifies may receive it for the applicable portion of the year. Don’t assume the exemption carries over.
Medicaid Look-Back Period
Gifting real property can jeopardize Medicaid eligibility for long-term care. Federal law imposes a 60-month look-back: when someone applies for Medicaid long-term care benefits, the program reviews every financial transaction from the previous five years for assets given away or sold below fair market value.16Office of the Law Revision Counsel. 42 USC 1396p A gift deed to a child or other family member falls squarely within that review.
If Medicaid identifies the transfer during the look-back window, it can impose a penalty period that delays the applicant’s eligibility. The penalty length is based on the value of the transferred property. For anyone who might need nursing home or other long-term care within the next five years, a gift deed can be an expensive mistake. Talk to an elder law attorney before signing anything.
Title Insurance After the Transfer
Most homeowners carry an owner’s title insurance policy from when they originally bought the property. That policy covers the named insured. When property changes hands through a gift deed, the original policy generally does not extend to the new owner. A transfer to someone else, even a family member, can effectively end that coverage.
The grantee should consider buying a new owner’s title insurance policy. Without one, any title defects that surface after the transfer, including undisclosed liens, boundary disputes, or errors in the chain of title, become the grantee’s problem to resolve out of pocket. The cost of a new policy is modest compared to defending against a title claim.