To deed land to a family member, you sign a notarized deed identifying the property and the recipient, then file it with the county recorder in the county where the land sits. The government paperwork usually costs under $100. The tax side is where the real money lives: a transfer worth more than $19,000 triggers a federal gift tax filing, and the person receiving the land inherits your original purchase price as their tax basis, which can produce a much larger capital gains bill when they eventually sell.
Pick the Deed Type Before You Sign
Two deed forms cover almost every family transfer. The choice controls how much protection the recipient has if a title problem surfaces later.
A warranty deed is the stronger of the two. The grantor legally guarantees clear title and the absence of hidden liens or other encumbrances. If a defect turns up later, the recipient can sue the grantor for breach of that guarantee. This matters when the property has a complicated ownership history or when the recipient plans to sell or borrow against it soon.
A quitclaim deed transfers only whatever interest the grantor actually holds and makes no promises about title quality. If the grantor owns nothing, the recipient gets nothing and has no claim to fall back on. Quitclaim deeds are popular between relatives because they are simple and the parties trust each other, but trust is not a title guarantee. An unknown lien or boundary dispute becomes the recipient’s problem.
For most family gifts where the grantor has owned the land for years and carries a title insurance policy, a quitclaim deed is usually enough. If the title history is at all uncertain, use a warranty deed. Note that the grantor’s existing title insurance does not automatically transfer with the property, so the new owner may want their own policy, especially before any future sale or refinance.
What the Deed Must Contain
A deed needs specific details pulled straight from existing property records. A small mistake can get the filing rejected or create a gap in the chain of title that trips up a future sale.
- The grantor’s full legal name, spelled exactly as it appears on the current recorded deed. Even a missing middle initial can break the ownership chain.
- The grantee’s full legal name and a mailing address where future tax notices will go.
- The legal description of the property, usually a metes-and-bounds survey or a lot-and-block reference from a recorded plat. A street address alone is almost never enough. Copy this language directly from the existing deed or the county assessor’s records.
- The parcel identification number the county uses on the tax bill.
- A consideration statement showing what the recipient gave in exchange. For a gift, the common phrasing is “ten dollars and other good and valuable consideration” or “love and affection.” Local custom varies.
Most county clerk offices publish standardized deed forms, and many post them online. Fill in every field. An incomplete form is the most common reason recorders reject filings. Most forms also ask for a return address where the recorded original should be mailed.
Sign, Notarize, and Record
The grantor signs the deed in front of a notary public. The notary verifies identity, confirms the signature is voluntary, and applies an official seal. Some states also require witnesses at the signing. Florida and Louisiana require two, Georgia requires one, and Connecticut and South Carolina each require two. Witness rules follow the state where the property is located, not where the signing happens, so check the property’s state before scheduling.
After notarization, file the deed with the county recorder (sometimes called the register of deeds) in the county where the land sits. That filing puts the transfer on the public record. Recording fees usually run between $25 and $75 for a standard two-page deed, with per-page charges for longer documents. Many jurisdictions also require a transfer declaration or similar form that reports the transaction value.
Once accepted, the deed is assigned an instrument number, scanned into the public record, and mailed back to the return address on the form. The whole process typically takes a few weeks. Until the deed is recorded, the transfer is not part of the public record, which means a creditor of the grantor could still lien the property, or the grantor could in theory convey the same land again. Record promptly.
Federal Gift Tax Filing
When you deed land to a family member for less than fair market value, the IRS treats the difference as a gift. If the property’s fair market value is more than $19,000, you must file Form 709, the federal gift tax return, for the year of the transfer.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes The $19,000 figure is the 2026 annual gift tax exclusion per recipient.2Internal Revenue Service. What’s New – Estate and Gift Tax If both spouses agree to split the gift, the exclusion doubles to $38,000 per recipient, and both spouses must file Form 709 for that year even if only one of them owned the property.3Internal Revenue Service. Instructions for Form 709 (2025)
Filing does not necessarily mean owing tax. Any amount above the annual exclusion counts against your lifetime estate and gift tax exemption, which is $15,000,000 for 2026.2Internal Revenue Service. What’s New – Estate and Gift Tax Actual gift tax comes out of pocket only after that lifetime amount is exhausted. Most families never approach it. The return is still required, because the IRS uses it to track cumulative lifetime gifts.
Form 709 is due by April 15 of the year after the gift. Filing an extension on your income tax return automatically extends Form 709 as well.3Internal Revenue Service. Instructions for Form 709 (2025) If gift tax is owed and the return is late, the penalty is 5% of the unpaid tax per month, up to 25%.4Internal Revenue Service. Failure to File Penalty
The Capital Gains Trap of Lifetime Gifts
This is where most families lose money without realizing it. When you give property during your lifetime, the recipient takes over your original cost basis. Say you bought the land for $40,000 thirty years ago and it is worth $300,000 today. Your child’s basis remains $40,000.5Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If they sell for $300,000, they owe capital gains tax on $260,000 of gain.
Property that passes through inheritance works differently. A person who inherits gets a stepped-up basis equal to the fair market value on the original owner’s date of death.6Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent Using the same numbers, if the parent holds the property until death and the child inherits it at $300,000, the child’s basis is $300,000. Sell at $300,000 and the capital gains tax is zero. On a single transaction, that difference can be tens of thousands of dollars.
Lifetime gifts still make sense in some situations, from Medicaid planning to wanting to see a child use the land. But run the capital gains numbers first. In many cases, the family saves far more by holding the property until death and letting the stepped-up basis work.
What Happens to the Mortgage
A deed does not move the mortgage. The original borrower stays personally liable for every payment regardless of whose name is on the title. If the new owner stops paying, the default hits the original borrower’s credit and can lead to foreclosure.
Most mortgage contracts include a due-on-sale clause that lets the lender demand full repayment when the property changes hands. The federal Garn-St. Germain Act blocks that clause in certain family situations. For residential property with fewer than five units, a lender cannot call the loan due when the property is transferred to the borrower’s spouse or children.7Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions Transfers to siblings, parents, cousins, or other relatives are not protected, and those transfers can trigger the clause.
Even when Garn-St. Germain applies, it only prevents acceleration. It does not move the loan. To get the original borrower off the mortgage, the new owner either refinances in their own name or negotiates a formal loan assumption with the lender. Until one of those happens, the grantor still carries the legal obligation and the credit risk.
State Transfer Taxes and Property Reassessment
Many states impose a documentary stamp tax or transfer tax when real property changes hands. Rates range from nothing at all to several percent of value in higher-tax states. Some states exempt transfers between immediate family members or transfers where no money changes hands, but the exemption rules vary widely. Check with the county recorder before filing to confirm whether a transfer tax applies and whether a family exemption is available.
Recording a new deed also notifies the local assessor that ownership has changed. In many jurisdictions, that triggers a reassessment of the property’s value for annual property tax purposes. If the property has appreciated since the last assessment, the new owner can face a noticeably higher tax bill. Some states limit reassessment on transfers between parents and children, but the protection is not universal. The new owner should also confirm they qualify for any homestead exemption the property previously carried, since a change in ownership can disqualify the property from that break.
Medicaid Look-Back If Long-Term Care Is a Concern
Families sometimes deed a home to a child to keep it off the table if a parent later needs Medicaid to cover long-term care. This is riskier than it looks. Federal law requires states to impose a penalty period of Medicaid ineligibility when someone transfers assets for less than fair market value within the look-back period before applying for benefits.8Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
The look-back is 60 months (five years) before the Medicaid application for long-term care. Gift your home to a child two years before entering a nursing facility, and the state counts the transfer as a disqualifying event. The penalty period is calculated by dividing the value of the transferred asset by the average monthly cost of nursing home care in your state. During that penalty period, Medicaid pays nothing toward the nursing facility, leaving the applicant or family to cover the cost out of pocket.
Transfers made more than five years before the application generally fall outside the look-back window, so long-range planning is possible. Health emergencies are unpredictable, though, and deeding away a home prematurely can backfire. Anyone using a family deed for Medicaid planning should first talk to an elder law attorney who knows how their state administers the penalty.
Transfer-on-Death Deeds as a Cleaner Alternative
About 30 states plus the District of Columbia recognize transfer-on-death (TOD) deeds, sometimes called beneficiary deeds. A TOD deed names a beneficiary who automatically takes the property at the owner’s death, outside of probate, but the transfer does not happen during the owner’s life. The owner keeps full control and can sell, mortgage, or revoke the TOD deed at any time.
Because the property does not change hands until death, the beneficiary gets a stepped-up basis rather than a carryover basis.6Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent There is no gift tax filing, no Medicaid look-back problem, and no due-on-sale trigger. For families whose main goal is simply passing land to the next generation while avoiding probate, a TOD deed often does that more cleanly than an outright lifetime gift. The catch is that not every state offers them, so confirm availability in the state where the property sits before deciding.