A gift of land or a house to a child is complete once the Land Registry accepts the transfer. Whatever the parent means to keep has to be reserved before signing.
Many parents in Cyprus put a house, a flat or a plot into a child's name while they are still alive: on a marriage, to help with a first home, or to settle the family's affairs early. Some come back years later with a different question. The child has grown distant, a marriage has broken down, or the parents need the property or its income themselves. Can the gift be taken back?
As a rule, no. A gift of immovable property is made at the Land Registry, and once the transfer is accepted the property belongs to the child. The law that governs the transfer has no procedure for cancelling a registered gift, and a court will set one aside for reasons that go to how it was made, not to what happened afterwards. What a parent wants to keep, a home for life or the income, has to be decided and written into the transfer before it is signed.
A gift of land is made at the Land Registry, and only there
A promise, a signed letter or a family agreement does not give a child the property; the declaration of transfer at the District Lands Office does. Under the Immovable Property (Transfer and Mortgage) Law, Law 9/1965, no transfer is valid unless made under that Law (section 5(1)), owner and child appear together and declare it (section 8), the owner states whether it is made gratuitously or for consideration (section 18(1)(c)), and title passes from the day and time the declaration is accepted (section 19).
The Supreme Court applied the rule in Loizou and Another v. Republic (1987) 3 C.L.R. 1402. A father had signed memoranda of gift of immovable property to his wife and children more than three years before he died, but never transferred it. The mere signing of the memoranda, the Court held, did not vest the property in them: a further step was required of the donor, transferring the property and having it registered in their names. A gift that has been signed for but not registered when the parent dies has not been made.
One document comes from outside the Land Registry: a certificate from the Tax Commissioner that capital gains tax has been paid or deferred, or that none arises (section 18(3)(c)(i)). Our guide to title deeds explains how a transfer is completed.
A registered gift is not undone because the parent changes their mind
A parent cannot cancel a registered gift by changing their mind, or because the child has behaved badly. Law 9/1965 provides no procedure for revoking a gift once it is registered, and the declaration of transfer points the other way. Under section 18(1)(e) the parties state that there is no agreement for the property to be transferred back to the transferor on payment of any sum or on the happening of any event. An understanding that the child will "give it back if" is exactly what both sides declare does not exist, and section 49 makes a knowingly false statement in a declaration of transfer an offence, punishable as if it were false evidence in court proceedings.
Chrysoulla Sergidi v. Maria Hadjipavlou (2016) 1 A.A.D. 1192 shows how quickly the door closes. An elderly mother signed a gift of her house to one of her three daughters on 23 January 2007, and the house was transferred the next day. After another daughter learned of it, the mother revoked the power of attorney she had given, wrote that she had not understood what she had signed, and soon afterwards sued to set the transfer aside, alleging among other things undue influence. The District Court set it aside. The Supreme Court allowed the appeal and dismissed the action. The relationship between an adult child and an elderly parent, it held, does not by itself raise a presumption of undue influence; it gave weight to evidence that the mother had expressed the same wish consistently, and that her lawyer had asked her about her earlier will and read the documents to her word for word before she signed. The gift stood.
What remains is a transfer back that the child agrees to make, as a fresh transfer at the Land Registry. The daughter in Sergidi had done exactly that once before, re-transferring the same house to her mother in 1997, two years after receiving it.
A will can be revoked. A registered gift cannot.
The contrast with a will is the point to hold on to. Section 37 of the Wills and Succession Law, Cap. 195, allows a will to be revoked by a later will or by destroying it with the intention of revoking it. A parent who wants to keep the freedom to change their mind is looking for a will, not a gift, and our article on disinheriting a child explains how far a will can go.
When a court will set a gift aside
A gift can be undone where the parent's consent was not free. Under the Contract Law, Cap. 149, consent is free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake (section 14), and an agreement obtained by coercion, fraud, misrepresentation or undue influence is voidable at the option of the party whose consent was so obtained (sections 19 and 20). Undue influence arises where one party is in a position to dominate the will of the other and uses it to obtain an unfair advantage. Someone dealing with a person whose mental capacity is affected by age, illness or mental or bodily distress is deemed to be in that position, and where the transaction appears unconscionable, that person must prove there was no undue influence (section 16).
In Kefalas and Another v. Nikola (2000) 1 A.A.D. 1226, a 72-year-old widow in Pegeia, in poor health and living alone, agreed with a married couple that they would look after her for the rest of her life, and transferred to them her savings and, through a power of attorney, her house. The transfer was set aside for undue influence and the house ordered back into her name, and the Supreme Court dismissed the appeal. Independent advice, the Court said, could have told her to hand over the money in stages to test the care, to transfer the house in stages, to register at the Land Registry a right to occupy and use the house for life, and to ask for a guarantee. She was told none of it.
Time matters as well. In Ioannou v. Charalambidou (1998) 1 A.A.D. 555, a wife had transferred her house to her husband under threats, and the Supreme Court upheld the setting aside of the gift. It held that a gift voidable for undue influence must be challenged within a reasonable time after the influence ends, a question of fact in each case. There, less than a year had passed. A donor who waits longer risks being taken to have affirmed the gift.
What to reserve before you sign
What a parent keeps is what is written into the transfer. Under section 11(1)(g) of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224, a right over another's property can arise where the owner reserved it in writing on transferring the property, and section 18(1)(h) of Law 9/1965 provides for the reservation to be recorded and signed by both parties before the Land Registry officer on the transfer form. If the property is mortgaged, the reservation needs the consent of the lender and of every guarantor of the borrower.
The words matter. In Diomidous v. Diomidous, decided by the Supreme Court on 12 October 2017, parents in Pedoulas gave their son, in 2001, a building with two homes and a café-restaurant, where they also let rooms. The title recorded only their right of residence for life. The Land Registry officer had noted usufruct as well, but the son, who planned to develop the property, assured his mother that residence and usufruct were the same thing, and she asked for the usufruct to be struck out. He then tried to take possession and confine his parents to a single room, so that he would take the income of the businesses. The District Court held that their right of residence covered the whole building, but refused to recognise a usufruct that had not been reserved in writing. The Supreme Court went further: such a right can also be acquired by a court judgment under section 11(1)(c) of Cap. 224, and it declared that the parents kept the usufruct. They won, sixteen years after the transfer.
Read with Kefalas, the cases give a parent three things to settle before signing.
- Residence or usufruct. A right to live in the property is not, in terms, a right to its income. A parent who lives on rent from the property, or runs a business in it, needs that reserved.
- All or part, now or later. The whole property need not pass at once. Keeping a share, or transferring in stages, keeps something in the parent's hands.
- Advice that is the parent's own. In Sergidi the lawyer's care helped the gift survive a challenge; in Kefalas the absence of independent advice helped undo the transfer.
If the child is a minor, one more point applies. The property is the child's from registration, and section 11 of the Parents and Children Relations Law, Law 216/1990, provides that parents may not make gifts out of their child's property.
A gift made in the shadow of debt can be undone by creditors
A parent with debts, or with a guarantee that may be called, should expect a gift to a child to be examined. Section 3(1) of the Fraudulent Transfers (Avoidance) Law, Cap. 62, makes a gift made with intent to hinder or delay creditors void against them. Section 3(2) places on the parent and the child the burden of proving that a transfer to a child, made without payment in money, property of equivalent value or good consideration, was made in good faith.
In Giannitsaros and Another v. Bank of Cyprus Public Company Ltd, decided by the Supreme Court on 9 May 2023, a father who had guaranteed a company's loan received the bank's letter of 7 September 2009 warning of legal action. On 9 October and 11 November 2009 he transferred property to his daughter by gift. Judgment for €911,986.25 followed in 2011, and the transfers were set aside as fraudulent and the properties ordered back into the father's name. His explanation, that the gifts carried out an earlier settlement with his estranged wife, was not accepted, and the daughter gave no evidence at all. The appeal was dismissed.
Fees and capital gains tax
No Land Registry fee is charged for registering a gift from parent to child. Item 3(b)(ii) of the Schedule to the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, says so in terms. Gifts to other relatives up to the third degree, and between spouses, fall under a separate sub-paragraph.
A gift from a parent to a child is also not a disposal for capital gains tax. Section 10(b) of the Capital Gains Tax Law, Law 52/1980, excludes from disposal a gift from a parent to a child, married or unmarried. The gain is not wiped out. For the child's later sale, the property is valued at the parent's original or adjusted acquisition value, whichever is lower, or at its value on 1 January 1980, whichever date is later, and after successive gifts it is the first donor who counts. What the child's eventual sale will cost is a question for an accountant before the transfer, not after.
The gift is counted again on death
A lifetime gift is counted against the child's share of the reserved portion of the parent's estate unless the parent's will says otherwise. Section 51 of Cap. 195 requires a child who becomes entitled to the reserved portion to bring into account any property received from the deceased at any time by gift during life, under a marriage settlement, as dowry or by gift in contemplation of death. A proviso excludes property that the deceased released by a special provision in the will. A gift to one child is therefore not, on its own, a way of preferring that child: if the parent means it as something extra, the will has to say so. Our page on wills and succession sets out how the firm advises on passing assets to the next generation.
What this means in practice
Treat the transfer as final. Once the Land Registry accepts the declaration, the property is the child's. Changing your mind, or falling out with the child, does not bring it back.
Write down what you keep, in the right words. A right of residence and usufruct are different rights. Reserve in writing, on the transfer form, exactly what you mean to keep, and check that it is there before you sign.
Use a will for what you may want to change. A will can be revoked and rewritten; a gift cannot. Where a lifetime gift is meant to be extra, the will should also release it from being brought into account.
Do not give when creditors are close. A gift to a child made with debts outstanding, or a guarantee about to be called, invites an application under Cap. 62, and the parent and child then have to prove good faith.
If you are the child. The property is yours from registration, subject to any right your parents reserved. It can be reached by your parents' creditors if the gift was made to defeat them, it will be counted against your share when they die unless the will says otherwise, and for capital gains tax on your own sale it carries your parent's acquisition value.
If the gift was obtained by pressure, act promptly. A gift voidable for undue influence has to be challenged within a reasonable time after the influence ends.
Questions we are asked
Can I revoke a gift of property I made to my child?
Not by changing your mind. Once the Land Registry accepts the declaration of transfer, title passes to the child under section 19 of Law 9/1965, and that Law has no procedure for cancelling a registered gift. The child may agree to transfer it back, by a fresh transfer. A court can set a gift aside where the parent's consent was obtained by undue influence, coercion, fraud or misrepresentation, under the Contract Law, Cap. 149, and a challenge for undue influence must come within a reasonable time after the influence ends.
Can the gift be made conditional, so that my child returns the property if something happens?
Not through the transfer. The declaration of transfer under section 18(1)(e) of Law 9/1965 includes a statement that there is no agreement to transfer the property back on payment of any sum or on the happening of any event, and section 49 makes a knowingly false statement in a declaration an offence. What a parent can do is reserve rights over the property in writing on the transfer, under section 11(1)(g) of Cap. 224.
What is the difference between a right of residence and usufruct?
The courts treat them as different rights. In Diomidous v. Diomidous, decided by the Supreme Court on 12 October 2017, parents had agreed with their son that they would keep the management and enjoyment of the property for life, but the title recorded only a right of residence for life, and the son tried to confine them to one room and take the income of the café and the rooms to let. The Court declared that they kept the usufruct, but only after litigation and an appeal. A parent who wants the income, not only a home, should reserve it in terms.
Do I pay Land Registry fees on a gift to my child?
No. Under the Schedule to the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, item 3(b)(ii), no fee is charged for registering title on a gift from parent to child. Before the transfer is accepted, the Tax Commissioner must still certify that capital gains tax has been paid or deferred, or that none arises, under section 18(3)(c)(i) of Law 9/1965.
Is a gift to my child taxed?
A gift from a parent to a child, married or unmarried, is not a disposal for capital gains tax under section 10(b) of Law 52/1980. The gain is not wiped out: when the child later sells, the property is valued at the parent's acquisition value, or at its value on 1 January 1980 if that date is later.
Will the gift count against my child's inheritance?
Yes, unless your will says otherwise. Section 51 of the Wills and Succession Law, Cap. 195, requires a child who becomes entitled to the reserved portion to bring into account property received from the deceased at any time by gift during life. A special provision in the will can release it.
Can my creditors undo a gift I made to my child?
A creditor who has obtained judgment can apply to have it set aside if it was made with intent to hinder or delay creditors, under section 3 of the Fraudulent Transfers (Avoidance) Law, Cap. 62. Where the transfer was to a child without money, property of equivalent value or good consideration, the parent and the child carry the burden of proving good faith. In Giannitsaros v. Bank of Cyprus (2023) a guarantor's gifts to his daughter, made within about two months of the bank's warning letter, were set aside and the properties ordered back into his name.
Sources
- The Immovable Property (Transfer and Mortgage) Law of 1965, Law 9/1965, consolidated text, sections 5, 8, 18, 19 and 49, CyLaw
- The Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224, consolidated text, section 11, CyLaw
- The Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, consolidated text, Schedule, item 3(b)(ii), CyLaw
- The Capital Gains Tax Law of 1980, Law 52/1980, consolidated text, section 10(b), CyLaw
- The Wills and Succession Law, Cap. 195, consolidated text, sections 37 and 51, CyLaw
- The Contract Law, Cap. 149, consolidated text, sections 14, 16, 19 and 20, CyLaw
- The Fraudulent Transfers (Avoidance) Law, Cap. 62, consolidated text, section 3, CyLaw
- The Parents and Children Relations Law of 1990, Law 216/1990, consolidated text, section 11, CyLaw
- Andromidis Diomidous v. Petros Diomidous and Another, Civil Appeals 329/2011 and 343/2011, Supreme Court of Cyprus, 12 October 2017
- Chrysoulla Sergidi v. Maria Savva Hadjipavlou, as administratrix of the estate of Galateia Savva Hadjipavlou (2016) 1 A.A.D. 1192, Civil Appeal 317/2010, Supreme Court of Cyprus, 16 May 2016
- Michael Kefalas and Another v. Myrianthi Kyriakou Nikola (2000) 1 A.A.D. 1226, Civil Appeal 10539, Supreme Court of Cyprus, 17 July 2000
- Arestis Michael Ioannou v. Anna Andrea Charalambidou (1998) 1 A.A.D. 555, Civil Appeal 9784, Supreme Court of Cyprus, 26 March 1998
- Sotiris Nikola Giannitsaros and Another v. Bank of Cyprus Public Company Ltd, Civil Appeal E151/2015, Supreme Court of Cyprus, 9 May 2023
- The Estate of Costas Panayiotides, through its administrators Loizou and Frangou v. Republic (1987) 3 C.L.R. 1402, Case No. 248/85, Supreme Court of Cyprus, 16 October 1987
This article is provided for general information purposes only and does not constitute legal advice.
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