Gifting a car in Texas involves visiting your county tax office, notifying the Texas Department of Motor Vehicles (TXDMV), and transferring the title to your recipient. Prepare to pay around $100 in fees to complete the gift transfer.
Your gifted car's recipient may not have to pay a sales tax if they are an eligible family member and you’ve submitted an affidavit to your local tax office.
Discuss the financial obligations of car ownership with your gift recipient to determine who will pay for what before gifting a car.
A title transfer and a bill of sale are required to officially transfer ownership of a gifted vehicle.
, as the lienholder is the technical owner of the vehicle.
Pro tip: Consider bringing the car's recipient to the dealership so they can weigh involved in the choice of car and the financing paperwork. This is the easiest way to buy a new car as a gift if you need to finance the purchase.
, however, they may qualify to pay Texas' $10 gift tax instead.
The following types of family members may qualify to pay the Texas gift tax instead of a property value-based tax assessment include:
Spouse
Parent/Parent-in-law
Stepparent
Sibling
Grandparent/Grandparent-in-law
Grandchild/Grandchild-in-law
Child/Child-in-law
Stepchild
Legal guardian
What to do: Complete a Texas Affidavit of Motor Vehicle Gift Transfer with your eligible family member to apply for a gift tax exemption with your county tax assessor-collector.
Negotiate the terms of the gift with your recipient
Car-gifting in Texas entails the following fees:
Application for Texas title: $28 to $33
Vehicle insurance verification: up to $31.50
Additional local and county fees: up to $31.50
Automation fee: $1
Discuss and determine who will be liable for these fees with the person to whom you're giving the car. Your car's recipient will eventually have to pay a fee for a
Keep in mind: Car-related expenses don't stop once the motor vehicle transfer is complete. Maintenance, insurance, gas, and parking can also add up over time.
The following table gives an idea of how gifted car expenses can quickly add up:
to create a paper trail for the Texas DMV and absolve you from financial responsibility once you’ve gifted your car. This document confirms the gifted vehicle’s ownership transfer and should include the following information:
Keep in mind: The car's "buyer" (or in this case, the gift recipient) is responsible for taking care of the title transfer. As the vehicle "seller," you are only required to provide the following:
The current car title signed over to the new owner (simply write "0" in the price section if it's a gift)
A current odometer reading on the vehicle title certificate
A signed Application for Texas Certificate of Title
A lien release from your lender, if applicable
Purchase Texas liability insurance—or full coverage
Drivers who do not meet these insurance minimums can face serious fines, so make sure the recipient of the gifted car is prepared to purchase auto insurance.
“Just for state minimum liability, I was getting quotes from $70 to over $100/month until I found
When you gift a car, you must visit your local Texas county tax office with a completed Texas vehicle title application, a release of lien or power of attorney, and payment for required fees. You must also sign over the car title to the new owner.
How much is the gift tax on a car in Texas?
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If you give a car to an immediate relative, they may qualify to pay a $10 Texas gift tax. Otherwise, they might be liable to pay tax based on the car's current market value.
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