If an individual gifts an apartment to another individual, does the recipient need to pay Individual Income Tax (IIT)?
Answer
Property (including works and services) received by an individual from another individual on a gratuitous basis—including through gifting or inheritance—does not constitute taxable income for the recipient; therefore, no Individual Income Tax (IIT) is payable.
However, this rule does not apply to property received by an individual entrepreneur that is intended for use in entrepreneurial activities.
If the gifted apartment is sold in 2026 after having been owned for less than two years, does an IIT liability arise?
Answer
Income from the capital gain (increase in value) realized by an individual upon the sale of a gifted apartment held for less than two years may be calculated as the positive difference between the sale price and the assessed value of the property.
In this context, the "assessed value" refers to the property value determined by the State Corporation for the purpose of calculating property tax as of January 1 of the year in which ownership of the sold (transferred) property was acquired.
An exception applies if the property was received gratuitously before January 1, 2026, and is sold after January 1, 2026; in this case, the threshold for the ownership period is less than one year.
How is the capital gain (income from the increase in value) calculated upon the sale of a gifted apartment? What is considered the acquisition cost? Answer
When disposing of property received free of charge, the capital gain is determined based on the sale price of said property, as there is no acquisition cost in this instance.
However, the Tax Code provides for specific cases where, instead of the acquisition cost, the following may be used:
1) the value previously included in income as property received free of charge—where the value of the property received free of charge was included in the taxable income of an individual entrepreneur or the taxable income of an individual;
2) market value—in the case of the sale (transfer) of property received through inheritance or as charitable aid;
3) appraised value—in the case of the sale (transfer) of property subject to the individual property tax;
4) cadastral (appraised) value—in the case of the sale (transfer) of a land plot;
5) zero value—in all other cases.
In this context, "market value" refers to the market value of the property being sold (transferred) as of the date ownership rights were acquired, as determined in a valuation report prepared under a contract between the appraiser and the taxpayer in accordance with the legislation of the Republic of Kazakhstan on valuation activities. "Assessed value" refers to the value of the property determined by the State Corporation for the purpose of calculating property tax as of January 1 of the year in which the right of ownership to the sold (transferred) property arose. "Cadastral (assessed) value" refers to the cadastral (assessed) value determined by the State Corporation that maintains the state land cadastre.