After gifting or selling a car to a family member you will need to transfer the car title into that person’s name. The process of transferring a car title to someone in your family is simple, as long as you follow the steps applicable to your situation. 
Who is Considered Family?
Family car title transfers are only allowed to those legally considered immediate family members. In Texas, and in most states, spouses, parents, children, siblings, grandparents, and grandchildren are all eligible for a family member title transfer. Extended family members, such as aunts and cousins, need to have car title ownership transferred to them using the standard process used when selling cars to private buyers.
Record the Odometer
The first step in transferring ownership of a car title, whether to a family member or anyone else, is recording the odometer reading at the time of the transfer. The odometer keeps track of the car’s mileage and is listed on the title every time the car changes hands as a way of determining the car’s present value as property. In Texas, the odometer reading is recorded under the Assignment of Title on car titles and a Form 5 odometer disclosure form may be required if the car is being transferred to someone not considered a member of your immediate family.
Assignment of Title
After recording the odometer reading, both you and the family member taking ownership of the car need to finish filling out the Assignment of Title section. Both you and the family member need to print and sign your name in the appropriate places. The date of the transfer also needs to be recorded. In most states, including Texas, either you or your family member will also need to file an Application for Certificate of Title with the DMV when the title is transferred.
If you are selling a car to your family member, not giving it as a gift, you will need to include the sale price of the vehicle on the title at the time of the transfer.
Gift Tax
When you give your car to a member of your immediate family as a gift, that family member will be charged a $10 Gift Tax in lieu of the standard rate of tax applied to large gifts of property. The Texas Gift Tax is only applicable to the immediate family members listed in the previous section. While filing out the Application for Certificate of Title, be sure your family member checks the box designated “Gift Tax.” The transferred title should be brought to your local county tax office or tax assessor by the new owner along with an Affidavit of Motor Vehicle Gift Transfer.
If you decide to transfer instead of sell your car to a dealer, the process of transferring ownership of your car title to an immediate family involves a small amount of paperwork and a trip to your local DMV. Record the odometer, fill out the proper forms, and be sure the new owner is a qualified member of your immediate family before transferring the car title.
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