Yes, you would pay the gift tax, as you would for any gift, subject to the annual exclusion (I believe you do not need to pay taxes on the first $13,000 of gifts each year.)The tax would be based on the value of the property, which is the fair market value as of when you gift it.You may wish to explore other options, if this would result in a great deal of tax liability. Potentially, the recipient could agree to pay the tax; or there may be some advantage to giving the recipient a life estate in property while you are alive, then passing to them upon your death. You should consult with a tax professional before deciding what to do.