How to give an apartment to a relative, real estate gift tax

The donor does not pay tax Who does not pay tax when receiving a gift Who pays tax when receiving a gift Amount of gift tax Deadline for payment of gift tax How to determine the value of a gift

When it comes to gifts, especially expensive ones, questions naturally arise: is a gift considered income and is it necessary to pay gift tax? Who should pay the tax? Donor? Gift recipient? If tax is due, then on what amount is it paid? Are there legal ways to avoid paying or reduce taxes?

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The donor never pays tax

There are situations when the tax authority sends a letter to the donor, demanding that he declare income and pay tax. When receiving such a letter, there is no need to worry - the tax authority sometimes receives only data on the alienation of property, assuming that a sale has been made and you have received income. You can ignore the letter from the tax service or write an explanatory note and attach a copy of the gift agreement to it.

In the future in this article we will only consider situations where you received property or money as a gift.

Types of donation and their features

In addition to the taxable gift of real estate, there are other ways to transfer property to another person. What are the differences:

• gratuitousness (conditions are excluded when the donee is dependent on the donor. When donating property, one cannot set conditions and oblige the donee to provide any services in return for the property received. For example, the desire to donate an apartment, but at the same time retain the right to reside in it);
• an increase, as a result of a transaction, of property owned by the donee (for example, if there was one own apartment, then after the donation there were two);
• reduction (due to a gift transaction) of the donor’s possession of property;
• the desire of the owner-donor to give a gift must be voluntary and intentional (the courts often consider claims in which other persons claiming the donated property try to prove that the donation was made under pressure, with threats and deception);
• You can only give it to someone who agrees to accept the gift.

The listed signs are mandatory when registering a gift and will be the basis for the legality of the gift in the event of any claims against the donor or recipient on the part of other interested parties.

When do you not need to pay tax on a gift?

According to tax law, tax is NOT paid when receiving a gift in the following cases:

1) If you received money or property from another person as a gift that is not related to real estate, transport, shares/shares/shares (paragraph 1, clause 18.1, article 217 of the Tax Code of the Russian Federation).

Example: For his birthday, guests gave Semenov I.P. 60 thousand rubles. Since a gift in the form of money from other persons is not taxable, Semenov I.P. you do not need to declare this income or pay tax on it.

2) If you received property as a gift from a family member or close relative (paragraph 2, clause 18.1, article 217 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated June 1, 2016 No. 03-04-05/31613).

In accordance with tax legislation (paragraph 2, clause 18.1, article 217 of the Tax Code of the Russian Federation), such relatives are recognized as: spouses, parents and children (including adoptive parents and adopted children), grandparents and grandchildren, full and half-blooded (having a common father or mother) brothers and sisters. Any property, including real estate, received as a gift from these persons is not subject to tax.

Example: Osina M.Z. received as a gift from grandfather Osin P.L. automobile. Since, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, the grandfather and granddaughter are close relatives, then Osina M.Z. you do not need to declare the receipt of a car as a gift and pay income tax.

Example: Stolbova I.B. received under a gift agreement from her mother Terekhina M.S. apartment. Since parents and children are close relatives, Stolbova I.B. there is no need to file a 3-NDFL tax return and pay tax on income from the gift.

When receiving real estate, vehicles, shares, shares as a gift from a relative or family member not included in the above list, you will have to declare income and pay income tax.

Example: Berestov G.P. I received an apartment as a gift from my aunt. Since aunt, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation does not apply to close relatives, then Berestov G.P. must submit a 3-NDFL declaration to the tax office and pay a tax of 13% of the cost of the apartment.

You can read more detailed information about taxation when donating property between relatives in our article: Tax when donating property between relatives.

Lawyer's answers to frequently asked questions

Is it possible to submit 3-NDFL through another person if it is not possible to do it yourself or via the Internet?

Yes. You need to draw up a power of attorney, it is provided along with the declaration. Information about it is indicated in the document itself.

Who files a declaration and pays tax when making a gift from a legal entity to an employee?

Employer. Gifts with a total value of up to 4,000 rubles. per year are not subject to tax.

Is there a tax deduction for gifts?

No, the donor does not receive income or pay taxes, and the recipient does not spend the money.

I was given a share in the apartment, the contract was certified by a notary. Will the Federal Tax Service find out about the transaction if I do not file a declaration?

Yes, he will. Information to the Federal Tax Service on all certified transactions with citizens' property is transmitted by notaries.

How to determine the market value of a car for tax purposes?

You need to indicate it in the deed of gift, based on the average prices for a car in the region, or order an independent assessment.

When do you need to pay gift tax?

In general, gifts are recognized as income in kind and if the income is not clearly exempt from taxation (we described these cases above), then you must declare it and pay tax (Clause 1, Article 210 of the Tax Code of the Russian Federation, Article 41 of the Tax Code of the Russian Federation).

If a person who is not on the list of close relatives has given you real estate, transport, shares or a share in an organization, then you are required to submit a declaration to the tax authority in Form 3-NDFL and pay a tax in the amount of 13% of the value of the gift (clause 1 of Art. 210 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated 05.08.2014 No. 03-04-05/38547).

Example: In 2021, a friend gave Bochkova T.M. a car worth 300 thousand rubles. Since gifts from friends are not exempt from tax, Bochkova T.M. by April 30, 2021, must submit a 3-NDFL declaration to the tax office and, by July 15, 2021, pay a tax in the amount of 13% of the value of the gift (300,000 x 13% = 39 thousand rubles).

Example: In 2021, a nephew gave Slavin D.B. an apartment worth 2 million rubles. According to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, the nephew is not a close relative, therefore Slavin D.B. by April 30, 2021, must submit a 3-NDFL declaration to the tax office and, by July 15, 2021, pay a tax in the amount of 13% of the value of the gift (2,000,000 x 13% = 260 thousand rubles).

Also, a 13% tax must be withheld from a gift if it is received from an organization (the gift can be in any form, even monetary), and its value exceeds 4,000 rubles. We will not dwell on this in detail, since in most cases the organization itself withholds tax on the gift and reports to the tax authority. That is, you do not have the obligation to pay tax and file a declaration.

Donor's rights

The donor is the former owner of the apartment, who transferred it under a deed of gift to the next owner. Based on the donation, there are no tax consequences:

• there is no need to calculate and pay 13% personal income tax to the budget;
• no tax refund is provided;
• Property tax (annual) ceases from the moment of the donation transaction.

In this case, it is impossible to apply the rules on deductions by analogy with the buyer during the purchase and sale. The buyer purchases the property and incurs expenses, from which he can return 13%. The donor simply voluntarily transfers the property without acquiring anything. The price of this property cannot be deducted. This is a false comparison.

However, by donating an apartment, the donor does not lose the right to claim a deduction under the policy under which he once bought it.

Example. In 2021, Mikhail Sviridenko bought an apartment for 2 million rubles. He did not submit any documents for the deduction and did not receive any money from the budget. In 2021, he gave this apartment to his daughter. At the same time, after the housing was re-registered in his daughter’s name, Mikhail’s right to a deduction for the 2021 purchase and sale transaction did not disappear. He has the right to submit documents to the tax office or to work - and receive money from the treasury.

The law does not provide for other deductions related to the gift of an apartment.

Deadlines for filing a tax return and paying taxes

The 3-NDFL declaration must be submitted to the tax office at the place of primary registration (registration) no later than April 30 of the year following the year the gift (income) was received (clause 3 of Article 228, clause 1 of Article 229 of the Tax Code of the Russian Federation).

If, as a result of the declaration, you must pay tax, then this must be done no later than July 15 of the year following the year in which the gift (income) was received .

Example: In 2021 Sychev I.A. I received a room as a gift from my niece. Since the niece, according to clause 18.1 of Art. 217 of the Tax Code of the Russian Federation, is not a close relative, then Sychev I.A. filed a 3-NDFL declaration with the tax authority by April 30, 2021 and paid income tax in the amount of 13% of the cost of the room by July 15, 2021.

You can learn about the liability and penalties for failure to submit or untimely submission of the 3-NDFL declaration, as well as non-payment of tax, in our article: Penalties for delay/failure to submit the 3-NDFL declaration or non-payment of tax.

Terms of the gift agreement

The subject of a gift agreement is most often property or vehicles. Among the items of donation, there are ordinary gifts with a value that does not exceed 5 minimum wages and ordinary gifts of small value. Agreements for the donation of such gifts do not provide for the registration of deeds of gift and are not subject to tax.

The subject of the gift agreement must be specified and drawn up in accordance with the legislation of the Russian Federation. All fictitious transactions may entail administrative liability.

In most cases, a donation can be formalized orally if it is a transfer of inexpensive items, documents and other valuables.

In simple written form, a gift agreement is concluded if the donor is a legal entity and the object of the gift does not exceed 5 minimum wages.

If an agreement is concluded orally and contains only a promising nature, then this agreement cannot be considered valid and it does not contain any executive nature.

All donation transactions must be concluded in accordance with the legislation of the Russian Federation, certified by a notary, and only then will they be valid and of an executive nature.

How to determine the value of a gift and the amount of tax?

If the value of the gift is determined in the contract, it is used as the amount of income.

Example: In 2021 Dmitrov F.M. I received an apartment from my uncle under a gift agreement. At the same time, the gift agreement indicates the price of the apartment in the amount of 1.5 million rubles. At the end of 2021 (until April 30, 2021) Dmitrov F.M. must submit a 3-NDFL declaration to the tax authority, which will indicate income from the gift in the amount of 1.5 million rubles. Also, until July 15, 2021, Dmitrov will have to pay income tax in the amount of: 1,500,000 x 13% = 195,000 rubles.

If the value in the contract is too low, tax inspectors will be able to demand payment of personal income tax based on the market value of the property. This position is supported by letters from the Russian Ministry of Finance, which indicate that in relation to the gift of real estate between persons who are not close relatives, for tax purposes, the amount of income can be taken from the agreement only if it corresponds to the market value of the real estate (Letters of the Russian Ministry of Finance dated October 15, 2015 No. 03-04-05/59154, dated 05/08/2014 No. 03-04-05/21903, dated 04/30/2014 No. 03-04-05/20685).

Example: An uncle gave his nephew S.M. Kislov a gift. an apartment in the center of Moscow, indicating the cost of the apartment in the donation agreement is 100 thousand rubles. If Kislov S.M. submits a declaration indicating an income of 100 thousand rubles, then the tax inspectorate will most likely challenge the amount of income and ask to pay a tax of 13% of the market value of the apartment.

If the gift agreement does not indicate the value of the gift, the amount of income is determined by the market value of the gift received.

When determining the cost of housing, the tax office often requires that it be based on the cadastral value. Since the tax legislation does not define the procedure for determining the market value, and you, for example, do not agree with the cadastral value, you can declare a different amount for calculation, insisting that it is the market value of your home. However, in this case, be prepared to defend your position before the tax authorities.

You can find out the cadastral value of housing in the cadastral passport of the property, as well as by contacting Rosreestr or the Federal Service of Cadastre and Cartography (Cadastral Chamber).

Example: In 2021 Golubeva D.K. I received a room from my mother-in-law under a gift agreement. Since the mother-in-law, according to the Tax Code of the Russian Federation, is not a close relative, Golubeva D.K. must pay income tax in the amount of 13% of the cost of the room. By contacting Rosreestr Golubeva D.K. I found out the cadastral value of the room (350 thousand rubles). At the end of 2021 (until April 30, 2021) Golubeva D.K. must submit a declaration to the tax authority indicating her income from the gift of 350 thousand rubles. Pay income tax in the amount of 45,500 rubles. (RUB 350,000 x 13%) she will have until July 15, 2021.

Useful video

Why will the payment procedure and taxes on gifted real estate be much lower than with the standard inheritance procedure?

What must be written down in the gift agreement in order not to create a conflict and not be thrown out onto the street? How to ensure that the parties comply with the terms of the agreement and that everyone fulfills its contents? What is the taxation when making a gift? An expert talks about all this in a useful video, based on the practice of applying laws when drawing up and challenging gift agreements.

How to prepare and submit a 3-NDFL tax return?

You can fill out the 3-NDFL declaration using the declaration form (see Forms and Forms). You can download samples of filling out the declaration here: Samples of filling out 3-NDFL when donating.

After completion, you must submit the 3-NDFL declaration to the tax authority at the place of your permanent registration. You can do this in person at the tax authority or send the declaration by mail with a valuable letter with a list of the attachments (more detailed information is provided in our article: How and where to submit a 3-NDFL declaration?).

Declaration of income when receiving property as a gift

Income from the received property arises from a person who is not a relative of the recipient. The person submits a declaration of income received. The tax base is the value of the property under the contract, taking into account a comparison with the cadastral value:

• If there is an amount in the contract that differs from the cadastral amount, it is accepted for taxation in the amount of 70% of the cadastral data.
• If there is no value of the property in the contract, the full value indicated in the cadastre is used for taxation.

The object of taxation arises only upon the transfer of ownership rights. In the case of a gift of property for which there is no legal title, the obligation to pay tax does not arise. An example is the donation of a share in an unfinished house or the transfer of a plot of land for rent.

Methods of submitting documents for tax deductions

The benefit is provided directly to the Federal Tax Service or from the employer acting as a tax agent when paying wages to an employee. Submission of a package of documents to the Federal Tax Service is carried out in person or by a representative, by mail, or by using the government services website.

Obtaining a property deduction from a tax agent in the event of accepting property as a gift rarely occurs in connection with the occurrence of income in the form of the value of real estate. By applying a deduction simultaneously with declaring income, the taxpayer reduces the amount of obligations to the budget.