In what case will you have to pay tax on donated land, and when can it be avoided? Who is deprived of the right to donate plots? What to do if the state fee is charged incorrectly?
Real estate often changes owners. She's a hot commodity. This happens not only after the sale, but also when donating apartments or plots. They sell land more often than they donate it. Mostly such transactions occur between close relatives (family members). However, cases cannot be ruled out when a gift agreement is concluded between strangers.
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.
Attached documents
The payer must attach documents to the tax return that will confirm the validity of the payments. Otherwise, the information may not be accepted. First of all, the payer provides his passport. In this case, a copy of it from the pages with biographical data and information about the place of registration is also suitable.
Next, you must provide your tax payer identification number. It is assigned to a person by the Federal Tax Service. A gift agreement signed by the parties will also be required. The list of data is completed by documents relating to the site itself. These include: a certificate of ownership or an extract from the Unified State Register, as well as a cadastral passport of the plot, indicating its location, total area and boundaries.
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 answers to hourly questions
Is gift tax a direct or indirect gift tax?
Direct taxes, as well as property and transport taxes. Indirect taxes include VAT and excise taxes, because they are charged to the end buyer, not the manufacturer.
Personal income tax on gifts – is it a federal or regional tax?
Federal, but 85% of the total funds paid are transferred to the regional, 15% to local budgets.
What happens if you don't submit your declaration on time?
According to Art. 119 of the Tax Code of the Russian Federation, a citizen may be charged a fine of 5% of the amount unpaid according to the document for each month, but not more than 30% and not less than 1,000 rubles.
How is tax paid when donating a house as a property or a plot of land for rent?
Personal income tax is paid only for the house based on the cadastral value. There is no need to pay for the plot, because... the ownership of it does not pass to the donee: he only re-executes the lease agreement with the lessor.
Do those who are exempt from personal income tax need to file a declaration?
Not necessary, but desirable - in some regions inspectors require it. They may request documents confirming relationship with the donor: marriage registration certificate, birth certificate, etc.
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.
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.
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.
About re-gifting an apartment
The donation of an apartment involves at least two donation transactions. In each case, the donee is the beneficiary who is obligated to pay the tax. If the parties to each transaction are close relatives, then the obligation to pay tax does not arise either within each transaction or throughout the entire chain of transactions, from the first donor (for the first gift) to the last donee (for the last gift).
However, the tax authority can see such a scheme and, as part of a desk audit, admit that the transactions were made for show, with the sole purpose of tax evasion (provided that the first donor and the last donee are not close relatives). Tax inspectors will have more confidence when all transactions are completed one after another without significant time intervals. By appropriate decision, additional tax will be charged to the last owner. This can be challenged in court. There is not much administrative or judicial practice in such cases.
If during the first donation transaction the donee pays tax (let’s say he is not a close relative of the donor), then during the subsequent donation (transfer), even if the transaction is made in reverse (from the donee to the donor), the tax is not returned, unless the gift transaction is declared invalid.
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.
Land plot as a gift
A plot of land is the same real estate object as any building. The only difference is in the purpose.
The territory can be used not only for construction, but also for agricultural activities. The procedure for donating to other persons in this case is carried out according to general rules. First of all, the parties must have documents on hand that confirm their legal capacity to enter into transactions. For the donee, this is a passport. If such person is an incapacitated or minor person, then confirmation of the competence of the legal representative will be required. In turn, for the donor the list of documents is much larger.
In addition to the passport or power of attorney of the legal representative, other data must be provided. First of all, this is a document confirming the owner’s legal capacity to make transactions with property. This may include a certificate of ownership, an agreement of exchange, gift or sale, an extract from the Unified State Register, a cadastral passport. The recipient also needs to request a certificate of absence of debt for the maintenance of property and other encumbrances. After this, the parties negotiate and determine the terms of the transaction. The result is fixed in the contract.
The document must include the following information:
- Date and place of detention.
- Information about the parties to the transaction.
- Subject of the agreement. In this case, this will be a description of the land plot - its area and location.
- Rights, obligations and responsibilities of the parties.
- Paintings and details of the parties.
The contract can be drawn up independently or with the help of a qualified specialist. It should be noted that if the deed of gift concerns part of the land plot, then notarization is a prerequisite. After signing the agreement, it must be registered with Rosreestr. This also applies to ownership of land. To do this, you will need to draw up an application with the appropriate content and send it to the registration authority.
The text of the appeal must indicate:
- Name and address of the Rosreestr authority.
- Information about the initiator - name, where he lives, contact phone number.
- Information about the donated property - type, purpose, location, volume, grounds for transfer, that is, a gift agreement.
- Request for state registration.
- List of attached documentation.
- Date of application and signature of the applicant.
The signature of the applicant must be placed on the document. Otherwise, the application will not be valid.
The application is accompanied by the initiator’s passport, an agreement in three copies, as well as a receipt for payment of the state fee. The cost of the service for an individual will be three hundred and fifty rubles. This amount is specified in Article 333.33 of the Tax Code of the Russian Federation. Information can be submitted in person, sent by mail, online, through the MFC or an authorized representative. The deadline for fulfilling the requirements is seven working days, and if the information was sent through the MFC - nine.
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?).
