As a general rule, only those taxpayers whose income is taxed (personal income tax) at a rate of 13% can receive a property tax deduction when purchasing a home.
Since tax on income from pensions is not withheld (clause 2 of Article 217 of the Tax Code of the Russian Federation), pensioners who have only a pension as their source of income, in most cases cannot receive a property deduction when purchasing housing (letter of the Federal Tax Service of Russia dated May 15, 2013 No. ED- 4-3/ [email protected] , Letters of the Ministry of Finance dated June 29, 2011 No. 03-04-05/5-455, dated September 24, 2013 No. 03-04-05/39618).
An exception is the opportunity, under certain conditions, to transfer deductions to previous years , provided to pensioners by Federal Law No. 330-FZ of November 1, 2011.
If a pensioner does not officially work, but has other additional income on which he pays personal income tax at a rate of 13% (for example, income from renting out real estate or from the sale of property), then he has the right to take advantage of a property deduction and return (reduce) taxes on these income.
Who pays tax when buying an apartment: the seller or the buyer?
After concluding an agreement for the purchase and sale of an apartment in the Russian Federation, the beneficiary is required to pay income tax. Regardless of who was the initiator - the seller or the buyer, 13% must be contributed by the one who sells the property.
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The transaction must be registered through Rosreestr. After the title to the property passes to the new owner, the seller is obliged to repay the debt to the state. The buyer does not pay tax on the acquisition of property.
Deadlines for paying taxes when purchasing an apartment
As soon as the buyer becomes the new owner, the former owner, represented by the seller, is obliged to pay the Federal Tax Service. To do this, the payer must submit a 3-NDFL declaration to the Federal Tax Service at the place of registration by April 30 of the next year.
Important! The previous owner must pay tax on the purchase of the apartment. The maximum period for depositing cash on a receipt is until July 15 of the following year. The fee is paid by the seller once. If the seller refuses to provide information to the Tax Service or pay income taxes, a late penalty will be charged.
Payment nuances
The seller must report to the Tax Service by April 30 of the following year. Even if a citizen did not receive real benefits from the transaction, he is required to provide a declaration. A document with zeros in the “profit” column is the basis on which the payer is released from financial obligations. The absence of documents or exceeding the maximum permissible deadlines for providing certificates is considered a violation of the legislation of the Russian Federation. The Federal Tax Service will apply penalties in the form of fines and penalties to the violator.
Reference! Banks and other financial services do not charge a commission when paying tax receipts from the sender. For cash transfers to pay off penalties, the client must pay an additional 5%.
Exemption from tax burden
When a citizen buys an apartment, the property is taxed in most cases. The obligation to deposit funds to the Federal Tax Service rests with the seller. Exception: transactions in which the property belonged to the owner for 5 years or more.
In some cases, the law provides for tax exemption for the seller for 3 years of ownership of an apartment (donation, rent, inheritance, privatization).
Apartments purchased before 01/01/2016 must be owned by the citizen for 3 years. In this case, there is no mandatory payment required upon purchase.
Who pays property tax
Officially it is called personal property tax. It is paid by the owners of studios, penthouses, apartments, apartments, country houses, offices, shops, etc.
Even if a person does not live in this premises, but is its owner, a notification will be sent from the tax service about the need to make contributions.
If the owner owns a share, then the tax will be paid in accordance with its size. The tax presupposes the availability of benefits that apply to vulnerable segments of the population. The largest group is pensioners. They have payment subsidies.
Benefits apply to the following types of premises:
- apartment, hotel;
- separate room;
- country house;
- garage;
- a non-residential building adapted for storage, if its area is no more than 50 sq.m;
- territory for creative purposes.
Similar real estate properties are paid according to a special scheme. For similar apartments, tax will have to be paid only for one of them, for the second one will be charged according to the general rules.
Tax payment is possible through a bank or on one of the state portals. The duty is paid in the year following the end of the tax period.
Calculating tax
The income tax on the purchase of an apartment is paid not by the buyer, but by the seller. It is easy to calculate the amount of contributions: 13% of the transaction under the contract. The seller, like the buyer, can use a property deduction in the amount of 1 million rubles. By this amount it is allowed to reduce the cost of the base for calculating contributions.
From the video you will learn about taxation when buying and selling an apartment:
Another option for reducing tax is providing certificates about the costs of purchasing housing. If the profit amount is less than the purchase costs, the payer does not have to pay the Federal Tax Service. When a property is sold at half price or even cheaper, the cadastral value of the property is used for calculation with a coefficient of 0.7. When calculating contributions after purchase, the former owner chooses which benefit option to choose.
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Klimov Yaroslav
More than 12 years in real estate, higher legal education (Russian Academy of Justice)
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Example: Sergeev sold property for 3.4 million, which he acquired in 2017 for 2.7 million rubles. under a mortgage agreement. The seller still had documents from the bank, so Sergeev decided to use a deduction taking into account the difference in income and expenses to reduce the base. Before July 15 of the following year, Sergeev is obliged to submit:
(3400000-2700000)×13%=91,000 rub.
If Sergeev had chosen a deduction of 1 million, he would have to transfer to the budget:
(3400000-1000000) ×13%=312,000 rub.
Reference! The seller may only use one basis reduction option. Unlike benefits for the buyer, this method of reducing contributions can be used repeatedly, but not more than once a year for the selected property.
How to calculate property tax
There is no need to determine the amount of tax yourself; the tax office will indicate the final figure in the notification.
State duty until 2015
Previously, payments were calculated based on the inventory value of housing. It was determined by the costs of building materials and finishing, and the wear and tear of the building was also taken into account. The inventory value was often lower than the market price.
Tax deduction for area
It does not apply to benefits. The deduction is available to all categories of taxpayers, even if you own a penthouse or one-room Khrushchev apartment.
Property tax is not charged on the area that falls under the deduction. It is paid only from the difference. The area of the apartment is reduced by 20 sq.m., rooms - 10 sq.m., houses - 50 sq.m. And for a small house with an area of 50 square meters, state duty will not be charged at all.
Calculation based on cadastral value
Tax laws must be constantly monitored, otherwise you may end up in an unpleasant situation. Since 2015, regions have switched to calculating real estate taxes based on the cadastral value of housing. Some constituent entities of the Russian Federation began paying under this scheme only last year.
Valuation of housing according to the cadastre includes more factors. It takes into account:
- infrastructure of the area,
- property location,
- availability of parking and a playground near the house,
- market price for analogues and more.
The cadastral price must be current, so it will be recalculated on average once every five years. The frequency of revaluation is determined by local authorities. Frequent periodization is being established, for example, in Sevastopol, Moscow and St. Petersburg they will begin to reassess every three years.
The procedure for obtaining a property deduction
To reduce the costs of citizens in the process of concluding a purchase and sale transaction in the real estate market, the state provides buyers with a property deduction. What is the benefit?
A deduction is the amount by which the tax base is reduced in the process of purchasing a home. Since the obligation to pay tax belongs to the seller, the buyer can receive a deduction in the amount of 13% of the transaction amount, but not more than 260 thousand rubles. The amount from which the deduction is calculated is limited to 2 million rubles.
Funds paid to the buyer are not refunded. After the limit is 100% exhausted, the right to compensate contributions to the Federal Tax Service is lost.
How to apply for a benefit?
Benefit options:
- A lump sum to the payer's account. Issued by the Federal Tax Service.
- Gradually, by exempting from paying 13% of the salary. It is completed by the Federal Tax Service or through the accounting department at work.
In the first case, funds are paid if the entire amount was transferred as income tax during the last 4 years. If the employee’s income during this period is not enough to return all contributions, you can annually submit a 3-NDFL declaration until the limit is exhausted.
The second option for receiving benefits involves a temporary exemption from paying 13%. The employee's salary will not be subject to contributions until the employee receives 260 thousand rubles.
Expert opinion
Klimov Yaroslav
More than 12 years in real estate, higher legal education (Russian Academy of Justice)
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Example: Ivanov’s salary is 50 thousand rubles. Before purchasing an apartment worth 2.3 million rubles. The employer withheld contributions in the amount of 6,500 rubles from the payer’s salary every month. (13 %). After Ivanov became the owner of his own home, he filed a tax deduction through his employer. Thus, over the next 3 years and 4 months. (260,000/6500=40 months) 13% of the salary will not be withheld from Ivanov.
If Ivanov had chosen the first option, he would have been able to receive the entire amount (260 thousand rubles) in full. The condition is that Ivanov’s experience at his current place of work must exceed 4 years, and the salary must be sufficient to transfer the entire amount to the budget for the specified period. If over the last 4 years of employment, 13% of the employee’s income exceeded the amount of contributions for the required period, the government agency will provide compensation in a one-time payment of 100% of the amount.
Cash return under a mortgage agreement
An additional way to reduce costs during the property purchase process is to get a portion of the mortgage interest paid back. This is another benefit option available to those who purchased real estate using loan funds.
Conditions:
- The benefit is calculated from the base in the amount of up to 3 million rubles.
- Refunds are made in the amount of income tax - 13%.
- The calculation is made only from the amount of interest paid on the loan.
- The service is available to officially employed borrowers, from whose wages the employer annually contributed 13% to the budget.
- The amount available for return is limited to 390 thousand.
The borrower can receive money paid into the budget after submitting an application to the Federal Tax Service.
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Klimov Yaroslav
More than 12 years in real estate, higher legal education (Russian Academy of Justice)
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Example: in 2021, Petrov purchased property on credit. For 2 years, he overpaid the bank 480 thousand in interest. Petrov is officially employed, his employer contributes 13% of the employee’s salary to the budget every month, so the borrower can return income tax on interest when buying an apartment with a mortgage. The return will be: 480,000×13%=62,400.
In what cases is the benefit not provided?
Unlike the privilege when selling property, the condition applies to a purchased apartment only within a non-renewable limit. If the owner has been paid 260 thousand rubles by the Federal Tax Service, the citizen cannot re-use the privilege. The restriction applies to all contracts for the sale and purchase of property. The benefit is provided in the amount of the remaining part if the payer under the purchase and sale agreement used the refund partially for the first time.
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Klimov Yaroslav
More than 12 years in real estate, higher legal education (Russian Academy of Justice)
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Example: Petrov in 2021 received a 13% return for the purchase of property, 200 thousand rubles were transferred to his account. In 2021, Petrov bought real estate again. He has the right to reimburse 60 thousand transferred by the Federal Tax Service, since this part of the deduction amount remained unclaimed after the previous transaction.
Important! Once the limit has been exhausted, you cannot return 13% by concluding a new contract for the purchase of property.
Does a pensioner need to pay tax when buying an apartment?
A pensioner, like everyone who purchases property, does not have to pay contributions to the Federal Tax Service for the purchase of property. But those who are not officially employed cannot count on receiving benefits.
If in 2021 a non-working pensioner became the owner of an apartment, he cannot receive a deduction. But a citizen can reimburse 13% for the last 4 years, from 2015 to 2021, if during this period he was officially employed.
Requirements for receiving a deduction for pensioners:
- Availability of official income. The payer must receive a pension and at the same time work under an employment contract. Other confirmed income options from which regular contributions to the budget are made are also ways to return 13%.
- Payment of income tax to the Federal Tax Service. There are cases when an employee, according to documents, is officially employed, but his employer evades the obligation to pay taxes. In this case, it is impossible to receive a benefit until funds in the form of income tax for the entire period of activity are transferred to the Tax Service.
- Availability of a sufficient amount transferred in the amount of 13% to receive a deduction. If a pensioner works for several months, the funds paid to the Federal Tax Service may not be enough to receive a deduction in full (up to 260 thousand). In this case, the employee has the right to claim a refund by submitting a declaration for the next year. It is allowed to return payments until the pensioner completely exhausts the limit of 260 thousand.
- Availability of a payment limit. If a pensioner has already received 260 thousand in the form of a property deduction for the purchase of housing, he can no longer take advantage of the benefit. Refund 13% of the amount of 2 million rubles. for home buyers, including pensioners, is provided only once. After the limit has been exhausted, the Federal Tax Service does not return overpaid funds.
Reference! Non-working pensioners can receive a 13% refund only if shortly before purchasing the property they were officially employed. According to the Tax Code of the Russian Federation, you can return contributions paid to the Federal Tax Service 3 years before retirement, without taking into account the year of acquisition of property.
Working pensioner
Previously, the Tax Code contained a restriction according to which working (income-earning) pensioners could not transfer a property deduction. However, from January 1, 2014, changes were made to the Tax Code of the Russian Federation that removed this restriction.
Accordingly, since 2014, not only pensioners who have no income, but also those who continue their working activities can take advantage of the right to transfer the property deduction to the previous three years. (Letter of the Federal Tax Service of Russia dated 04/28/2014 No. BS-4-11/ [email protected] , Letters of the Ministry of Finance of Russia dated 05/15/2015 No. 03-04-05/27966 and dated 04/17/2014 No. 03-04-07/17776).
Example: In 2021 Zhuravlev A.K. reached retirement age, but continued to work. In 2021, he purchased an apartment worth 3 million rubles. At the end of 2021 (in 2021) Zhuravlev A.K. will be able to submit documents to the tax office at the place of registration to receive a property deduction for 2021, 2021, 2021, 2021 (since he is a pensioner and has the right to transfer the deduction).
If the tax he paid for 2017-2020 is not enough to completely exhaust the deduction, he will be able to continue to receive it in subsequent years.
If maternity capital is used
When purchasing an apartment using maternity capital, the owner has the right to receive a property deduction. But the base from which the 13% return will be calculated is the difference between the actual cost of housing and the amount of family capital.
The benefit for purchasing property depends on the amount of actual expenses incurred. Funds issued by the Russian Pension Fund in the form of maternity capital are not personal expenses of the citizen.
Expert opinion
Klimov Yaroslav
More than 12 years in real estate, higher legal education (Russian Academy of Justice)
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Example: Sidorova purchased real estate in [year] using maternity capital, fully cashing out the certificate. The cost of housing was 2.4 million rubles. Sidorova has the right to return the deduction in the amount of: (2,400,000 -453,026)×13%=253,106.62 rubles.
The amount of income tax paid will be returned to Sidorova in full, since the calculation base was reduced by the amount of maternity capital and amounted to 1,946,974 rubles.
Important! Family capital can be used to pay interest and mortgage debt. In this case, to return 13% of the interest on the loan agreement, the amount of payments made for the intended use of the certificate will be deducted from the base.
What taxes will you have to pay when buying real estate?
In Russia, after the epidemic, demand for real estate has resumed. How to get a personal income tax refund and save on taxes when purchasing residential or commercial real estate.
There is no need to talk about a drop in demand for real estate during the restrictions. Some calm was due to the fact that Rosreestr and the notary office were temporarily closed. Judging by public statements, developers were able to quickly switch to remote sales processing. Most likely, demand will continue to grow. Real estate has proven to be one of the most stable assets that can be attractive to investors in such a situation.
Purchase on credit
Nowadays, purchasing real estate on credit has become the norm. To purchase real estate, consumer or mortgage lending is issued.
A consumer loan is issued for purposes not related to business, only for consumption. It can be taken for any purchase and purchasing real estate is one of the options. Consumer lending, unlike mortgages, is not specialized.
Typically, the amount of a consumer loan does not exceed 3 million rubles. The upper age limit for borrowers ranges from 55 to 70 years and often depends on the bank and the specific loan program. Banks generally require that the borrower be no more than 65 years old for men and 60 years old for women at the time of loan repayment.
The mortgage term is on average 20 years, while consumer loans are repaid in 1 to 3 years, very rarely – 5 years.
The important thing is that interest rates on consumer loans are significantly higher than mortgage payments. If with a mortgage they vary between 4-10%, then a consumer loan is issued at 10-15% per annum.
Another difference is the provision of collateral. For a consumer loan, the bank can accept a car, apartment, or country real estate as collateral. In the case of mortgage lending, real estate is taken as collateral for the purchase of which a loan is issued.
Purchase using maternity capital or military mortgage
Today, many who have such an opportunity use maternity capital or housing certificates to purchase real estate. This is a significant help in solving the housing issue.
The use of maternity capital is especially popular, which is often used as a down payment in the absence of own funds. But there are pitfalls here, since not all banks provide borrowers with the opportunity to make a down payment entirely with maternity capital. Some banks require additional payment from the borrower’s own funds in the amount of 5 to 15% of the cost of the apartment.
From January 1, 2021, maternity capital is equal to 466,617 rubles. It is important to understand that, taking into account the conditions of standard programs, the down payment must be at least 15% of the total cost of the property, therefore, if there is no money for the down payment, you can purchase an apartment with maternity capital, without attracting your own funds, in the range of 2. 5 - 3 million rubles. Naturally, if you have your own funds, the cost of real estate available for purchase increases.
It should be remembered that at first it is necessary to pay increased interest on the loan, since banks increase the amount of loan available to the borrower, which is calculated based on his income, by the amount of maternity capital or housing certificate. Only after concluding a loan agreement does the real estate buyer formalize the repayment of part of the loan at the expense of maternity capital or a housing certificate. Until this money reaches the bank, monthly payments are calculated based on the loan amount issued by the bank. And only after the bank receives the funds, the monthly payment amount is recalculated.
Using maternity capital as a down payment, buyers should understand that such real estate can only be sold with the permission of the board of trustees and on the condition that an apartment with better living conditions will be purchased in return. After all, when purchasing real estate using maternity capital, property rights are divided among all family members, including minor children. Accordingly, all subsequent purchase and sale transactions with this property may be challenged and declared invalid. If such a transaction is concluded, the new owner will be left homeless. When purchasing housing on the secondary market, it is necessary to find out whether maternity capital was involved in previous transactions with such real estate and whether it was used lawfully.
According to a similar scheme, as a down payment, you can use a state housing certificate, which is issued to participants in the subprogram to receive a subsidy from the federal budget for the purchase of residential premises.
Tax deduction after purchasing real estate
Individuals after purchasing real estate can claim a personal income tax refund. If you work officially and receive a “white” salary, then the employer withholds and transfers the amount of personal income tax to the budget; the interest rate today is 13%. You receive your salary minus tax. For example, your salary is 100,000 rubles, you receive 87,000 rubles in your hands, and the employer deducts 13,000 rubles from you and transfers it to the budget. This is exactly the amount that can be returned. At this salary for the year it turns out to be 156,000 rubles.
A tax deduction for real estate is provided in the following cases:
· construction or purchase of housing: apartment, private house, room or share
· purchase of land with a residential building or for building a house
· interest costs on a mortgage loan
· costs for finishing and repairing housing - only in the case of a new building (if it was purchased from the developer without finishing)
The amount of tax you can get back is determined by two main parameters: your expenses when buying a home and the personal income tax you paid.
The maximum possible amount for calculating a tax deduction is 2 million rubles, and for mortgage interest – 3 million rubles
In total, you can return up to 13% of the value of real estate or land, but the maximum amount for deduction should not exceed 2 million rubles. Thus, up to 260,000 rubles can be returned from your taxes when purchasing real estate, as well as up to 390,000 rubles for mortgage interest paid. That is, you can buy a home for either 5 or 10 million, but the state will pay 13% only for 2 million rubles.
Every year you can return no more than what you actually transferred to the personal income tax budget, that is, 13% of the official salary. At the same time, you can return the tax over several years until you return the entire amount.
Purchase of real estate by a legal entity
The acquisition of real estate by legal entities in almost 100% of cases involves its subsequent use for business purposes. The main problem of the organization in this case will be to correctly determine the amount of valuation of the property in accounting and tax accounting. Any mistake in this matter will entail tax penalties, so let’s pay special attention to tax risks.
Here's what you need to pay special attention to:
· the procedure for assessing a property depends on the method of its acquisition. You can build an object, buy a ready-made one, receive it as a contribution to the authorized capital, or even free of charge. In each of the listed cases, along with the general norms of legislation, special norms that are determined specifically for different methods of registering property rights should be taken into account.
· legislation on accounting and tax accounting classifies expenses associated with the acquisition of real estate differently into those included and not included in the cost of the property. A typical mistake by a taxpayer is to include expenses that should be included in the cost of an object as expenses of the reporting period. But the opposite situation also happens, when the tax burden unreasonably increases. Industrial facilities require special attention. Here it is important to correctly divide the costs between the property itself, equipment, installation and commissioning costs, and personnel training costs.
· disputes with the tax authorities continue regarding the period in which the taxpayer has the right to deduct “input” VAT on expenses associated with the acquisition and bringing the object to a state suitable for use.
It is necessary to correctly determine the date from which a property acquired in one way or another will be registered in the prescribed manner and included in the tax base for property tax. The tax base can be the book value, determined according to accounting data, or the cadastral value of the object.
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In 2014, there were changes in the calculation of the property deduction for pensioners. Until 2014, they were prohibited from carrying forward the deduction to 3 previous periods. After amendments to paragraph 10 of Art. 220 of the Tax Code of the Russian Federation, pensioners who continue official work have the right to receive a benefit 3 years before purchasing an apartment.
From the video you will learn about taxes when buying and selling an apartment:
The purchase of real estate is subject to tax. The responsibility to contribute cash to the budget rests with the seller of the property. Both parties to the transaction can take advantage of property deductions to reduce the tax base.
Transfer of property deductions by pensioners
Until 2012, if a pensioner did not have additional income, he could not receive a deduction. However, from January 1, 2012, a special procedure for transferring the balance of deductions for persons receiving pensions was added to the Tax Code.
Now, in accordance with paragraph 10 of Art. 220 of the Tax Code of the Russian Federation, a pensioner has the right to transfer the balance of property tax deductions “to previous tax periods, but not more than three, immediately preceding the tax period in which the transferred balance of property tax deductions was formed.”
The wording of the transfer of deductions in the Tax Code and letters from regulatory authorities is quite complex and confusing. In simple terms, regardless of when the apartment was purchased, a pensioner can, in most cases, receive a deduction (refund the tax paid) for the last 4 calendar years. For example, in 2021 he can return taxes for 2021, 2021, 2021, 2021.
Important to remember:
- You can submit documents for the deduction no earlier than the end of the calendar year in which the housing was purchased. For example, if an apartment was purchased in 2021, then you can submit documents for the deduction only in 2021 (accordingly, you can return the tax for 2020-2017);
- You cannot receive a deduction for more than the last 4 calendar years. For example, in 2021, under no circumstances can you receive a tax refund for 2021 (“Retiree Property Deduction Rollover”).
- if a pensioner had no income in a calendar year, then there is nothing to return to him. For example, if a pensioner retired 5 years ago and has not worked since then, he will not be able to return anything.
Example: In 2021 Filatov M.V. retired, and in 2021 he bought an apartment. To take advantage of the right to a property deduction, Filatov needs to wait until the end of the calendar year and submit documents for a tax refund to the tax office in 2021.
Since Filatov was already retired in 2021 (and did not receive taxable income), he will be able to receive a deduction for 2021 (that part of the year when he was still working), 2021 and 2021.
Example: In 2021 Kireeva L.L. I bought an apartment. At the end of 2021 and 2021, she submitted documents to the tax office and received part of the property deduction (returned the tax paid for 2021 and 2021).
In 2021, Kireeva retired. Accordingly, after retirement in 2021, Kireeva can exercise the right to transfer the deduction and return the tax paid for the last four years (2020, 2021, 2021, 2017).
Since she has already received a deduction for 2021 and 2021, she will only be able to submit documents for the deduction for 2021 and 2021. Also, at the end of 2021 (in 2022), she will be able to return the tax for 2021 (for the period when she worked).
In the article Transferring property deductions by pensioners, the process of transferring deductions by pensioners is discussed in more detail.
Please note : in case of transfer of deductions, declarations are completed in the reverse order. For example, when transferring a deduction to 2020-2017, declarations will be filled out in the following sequence: 2021, 2021 (remaining deductions from 2021 will be transferred to it), 2021 (remaining deductions from 2021 will be transferred to it) and so on.
