When purchasing housing in common shared ownership by several persons, questions naturally arise: who has the right to receive a property deduction? in what size? Is it possible to transfer the right to deduction to another owner?
Below we will answer these questions, and also consider other features of obtaining a deduction when purchasing an apartment/house in common shared ownership.
If you have purchased a home in common ownership with your spouse or children, we recommend that you read our specialized articles:
- Obtaining a property deduction for minor children;
- Features of obtaining a property deduction by spouses;
The rules that govern the procedure for receiving the deduction and its size depend on when the housing was purchased - before or after January 1, 2014. Since January 1, 2014, significant changes have been made to the Tax Code related to obtaining a property deduction.
In this article we will consider situations where housing was purchased as common shared ownership AFTER January 1, 2014 . If you purchased housing before January 1, 2014, then read the article “Receiving a deduction when purchasing an apartment in common shared ownership before January 1, 2014.”
Note: The date of purchase of housing should be considered the date of state registration of property rights according to an extract from the Unified State Register of Real Estate when purchasing under a purchase and sale agreement or the date of the transfer deed when purchasing housing under an agreement of shared participation in construction.
Statuses of real estate in relation to owners
Shared and joint ownership provide for the registration of the same status of real estate in relation to the owners - a common right of ownership, however, each legal regime has a number of features.
Article 244 of the Civil Code of the Russian Federation states that the shared form requires the determination of shares of ownership of the object - they can be either equal or unequal, and are negotiated individually. In the case of shared ownership, spouses have the right to dispose of their share at their own discretion.
If you chose to register the property as joint property, any investigations will require the permission of all owners, since the entire apartment as a whole belongs to two citizens with equal rights to it.
It is noteworthy that the husband and wife, if they wish, can allocate shares in the property at any time during their life together and subsequently dispose of the apartment within the agreed portions individually.
Investment deduction for individual entrepreneurs
The right to investment deductions is fixed in Art. 219.1 Tax Code of the Russian Federation. The deduction is due in the following cases:
1. When selling securities traded on the securities market. The difference between income and expenses received from the sale of securities is exempt from tax. The amount of the deduction is calculated as the product of 3 million rubles and the number of full years that the sold securities were owned. A deduction is due if securities (stocks, bonds, shares) are traded on the Russian organized securities market, were owned for more than three years and were acquired after 01/01/2014.
2. When depositing money into an individual investment account (IIA). The amount deposited into an IIS during the year within the limits of 400 thousand rubles is exempt from personal income tax. You can take advantage of the deduction if the taxpayer has only one valid agreement with a Russian broker or trustee for the maintenance of personal investment information, concluded after 01/01/2014 for a period of at least three years.
3. Upon receipt of financial results from transactions reflected on the IIS. The deduction is provided for the entire amount of income received from transactions accounted for on the IIS. It is possible to apply the deduction if the taxpayer has only one valid agreement with a Russian broker or trustee for maintaining an individual investment information system, concluded after 01/01/2014 for a period of at least three years. The deduction can be used one-time, upon expiration of the contract for maintaining an IIS.
Features of ownership modes
If the property is common
- If the couple has not agreed otherwise (allocation of shares), then the joint ownership regime begins to apply to common property (apartment) acquired during marriage.
- If one of the owners wants to sell the apartment, and the other is against it, the only way to sell the property is for one of the spouses to allocate their share.
- Tax obligations on the apartment are divided among all its owners.
- Every owner has the right to receive a property tax deduction.
With shared ownership
- Each owner does not own the apartment as a whole, but only part of it.
- The owner of the share has the right to dispose of it himself, for example, to sell it to third parties. In this case, he will only be required to notify the second owner of his intention.
- Property taxes are paid by the owner according to a certain amount of his share.
- The tax deduction is also distributed in proportion to the size of the share.
As you can see, the shared form of ownership gives each owner more rights and independence, while a jointly registered apartment can be disposed of by the owners only after receiving a notarized permission for any transaction.
Watch a video about types of property rights:
Types of property rights
Results
So, the main requirement for obtaining a tax deduction when purchasing an apartment by an individual entrepreneur (as well as any other taxpayer) is the presence of income on which personal income tax is paid at a rate of 13%. A tax deduction is actually a refund of previously paid tax, therefore, if there are no amounts paid, the “housing” deduction will be denied.
Sources: Tax Code of the Russian Federation
You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.
Who can register housing purchased during marriage?
The Family and Civil Codes of the Russian Federation offer a joint or shared ownership regime. If the apartment was purchased and registered with the money of one of the couple, but at the time of the transaction the citizens arrived in an official marriage, the object for the husband and wife will be considered common.
If spouses want to specifically highlight the “contribution” to the acquisition of each, a shared form of ownership is more suitable for them. Without determining the shares, the apartment will by default be considered common with the rights of each spouse at the level of 50%.
Note! When dividing property, signing a share agreement will facilitate the legal process, but if the property is registered only in one person’s name and is joint, you will have to negotiate compensation for part of the property in favor of one when transferring full ownership rights to the other.
The apartment was purchased from a relative after 2012
In this situation, the list of interdependent relatives from whom you cannot receive a deduction when purchasing is written in paragraphs. 11 clause 2 art. 105.1 of the Tax Code of the Russian Federation is “a spouse, parents (including adoptive parents), children (including adopted children), full and half brothers and sisters, guardian (trustee) and ward.” When purchasing real estate from other relatives, the right to deduction is not lost.
All about tax deductions when buying an apartment
A small digression - if you need a free consultation, write online to the lawyer on the right or call (24 hours a day, 7 days a week) (Moscow and the region); (St. Petersburg and region); 8 (800) 350-24-83 (all regions of the Russian Federation).
In some cases, the spouse's parents are also considered dependent persons
First, it is important to know this point - if the apartment was purchased during marriage, the spouses have the right to distribute the deduction in any proportion by agreement - paragraphs. 3 p. 2 art. 220 Tax Code of the Russian Federation. By default, the deduction is distributed 50 to 50. But spouses can do, for example, 60 to 40 or 72 to 28. Up to 100% for one spouse and 0% for the second.
Moreover, the entire deduction can be distributed to the first spouse, even when the second spouse: 1) does not work or is on maternity leave, i.e. does not pay personal income tax - Letter of the Ministry of Finance dated March 29, 2021 N 03-04-05/18320; 2) works unofficially, i.e. personal income tax is not withheld from his salary/income; 3) have previously received a deduction for other real estate, i.e. I have already spent my right - Letter of the Federal Tax Service dated April 4, 2013 No. ED-3-3/ [email protected] ; 4) the apartment is fully registered in the name of the second spouse - clause 1 of Art. 256 Civil Code of the Russian Federation, Art. 34 RF IC, Letter of the Ministry of Finance dated March 18, 2015 No. 03-04-05/14480. The main thing is that the first spouse, to whom the entire deduction will be distributed, has not previously received it himself for other real estate.
Now let's look at the real situation: The couple bought an apartment from the wife's mother. It was registered in the name of the wife only (THIS IS IMPORTANT). It turns out that the wife does not have the right to receive a deduction because she bought an apartment from an interdependent relative - the mother (clause 11, clause 2, article 105.1 of the Tax Code of the Russian Federation). The spouses learned that they can distribute the entire deduction to the husband, even though the apartment is registered only in the name of the wife - clause 2 of Art. 34 RF IC and Letter of the Ministry of Finance dated 04/20/2015 No. 03-04-05/22254. The husband has the right to receive a deduction, because he and the mother-in-law are not interdependent persons.
The spouses submitted a corresponding application for the distribution of the deduction, but they were denied - Federal Tax Service Decision No. SA-4-9 / [email protected] dated 02/04/2019. The tax inspectorate considered that the husband does not have the right to receive a deduction for his wife because he is not a party to the transaction. And there is no need to establish economic feasibility on the basis of paragraph 1 of Art. 105.1 of the Tax Code, because the transaction was concluded between interdependent persons (mother and daughter). They are recognized as such by force of law, namely on the basis of paragraphs. 11 clause 2 art. 105.1 Tax Code of the Russian Federation. This opinion is also indicated in the Ruling of the Supreme Court of June 3, 2015 N 38-KG15-3. Therefore, in the above situation, the husband can receive a deduction only for “half” of the apartment.
How to register as joint property?
When registering for joint ownership of property, the agreement is signed by only one spouse, and he is the buyer and owner of the property right. However, there are a number of features that are important to observe for spouses buying real estate.
Rules for drawing up a purchase and sale agreement
The purchase and sale agreement is drawn up according to a standard template , indicating the characteristics of the property, the transaction price, the rights and obligations of the parties. There is no need to indicate a third party; if you do this, then the spouse will act as a full-fledged buyer with his share in the property.
The parties to the agreement are only the seller of the property and the buyer (the one to whom the ownership will ultimately be registered).
On a note. The peculiarity of a joint property transaction is not the agreement itself, but the procedure for its registration, for example, the mandatory presence of the spouse’s permission.
Joint personal income tax return
Since 2014, each apartment owner has the opportunity to receive a deduction in the amount of 2 million rubles (Article 220 of the Tax Code). Until 2014, despite the nuances of registration, the state issued only one deduction per apartment.
Important! Nowadays, purchasing in joint ownership has become more profitable, since the joint personal income tax return is up to a maximum of 260 thousand rubles. Spouses can use this right once, and the income of the recipient of the deduction must be official.
Who is entitled to a tax deduction?
As already mentioned, not all individual entrepreneurs can apply for a tax deduction after purchasing real estate. In order to receive it, individual entrepreneurs must meet a number of parameters.
- An individual entrepreneur must apply the general taxation regime, since only it implies the payment of personal income tax, which means that the entrepreneur is obliged to keep strict records of tax reporting and accounting, maintain a Book of Income and Expenses, pay VAT and perform all other procedures required by OSNO. The special tax regimes of the simplified tax system, UTII, unified agricultural tax, as well as the Patent system do not provide the opportunity to make a tax deduction from the purchase of real estate, since businessmen subject to these types of taxation are exempt from paying personal income tax. But there are also exceptions here: they apply to those individual entrepreneurs who, in addition to income under a special tax system, have income subject to personal income tax at a rate of 13% (for example, if a businessman combines tax regimes with OSNO).
- An individual entrepreneur must have a profit with which he can pay personal income tax at a 13% rate. In this case, an exception is made for income received as part of dividends and participation in the share of a legal entity.
- Individual entrepreneurs paying personal income tax are required to submit a declaration in form 3-NDFL to tax specialists at their place of residence by April 30 (inclusive) of the year following the reporting year. It must indicate information about the accrued tax and the amount of deduction that the individual entrepreneur expects. If a businessman also has income for which he must provide the tax authorities with a 2-NDFL certificate, then in order to receive a deduction he is obliged to transfer this to the tax service (most often this applies to entrepreneurs who rent out property as individuals and individual entrepreneurs who additionally work under employment contracts).
- An individual entrepreneur must have on hand a complete list of documents proving the fact of purchasing housing (certificate, agreement, deed, etc.).
- And finally, the last condition that must be fulfilled in order to receive a tax deduction: the purchased apartment or other real estate must be registered either in the name of the individual entrepreneur himself, or in the name of one of his children, or in the name of his spouse.
Thus, only if all of the above conditions are met, an individual entrepreneur receives the right to a tax deduction.
Attention! Individual entrepreneurs have the opportunity to receive the desired deduction even if they plan to use the purchased apartment for commercial purposes. That is, for the purposes of tax deduction, the reason for purchasing the property does not matter.
For your information. If an individual entrepreneur is married and his other half has income from which personal income tax is paid in the amount of 13%, then when purchasing real estate, the husband or wife of the individual entrepreneur can receive a full tax deduction. The reason for this is that according to the law of the Russian Federation, spouses have common property, as well as equal rights and obligations.
Sale of shared housing
The sale of an apartment that is jointly owned is possible only by mutual consent of the spouses. In this case, the provisions of the Family Code regarding property acquired during marriage apply. Despite the fact that the apartment is registered for only one person, the owner will not be able to dispose of the property at his own discretion.
The seller must be the person included in the title document , but the transaction itself will be possible with the notarized permission of the second spouse. Article 35 of the RF IC implies this document is among those required when registering a transaction in Rosreestr; without it, it will most likely be declared invalid.
Written consent will also be required if the purchase and sale agreement includes an apartment purchased during marriage, but the man and woman divorced. Even a divorce does not deprive former spouses of ownership rights to a shared apartment. In this case, the seller will either have to obtain permission to sell from the second owner, or wait until the court divides the common property and he will have his own share.
The separate permission of the spouse is not required only in the case where both the man and the woman are indicated in the purchase and sale document as equal sellers.
Standard deduction for an individual entrepreneur
Standard deductions according to Art. 218 of the Tax Code of the Russian Federation are divided into:
- for deductions provided to the taxpayer (500 and 3 thousand rubles are allocated to certain categories of taxpayers, such as heroes of the USSR, heroes of the Russian Federation, persons who suffered illnesses as a result of the Chernobyl disaster, and others);
- for deductions provided for children (for the first and second child - 1,400 rubles, for the third and subsequent ones - 3 thousand rubles, for a disabled child - 12 thousand rubles).
In order to receive a child deduction, the following restrictions apply:
- The taxpayer’s income, calculated on an accrual basis, cannot exceed 350 thousand rubles. Starting from the month in which income exceeds the established limit, no deduction is provided;
- The child’s age is no more than 18 years (24 years if the child is studying full-time). In this case, the deduction is due until the end of the year in which the child reaches the specified age.
Please note: if the individual entrepreneur is the only parent, then he can receive a double deduction. It is important to remember that from the moment of marriage the entrepreneur loses the right to deduction. After a divorce, the corresponding right resumes its validity (letter of the Ministry of Finance of the Russian Federation dated April 2, 2012 No. 03-04-05/3-410).
In addition, the Tax Code of the Russian Federation does not prohibit one of the parents from refusing a deduction in favor of the other. However, as officials note, this is only possible if you have the appropriate right to deduct, which is documented (letter of the Ministry of Finance of the Russian Federation dated December 14, 2018 No. 03-04-05/91182).
