How to sell an apartment without taxes: legal ways to avoid paying tax

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The sale of residential real estate is a complex and lengthy process, as a result of which the seller has a certain income. For it you have to pay a tax in the form of 13% of the sale value, but in some situations, citizens have the right to receive exemption from paying this fee. To do this, some simple requirements must be met. Therefore, people should understand how to sell an apartment without taxes. The method used must be legal, because if the seller wants to deceive the tax office by indicating the wrong amount in the contract, then the tax will be calculated on the basis of the cadastral, not the sale value of the object.

Ways to reduce the tax base

Often people think about whether it is possible to sell an apartment without tax. The procedure can indeed be carried out without negative tax consequences, but only if certain requirements are met. The main ways of exemption from personal income tax include:

• if the apartment was bought with cash or a mortgage,then it can be sold without paying tax only after 5 years;
• if the housing was obtained on the basis of a gratuitous transaction, then you need to wait only three years;
• it is allowed to sell an object earlier, and if the sale price is lower than the purchase price, then the citizen does not have income, so there is no need to calculate and transfer personal income tax to the budget;
• if the cost of housing is less than 1 million rubles, for example, if a room in a hostel is sold, then you can use a tax deduction of 1 million rubles, so you just get a negative tax base;
• if the sale and purchase of other real estate is carried out within one year, then the citizen will be able to use the mutual settlement of deductions.

Each option has its own characteristics, so the owner of the home decides how to sell the apartment without taxes. You should not negotiate with the buyer to write inaccurate information in the contract, as this will only lead to the fact that the specialists of the Federal Tax Service will calculate the tax based on the cadastral value of housing.

Term of ownership of the purchased apartment

Most often people are interested in the question of how much it takes to sell an apartment without tax. If the housing was bought at your own expense, then you will have to wait at least five years. Such changes in the tax code were made back in 2016.

Even if the housing was purchased with the help of maternity capital, a mortgage or an employer, the buyer in the contract of sale wasdirect taxpayer. Therefore, if he does not want to pay personal income tax on the sale of the object, then he will have to wait five years.

Until 2016, it was necessary to wait only three years, regardless of how the property was received by the seller. But on the basis of Federal Law No. 382, amendments were made to the Tax Code, which changed the period of ownership of real estate in order to obtain exemption from income tax. Therefore, in Art. 217.1 of the Tax Code, you can study the rules for calculating this fee when selling real estate.

Features for the received apartment

Housing can be not only bought, but also received on the basis of various gratuitous transactions. How long can you sell an apartment without tax in this case? Under such conditions, you need to wait only three years from the date of registration of ownership. These deals include:

• housing was privatized by all persons who at that time were registered in the apartment;
• the apartment was inherited from deceased relatives or friends;
• object was donated by close relatives, which include spouses, parents, children or siblings;
• housing was transferred to a person on the basis of a rental agreement, but previously he kept the owner of this property for life.

In the above situations, you need to wait only three years, after which you can sell the property without paying tax. In other situations, you will have to wait five years. Such conditions began to operate from the beginning of 2016.

Why are there time limits?

Anyone who plans to sell real estate should understand when it is possible to sell a donated apartment without taxes. The need to wait is related to economic nuances, since for such a period of time a citizen will not be able to receive any profit from the purchase and sale of real estate.

Officials are sure that in five years inflation and depreciation of real estate will significantly reduce its market value, so if a person is aimed at making commercial profit, then it will be minimal.

If a person does not receive a profit from the transaction, then he can sell the property at the purchase price. In this case, the citizen does not pay personal income tax due to the lack of income. But he will have to prove that he really did not make any profit.

How is the term calculated?

Any property owner should know how to sell an apartment without tax. After how many years can this operation be performed? The term depends on how the property was obtained by the taxpayer.

This period of time does not always begin from the moment of signing any contract, since sometimes the moment of registration of the right in Rosreestr is taken into account. Therefore, the tenure is calculated based on the following rules:

• if a sale and purchase agreement is concluded, then the period starts from the date specified in the agreement if the purchase was made on the secondary market, and the date available in the invoice certificate can also be used if the object was bought from the developer;
• if a person receives housingby inheritance, then the date of opening of the inheritance is taken into account, therefore, the period of actual acceptance of property or receipt of a certificate of inheritance does not matter;
• if a person is missing, this does not give the heirs the right to dispose of his property, but when the court recognizes that a person is considered dead, then a period of three years begins from the moment the court decision is made;
• if a donation was drawn up, then the countdown starts from the date specified in the donation agreement;
• often property is purchased in parts, for example, a citizen can first buy a room, and then the rest of the apartment, so the countdown starts from the moment the first part is purchased.

If the homeowner knows when he can sell the apartment without tax, he will be able to easily conclude a deal for the sale of real estate without fear of having to transfer a large amount of funds to the state budget.

Using property deduction

If a person knows when to sell an apartment without tax, but cannot wait three years, then he can use other ways to reduce the tax burden. One such method is the filing of a tax deduction. It is offered to all citizens who sell their apartment.

According to art. 220 of the Tax Code, the amount of such a deduction is 1 million rubles. It is by this amount that the tax base, represented by the sale price of the object, is reduced. If people deliberately underestimate the price of an apartment when concluding a transaction, then 70% of the cadastral value indicated inRosreestre. But this condition only applies to objects that were purchased after 2016.

If an inexpensive object is being sold, represented by a one-room apartment or even a room, but the price may not exceed 1 million rubles. Under these conditions, it is possible to sell an apartment without tax in 2019, since the tax base is represented by a negative value.

If the price of real estate is more than 1 million rubles, then the amount of tax is significantly reduced due to the deduction. For example, a citizen wants to sell an apartment donated by a relative one year after the conclusion of the donation. The apartment is located on the outskirts of the city, so it costs only 1.2 million rubles. The seller will not be able to avoid having to pay the fee, but he can take advantage of the tax deduction. For him, the tax amount is: (1,200,000 - 1,000,000)13%=26 thousand rubles.

Therefore, you can even sell an apartment in a new building without tax or with a minimum payment, if you use the deduction. But under such conditions, tax service specialists will still send a notification to the taxpayer. It cannot be ignored, so you will have to visit the FTS branch to notify service employees about the use of the deduction. Additionally, a 3-personal income tax declaration and other papers for the sold property are submitted to this organization.

The disadvantage of using this method to reduce the tax burden is that it can only be used once a year. Therefore, if a person plans to sell several properties within one year, then he will have to reduce the tax in other ways.

Accounting for purchase price

How to sell an apartment without paying tax if it is impossible to reduce the fee in other ways? Another method presents the possibility of accounting for the purchase price of the apartment. This option is suitable only in a situation where housing was previously purchased at the expense of personal funds or a mortgage. Selling an apartment after donation without tax in this way will not work, since the citizen did not spend his own funds on such an acquisition.

The tax is paid exclusively on profits received from the sale of real estate. If a person can prove that he did not receive any income from the transaction, then he is exempt from paying tax. When can I sell an apartment without paying taxes? If you use this method, then you can sell the object at any time after the purchase. The process of using this method of tax exemption differs in the following parameters:

• the citizen must keep the documents on the basis of which he acquired the property;
• if the apartment is sold at the same price at which it was bought, then no tax is required;
• no need to transfer funds to the state budget if an apartment is sold at a lower cost;
• if the selling price exceeds the purchase price, then 13% is paid exclusively from the existing difference;
• the taxpayer must have official documents that contain information about how much he bought and sold his property for;
• this method is considered convenient if a person needs to sell real estate urgently, andalso its price exceeds 1 million rubles;
• it is allowed to use the cost reduction method simultaneously with the deduction, but only for different real estate objects, for example, if a citizen needs to sell several apartments within one year.

A feature of this method is that a citizen will have to submit documentation to the Federal Tax Service confirming his lack of income. Additionally, you will have to draw up a 3-personal income tax declaration.

Using netting

There are many ways to sell a new apartment without tax. If a person immediately after the sale of one property plans to purchase another object, then he can use the netting of tax deductions, although the Tax Code officially does not have the concept of this method. This method is as follows:

• the seller can take advantage of a deduction of 1 million rubles, and the buyer can count on a refund of 2 million rubles;
• precisely the property deduction of 2 million rubles. can be used for netting;
• the deduction can cover the tax that you have to pay for the sale of real estate.

For example, a citizen sells his property for 2.5 million rubles. He has documents confirming that a year ago he bought an apartment for 1.9 million rubles. The amount of tax in this case is: (2,500,000 - 1,900,000)13%=78 thousand rubles. During the same year, a citizen acquires another apartment, the cost of which is 2.3 million rubles. He can take advantage of the maximumthe size of the deduction, so he gets 260 thousand rubles back for such a purchase.

At the same time, a citizen can use mutual settlement, therefore 260,000 - 78,000=182 thousand rubles. can be additionally obtained from the state. Under these conditions, the citizen will not have to pay any fee. But the purchase and sale of real estate will have to be proved using official documents.

In the same way, you can sell an apartment after an inheritance without tax. But in this case, the tax base will be increased, and you will also have to sacrifice part of your deduction. The process of selling and buying different properties must be completed within the same tax period.

Can I deliberately lower the selling price?

Many people who are thinking about how to sell an apartment without taxes prefer to use the illegal method. It consists in the fact that the seller agrees with the buyer to reduce the cost of the apartment in a formal contract. In this case, when using a tax deduction, a citizen will be able to reduce the tax base to almost zero.

This method of tax reduction has previously been used by quite a few citizens. As a result, the legislation was amended to prevent illegal reduction of the tax base. To do this, tax inspectors compare the sale price with 70% of the cadastral value of the apartment. The tax is calculated based on the highest figure. Therefore, people simply will not be able to significantly reduce the tax base. If a person is thinking about how to sell an apartment after privatization withouttax, it is desirable to use other ways to reduce the tax burden.

The tax authorities take into account the cadastral price set at the beginning of the year, when exactly the transaction was made. If for various reasons there is no information about the cadastral index, then the tax authorities will have to take into account only the price indicated in the sales contract. This condition is not used in relation to real estate that was bought by people before 2016.

Preparation of documents

Anyone should know how to properly sell an apartment without tax. After how many years can a deal be concluded? You can wait 3 or 5 years to make a deal without tax consequences. Additionally, you can use other methods of tax reduction. In some situations, it may not be necessary to pay it at all. But at the same time, you need to choose a specific method before closing a deal.

If a person has owned real estate for less than three or five years, then he must prepare a certain package of documents to the Federal Tax Service. These papers include:

• 3-personal income tax declaration, which can be easily filled out using special programs offered free of charge by employees of the Federal Tax Service;
• documentation containing information on how exactly this object became the property of a person, and it can be represented by a sale and purchase agreement, a deed of gift, a certificate of inheritance or an agreement on the privatization of an object;
• extract from the USRN confirming the transfer of rightsownership of the apartment to another person;
• if it is possible to reduce the tax base due to the difference between the purchase and sale prices, then additional documentation is transmitted containing information on how much money was spent by the taxpayer on the purchase of this object;
• if during one tax period a citizen sold and purchased real estate, therefore he wants to take advantage of mutual offset, then he prepares documents for both apartments, and also draws up an application for a property deduction.

All documentation is transferred to the department of the Federal Tax Service, located at the place of registration of a citizen.

Declaration rules

If a person sells housing before the end of the period established by law, then he, regardless of the need to pay tax, will have to submit a declaration to the Federal Tax Service. You can make it yourself or with the help of hired specialists. The following information is included in this document:

• date of property sale;
• term of apartment ownership;
• information about the requested deduction equal to 1 million rubles;
• information about the purchase price of the object, if the apartment was originally purchased for cash or with a mortgage loan;
• sale date of the object;
• calculation of tax and the exact amount of the fee, if it nevertheless becomes necessary to pay it;
• information about other co-owners of real estate, if the taxpayer was the owner of only a share of the apartment.

Calculation can be automatically performed using specialprograms that are offered free of charge by employees of the Federal Tax Service. Under these conditions, the taxpayer only needs to enter into this program the basic information about the sold housing, the requested deduction and other factors that allow the tax base to be reduced. If a person understands how to sell a donated apartment without tax, then even a year after receiving this object, there is no need to pay a fee.

Responsibility for non-payment of tax and lack of declaration

Any person, subject to certain conditions, can sell an apartment without tax. An inheritance in the form of a property must have been owned for at least three years in order to receive an exemption from the fee. If a person buys a house, then he will have to wait 5 years. If you use other methods of exemption from paying the fee, you will have to file a declaration with the Federal Tax Service. Additionally, it may be necessary to transfer a small amount to the budget in the form of tax.

If a person does not comply with the requirements of the law, then he will have to bear responsibility for violations. If the fee is not paid within the established time limits, then according to Art. 122 of the Tax Code will have to pay a fine of 20% of the amount of the payment. Even if a person, for various reasons, does not know that he is required to pay a fee, this is not a basis for exemption from liability. If he refuses to voluntarily pay taxes and fines, then bailiffs will be involved in the enforcement of funds after acceptancerelevant court decision.

When is tax due?

Almost every person wants to sell an apartment without tax. The period during which you need to own real estate depends on how the citizen received this object. But if a person urgently needs to sell his apartment, then he can use other ways to reduce the tax base. It is not always possible to rely on these methods for exemption from paying the fee, so sometimes taxpayers still have to transfer a small amount of funds to the budget.

Based on Art. 220 of the Tax Code, this procedure must be completed before the end of April of the year following the reporting one. If the payment is too significant, then the citizen can apply to the Federal Tax Service with an application for an installment plan. At the same time, it is important to prove that the financial condition of a citizen is so bad that he cannot cope with such a tax burden.

When are documents handed over?

If the term of ownership of real estate does not exceed three years, then even in a situation where you do not need to pay tax, a citizen will have to transfer certain documentation to the Federal Tax Service. It also includes the 3-NDFL declaration, confirming that the taxpayer really can not transfer any amount of funds to the state budget.

It is necessary to submit a declaration with other papers before July 15 of the year following the reporting one.

Do pensioners pay tax?

Any seller thinks about howsell an apartment without tax. Any person has to pay the fee if the legal requirements for the period of ownership are not met. It does not matter the age and financial situation of the seller. Therefore, even pensioners who are not able-bodied citizens are required to pay personal income tax when they receive income from the sale of real estate.

For pensioners, no preferential rates or other concessions apply. They must take into account the deadlines provided for all taxpayers. If for various reasons they do not have time to transfer the required amount to the budget, then they will have to pay fines or face bailiffs.

Even if the seller is a minor, the parent or guardian must still pay taxes on the seller. The same rule applies to disabled people who receive only benefits from the state. Therefore, when selling real estate, people should be aware of the tax implications of their decision.

Conclusion

Everyone wants to sell an apartment without tax. Inheritance in the form of residential real estate can be sold without paying a fee after three years of ownership. This condition applies to all objects received on the basis of gratuitous transactions. The purchased apartment can be sold without tax consequences only after five years.

There are other ways to get a tax exemption or lower your tax base. But when using them, in any case, you will have to submit a tax return and other documents to the Federal Tax Service. If the taxpayer for various reasons does not submit documents to the taxservice or does not transfer the required amount of funds in the form of tax, then the emu will have to face the negative consequences of his decision.