Mortgage apartment: how to get a tax deduction and who is supposed to

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

How do I get mortgage tax deductions? A tax deduction is a way to get back some of your own money paid to the government in the form of taxes. In Russia, there are many reasons to return part of the money: for example, mortgage borrowers receive such a deduction on a par with those who pay for housing with live finances.

How do I get mortgage tax deductions? Russians ask this question quite often.

What you need to know about buying an apartment with a mortgage?

So, a mortgage is a financial instrument that is only useful if it is properly managed. On the technical side, the process of buying an apartment on a mortgage is not at all complicated and consists of five steps:

• A person selects a suitable property that he wants to own.
• The bank and the corresponding loan program are selected.
• All necessary documentation is being prepared.
• Prepared contracts are signed.
• A deal is made and the person becomes the legal owner of the property.

For any questions related to the purchase of an apartment on a mortgage, you can always consult the bank, where experts will tell you in detail about all the intricacies of how such a transaction can be completed. The problem sometimes lies in the fact that when buying an apartment on a mortgage, many citizens make a number of strategic mistakes, which subsequently have to be corrected expensively and for a long time. Read on to find out how to claim mortgage tax deductions and who is en titled to them.

Interest Deduction

Mortgage buyers of real estate can get a tax deduction on mortgage interest and on the cost of housing. It should be borne in mind that since 2014 an amendment to the Tax Code has been in force that now interest rates are limited to three million rubles. This circumstance does not apply to those who had such a right before 2014. Thus, starting from 2014, interest deductions are limited to the specified amount.

Mortgage apartment: how to get a tax deduction and what is its size?

The maximum amount of such a deduction today is six hundred and fifty thousand rubles. That's thirteen percent of five million. Two of them are the maximum amount of the cost of the apartment, which can be presented for deduction. It is worth noting that another three million aremaximum mortgage interest. The meaning of "13%" appears here because the state every month takes away from the Russians exactly this amount of salary in the form of personal income tax.

It is worth considering this example: through a mortgage loan at a rate of ten percent and a down payment of twenty, an apartment is purchased worth five million rubles with an installment plan of thirty years. The total value of interest on the loan will be more than eight million rubles. In this situation, the amount from which it will be possible to receive a deduction under the functioning rules is five million (that is, the maximum provided for by law).

Not everyone knows how much you can get in the tax deduction for a mortgage of free money.

In this case, this amount will be 650 thousand. With cheaper housing or the most favorable mortgage terms, it will be less. When the total amount of interest paid on the loan is, for example, two and a half million rubles, then the percentage share in the tax refund is 300 thousand rubles.

We continue to understand the issue of how to get a tax deduction for an apartment in a mortgage.

What documents are needed for this?

The following documents are required to receive a tax deduction:

• Completed tax return.
• Submitting an application for a tax refund with the account details of the institution to which the applicant needs to transfer money.
• Issued certificate of income for the year for which the buyer wishes to receive a tax refund.
• Presentationcontracts for the sale of housing.
• Documentation confirming the date of registration of property rights. In cases of investment in real estate under construction under an equity agreement, an act of transfer of the apartment will be required.
• Paper that confirms payment, namely bank statements or seller's receipt (optionally notarized).
• An additional document for receiving such a deduction on interest is a mortgage agreement.
• A loan repayment schedule and interest payments under the agreement are provided.
• Certificate from the bank on the actual payment of interest for the year. Each bank provides a certificate in its own form. The main thing is that it should contain the amount of interest paid for the year in rubles.
• Documentation confirming payment (we are talking about cash receipts, receipts, payment orders, statements). Despite the fact that people submit a certificate of interest paid, the tax office will require you to attach papers confirming the payment. In the event that the documents are not preserved in the bank, you will have to take an additional account statement, from which the repayment will be visible.
• If there is joint ownership, an agreement on the distribution of the deduction is required. Notarization of such paper is not required, the personal presence of the other owner is also not necessary.

Also, in some cases, it is necessary to provide a marriage certificate. And if you have shared ownership with a child, you will need a birth certificate.

How to get a tax deduction from mortgage interest, we told. BUTwhat if there are several apartments?

Can I receive a deduction from two mortgage apartments at once?

Starting from 2014, deduction limits are determined not for a housing object (for example, for an apartment), but for a person, that is, directly for the buyer who receives it. Until now, many people believe that only the spouse for whom the property is registered can count on receiving this service. In fact, both husband and wife can apply for a property tax deduction.

In addition, it can be obtained from several apartments. True, the limit of two million rubles applies to absolutely all objects in the aggregate, in connection with this, such an innovation can cheer up only buyers of inexpensive real estate. For example, a person bought two apartments for one and a half million rubles. Previously, he could only receive a deduction from this amount, but now from two million. In some cases, it can be obtained from three apartments, each of which cost seven hundred thousand.

So, they took a mortgage: when can I get a tax deduction?

Getting options

There are two ways to pick it up. The first option is to receive a property deduction in one payment at the end of the year. The entire amount is returned through the tax office. In the process of registration in the tax, a person will need a declaration. We are talking about the form 3-NDFL for the year when the apartment was purchased. Once the documentation has passed due diligence, the applicant will receive a tax refund onpersonal current account.

On the official portal of the Federal Tax Service there is a video instruction for filling out such a declaration. There you can also find a deduction form and see approximate filling options.

The second way is registration through the employer. To do this, you should require a tax notice with a document confirming the right to a property deduction. Upon receipt of such notice, the employer will be required to pay the person income, not withholding thirteen percent of the salary until the end of the calendar year, and also to reimburse the amount withheld earlier for the elapsed months.

If you have a mortgage, getting a tax deduction, oddly enough, it will be quite easy for you: here it is only important to act correctly and wield properly collected and executed documentation.

Who is en titled to the deduction?

This right is available to all tax residents of our country with income subject to a thirteen percent rate. This service cannot be relied upon if the property was purchased from a dependent individual or in circumstances where it was paid for by an employer. In addition, apartments purchased for business purposes are not subject to tax deduction.

When can I get a mortgage tax deduction? For many buyers, refunds tend to end up in the courts. For example, there are times when one of the clients, who does not understand the nuances, submits documents for a property deduction. At the same time, the money is transferred to him, but after two years they demand to return it back. As a result, it may turn out that a person purchases housing on a military mortgage, that is, in fact, the cost could be paid by the state - this is an example of an unsuccessful deduction request.

How to get a tax deduction when refinancing a mortgage?

Mortgage refinancing, as a rule, is a change in a loan agreement or the conclusion of another agreement in order to improve lending conditions for borrowers. People usually resort to the refinancing service for various purposes. For example, this could be a reduction in monthly payments, a change in the term of the contract, or a reduction in the interest rate.

The last condition is especially relevant now, since financial structures, following the Central Bank, have been lowering rates for more than a year, and at the same time increasing the number of refinancing programs.

The current mortgage portfolio (which is about five trillion rubles), which is on the balance sheet of various banks, is formed at an average percentage of 12.5%. Mortgage lending rates have now dropped to ten percent or less since the beginning of the second half of last year. It is this decline that creates demand for all refinancing products.

Can I get a military mortgage tax deduction? Let's take a closer look at this issue.

More about military mortgages

Mechanismimplementation of state programs on military mortgage provides for the process of annual accrual of certain amounts of money to the accumulative personal account of its participants. They can be spent in the form of a down payment on the purchase of an apartment in a mortgage.

Besides this, after the purchase of this or that housing, funds continue to flow, in connection with this, loan servicing can also be carried out using them. As a result, a situation is acceptable and often occurs in practice, in which a transaction for mortgage registration and the acquisition of real estate by military personnel is carried out in full at the expense of budgetary funds without additional attraction of money directly by the borrower. Funds received from the military mortgage can be spent on the purchase of the following real estate options:

• Purchasing a residential private house.
• Purchasing an apartment, and it does not matter whether it is a primary or secondary real estate market.
• Communal apartment when it comes to the entire living space.
• Purchasing a townhouse.

Mortgage for the unemployed

Learn how to get tax deductions on a mortgage for the unemployed: is it even possible to do this?

The cost of real estate, unfortunately, is increasing every year. Despite the constant increase in prices, people regularly need personal housing. The most optimal option for buying a property is to apply for a mortgage loan, since it is far from always possible to accumulate the required amount. Any domestic bank can issue mortgage loans. At the same time, each of them has its own rules with the conditions for the execution of contracts. Many of those who are planning to purchase real estate are wondering if it is possible for the unemployed to take out a mortgage, and if such an opportunity exists, how can this be done.

So, how can you get a mortgage for an unemployed person or someone who works informally and receives his salary in envelopes? It is worth noting that a few years ago mortgage loans were available only to officially employed citizens, but today the situation has changed dramatically. An increase in the number of credit institutions leads to an increase in competition between them. For this reason, many organizations have stopped requiring proof of income from their clients.

Besides, many professions that are in demand at the moment do not at all oblige people to formal employment. In this regard, banking structures are trying to keep up with the times and are trying to be loyal to their customers, thanks to which now it is possible to take a mortgage to an unemployed person. However, credit state organizations do not issue funds without providing full documentation.

Mortgages for the unemployed can be issued by banking institutions without providing official certificates from the place of work. To obtain the required loan, today you can turn to one of the following three most common options, for example:

• Mortgages are issued to the unemployed in the event thatwhen the person who draws up the loan acts as an individual entrepreneur or conducts his own private practice. In such a situation, the bank will be satisfied with a separately provided certificate of income, which can always be obtained from the tax office.
• One of the most common options for obtaining a mortgage loan is also a guarantee. Friends and relatives can act as guarantors. Banks are provided with those documents that confirm the fact that guarantors have real estate. The downside is that few people agree to become a guarantor for another person.
• Giving payment of half of the amount of mortgage lending directly on the day of its registration. The remaining half is divided into parts that need to be repaid within a certain period.

How to get tax deductions on mortgages - the question is relevant today.

When can I get a mortgage on an apartment?

After a person has purchased an apartment with a mortgage and becomes the owner, he can get the keys and register in a new place. This must be done within one week from the date of discharge from the previous registration address. You will also need to inform the HOA about the change of ownership. And we must not forget to pay the required amount on a mortgage to a banking organization every month so that there is no delay. It happens that people miss the next payment, you should not allow this if you took out a mortgage.

How to gettax deduction, and most importantly - when?

Immediately the next year after purchasing an apartment on a mortgage, you can file a tax return and receive the corresponding deduction.