Tax deduction for apartment renovation: calculation and registration procedure, documents, expert advice

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

A tax deduction is a refund of some of the previously paid income tax. The largest and most significant is the return made when buying a property. It is called property, and is appointed both for the purchase of an apartment, and for the purchase of houses, land plots or rooms. Additionally, it is possible to issue a refund for the interest paid on the mortgage. Those who purchase housing without repair can count on a tax deduction for apartment renovation. It is provided if the value of the purchased object is less than 2 million rubles.

The concept of property deduction

Property deduction is a return of personal income tax, and its main features include:

• assigned when buying and renovating real estate;
• maximum return of 13% from 2 million rubles, so each citizen can receive 260 from the statethousand rubles;
• if housing costs more than 2 million rubles, then it will not work to get a tax deduction for apartment renovation, since the benefit will be used in full;
• you can use it once in a lifetime;
• balances carry over to future purchases;
• the amount of payment per year is limited to the amount of personal income tax transferred to the budget for the last year of work, so usually you have to contact the tax service for several years to receive the entire amount;
• you can issue a deduction at the Federal Tax Service or at the applicant's official place of work;
• PIT is returned for repair work only if there is evidence of spending on certain materials and work.

The procedure for obtaining this benefit is considered simple and prompt, so many citizens respond positively to this measure of state support.

Who can receive?

Before you apply for a tax deduction for apartment renovation, you should make sure that the citizen has the right to receive such benefits. To do this, the following conditions must be met:

• there is evidence of the purchase of residential property (house, apartment or even a private room);
• the citizen is officially employed, so the employer pays personal income tax for him every month;
• it is not allowed for the deduction to be fully exhausted before;
• housing should not be bought at the expense of maternity capital, other state funds or with the support of the employer.

Under these conditions, you canapply for benefits.

Design methods

The tax deduction for the repair of an apartment, as well as a refund for the purchase of housing, can be issued at the place of work of a citizen or when contacting the Federal Tax Service.

In the first case, it is enough to prepare the necessary documents only once, after which the citizen will receive a full salary without levying personal income tax until the refund is fully spent.

What expenses are deducted for?

When calculating the maximum benefit amount, the following is taken into account:

• the amount paid to the seller for the purchase of real estate;
• renovation costs, which can be capital or cosmetic;
• costs associated with the purchase of building materials;
• spending on salaries of specialists hired to repair;
• purchase of a land plot, on which it is planned to build a residential building;
• Mortgage interest costs.

Not only people who bought ready-made real estate, but also those who independently built a private residential building can count on a refund.

All the above costs are summed up, after which the deduction is determined, equal to 13% of the amount received. If it is more than 2 million rubles, then the maximum benefit is assigned, so the applicant can only receive 260 thousand rubles.

Before returning the tax deduction for the repair of an apartment, it is important to determine what documents are required for this, what work was actually carried out, and whether the apartment was purchased on a primary orsecondary market.

Buying a home in a new building with a rough finish

These apartments are most often offered by developers. Such living spaces are represented by ordinary concrete boxes, in which communications are laid and windows are installed. All other work has to be done by future property owners.

To repair an apartment, citizens have to spend a really large amount of money. To apply for a tax deduction for the renovation of an apartment in a new building, the following rules are taken into account:

• in the contract of sale or DDU it must be indicated that the object is being sold without cosmetic finishing;
• an act confirming the transfer of the object to the buyer is submitted to the Federal Tax Service;
• property owners should correctly draw up a special list of costs that were incurred in the process of buying building materials or paying for the work of a repair team;
• each item of the above list must be confirmed by official payment documents;
• if the object is acquired by several persons (as a result of which each owner has a share in the property), then each of the owners can count on a deduction depending on the available part of the apartment;
• if the buyers are spouses, they can write a statement on the basis of which only one of them can issue a deduction.

The easiest way to get a refund for repairs is when buying a home in a new building. before receivingtax deduction for apartment renovation, it is necessary to prepare a lot of documents that confirm the expenses incurred.

Purchasing an apartment in a new building with partial finishing

In this case, certain difficulties may arise in obtaining benefits. This is due to the fact that the DDU or the contract for the sale of the object indicates that the property is being sold with finishing.

It is allowed to issue a deduction only if the contract drawn up lists all the finishing work performed by the developer, but it is indicated that it is required to complete the work by performing cosmetic repairs. In this case, the costs of purchasing materials and paying for the services of employees can be compensated.

If the buyer is not satisfied with the existing finish in the property, then even if he completely changes it, he will not be able to compensate for the cost of repairing the apartment. The tax deduction is assigned only to involuntary expenses.

When drawing up an act of acceptance of an apartment, it is advisable to ask that this document contain information about the need for additional work.

Purchasing an object on the secondary market

Even buyers of real estate in the secondary market are thinking about the possibility of obtaining benefits. This market usually sells refurbished apartments, so buyers don't have to spend money on refurbishment.

Even if buyerswant to change the appearance of the apartment on their own, they will not be able to claim a tax deduction for the renovation of the apartment.

Sessary housing may be an apartment in a new building, which is sold by a citizen after receiving it from the developer, in this case there may be no finishing. In order to receive a benefit under such conditions, it is necessary to indicate in the contract that the object is being sold without finishing. With such an agreement, you can expect to receive a refund.

Which jobs are tax refunded?

Before you apply for a tax deduction for the renovation of an apartment, you should figure out for what work and materials the tax is refunded. These include:

• purchase of materials for construction or decoration, and all these purchases must be confirmed by official documents;
• payment for construction work, which includes budgeting, laying down utilities, forming an extension, using plaster for walls or ceilings, leveling floors, and other work related to finishing or finishing repairs to residential premises.

When transferring various papers to the Federal Tax Service, it is important to make sure that they list all the materials purchased and the completed work on finishing the premises.

What documents are required?

The tax deduction for apartment renovation is provided only upon transfer of the necessary package of documents to the Federal Tax Service. These include:

• correctly composeda statement indicating the issuance of a refund for repairs in the purchased premises;
• declaration in the form of 3-personal income tax, containing information about the previously received deduction for the purchase or construction of an object;
• certificate of income for the year of work, allowing you to understand how much funds in the form of personal income tax was transferred to the budget for a citizen by his employer;
• title documents for an object, which include a sales contract, DDU or other papers;
• copy of applicant's passport;
• TIN of a citizen;
• payment documents confirming expenses for various building materials or work for finishing the premises;
• extract from the USRN confirming that the applicant is the owner of the apartment or some part of it;
• if the owners are spouses, they can additionally draw up a statement on the basis of which they independently distribute the deduction among themselves.

The above documentation must be submitted to the FTS department annually, after which the required amount of funds equal to the paid personal income tax for the year of work will be transferred to the applicant's account. The process is repeated until the benefit is completely exhausted.

Declaration rules

A declaration for a tax deduction for materials for repairing an apartment can be submitted by visiting the FTS branch in person, as well as using a trustee or by filling out a special form on the official website of the FTS.

If a citizenthere is a correctly registered and confirmed personal account on the State Services portal, then this procedure can be performed through this resource. But for this, you will have to scan the necessary documents in advance, and then upload them to the site.

If there are errors in the documents, this may be the basis for refusing to transfer benefits. The same applies to the situation when the title documentation does not contain information that the object is being sold without finishing.

Conclusion

The deduction can be issued not only for the purchase or construction of real estate, but also for repair work in residential premises. Homebuyers need to figure out in which cases a renovation benefit is assigned, as well as what documents are required for this. If a property is bought on the secondary market with finishing already done, then no refund is given for repairs.