List of documents for mortgage tax deduction: procedure and conditions

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

Tax deduction can be issued by any person who works officially and bought real estate. It is appointed for the purchase of residential premises or land intended for the construction of a residential building. It is paid only when certain conditions are met. You can apply for it at the Federal Tax Service or at the place of work. Funds are paid not only for the purchase of housing, but also for the interest paid on a mortgage loan. In any case, certain documents are prepared by the applicant for the mortgage tax deduction. Initially, it is advisable to receive a deduction for the cost of buying a home, and only after that apply for a relief on the interest paid.

Conditions for benefits

Most often, when buying residential real estate, citizens resort to the help of banks, so they issue a mortgage loan. It is divided into two parts, as it consists of principal and interest on the loan.

You can count on the deduction on interest paidonly on the condition that a targeted loan was issued for the purchase of a specific object. Documents for a tax deduction on a mortgage depend on whether a citizen applies for a benefit to the Federal Tax Service or at the place of work.

Who can apply?

Before you prepare documents for obtaining a tax deduction for a mortgage, you should decide whether a citizen can even count on this benefit. Citizens can count on it under the conditions:

• for them, funds submitted by personal income tax are annually transferred to the budget;
• purchased exclusively premises for permanent residence;
• if an object is issued for several citizens, then everyone can receive a deduction based on their share;
• previously, a citizen should not have exhausted the benefit;
• Spouses can independently determine in what shares the refund will be distributed.

Non-working pensioners, individual entrepreneurs working under simplified regimes or people who work unofficially will not be able to count on the deduction, since personal income tax is not paid for them.

Deduction amount

The amount of the benefit depends on various factors, which include the value of real estate and the amount of funds transferred to the Federal Tax Service in the form of personal income tax for the last year of the citizen's work. But at the legislative level there are certain restrictions:

• deduction for the purchase of housing is calculated from a maximum of 2 million rubles, so taxpayers can only receive 260 thousand rubles;
• for interest paid13% of 3 million rubles is returned, so you can get a maximum of 390 thousand rubles.

It is advisable to initially file documents for a mortgage tax deduction based on the cost of buying a home, and only after it is exhausted, collect documentation on interest paid.

Applying a basic deduction

All people who bought real estate and pay taxes can count on it. It is provided when buying an object for own or borrowed funds. It is equal to a maximum of 260 thousand rubles. You can issue it at the place of work or through the Federal Tax Service.

Most often, citizens prefer to apply specifically to the tax service, since such a solution allows you to annually receive a fairly high amount equal to the personal income tax paid over the past year.

Return on interest

If a mortgage loan is issued for the purchase of real estate, then a refund may be assigned for the interest paid. Its features include:

• documents for a tax deduction on mortgage interest must contain an extract from the bank, which indicates exactly how much money was transferred by the borrower to repay the loan;
• if the entire deduction equal to 390 thousand rubles has not been fully exhausted, then the balance cannot be transferred to future purchases, unlike the basic benefit;
• such a refund is provided only on the condition that a real loan is issued for the purchase of real estate, and not just the money received on the basis of the usualconsumer loan.

Both deductions can be issued at the place of work of the taxpayer. This method allows you to receive a salary for a long period without collecting personal income tax.

Loan requirements

To issue such a benefit is allowed only if many requirements are taken into account. They apply even to a loan received for the purchase of real estate. Therefore, a mortgage must be issued for the property tax deduction. Documents submitted to the Federal Tax Service must be proof that a targeted loan has been issued.

It should be indicated directly in the loan agreement that the funds will be directed to the purchase of housing. Therefore, the money is not given to the borrower, but is sent directly to the seller of the selected object.

You will not be able to use the benefit if the property is purchased at the expense of the state or the employer.

Standard Documents for Mortgage Tax Deductions

Initially, it makes sense to take advantage of the basic return assigned to each property buyer, regardless of where the funds for this process come from. To do this, it is important to correctly prepare the correct list of documents for a mortgage tax deduction. These include:

• passports of all property owners;
• certificate 2-personal income tax, containing information on the amount of earnings of a citizen, as well as how much money was transferred to the Federal Tax Service in the form of personal income tax for the year of work;
• statement on the form of the tax service, whereit is indicated that it is required to receive a deduction for the purchased property;
• a well-formed 3-personal income tax declaration containing data on the purchased object and owners, and it also directly calculates the deduction, and it is advisable to use special programs offered by the Federal Tax Service to compile the document, which simplifies the process of calculating and filling out the declaration;
• payment documents confirming that the necessary funds were transferred to the real estate seller, and they can be represented by bank statements, receipts and other papers;
• loan agreement;
• document confirming that the right to real estate was issued to the buyer, and for this, a registration certificate or an extract from the USRN can be used;
• mortgage payment schedule;
• if an interest deduction is requested at the same time, then an additional certificate containing information on how much interest was paid by the applicant is taken from the bank.

FTS employees may request additional documents. They depend on the features of lending and the purchased object.

If a commercial property is purchased, which is immediately transferred to the housing stock, the return is still not assigned.

The nuances of getting an interest deduction

Many people have to turn to banks to buy a home. In this case, they can count not only on a basic return, but also on a mortgage interest benefit. The documents,required for the tax deduction on interest are represented by the following securities:

• a statement indicating that the taxpayer is claiming a deduction for interest paid;
• Declaration 3-personal income tax, which indicates how much money was transferred to the bank in the form of interest;
• 2-personal income tax certificate, with which you can understand the maximum amount of money an applicant can receive in a year of work;
• loan agreement drawn up with a certain bank;
• payment documents confirming payment of interest;
• schedule on the basis of which the debt to the bank is repaid;
• an extract from a banking institution, which states how much was paid as interest.

It is advisable to collect all documents immediately before contacting the Federal Tax Service, so they must be relevant at the time of contacting this organization. A complete list of documents for a mortgage tax deduction can be found only in the regional branch of the Federal Tax Service. Usually no additional paperwork is required, but it is not uncommon for tax officials to suspect fraud, which can only be eliminated with the help of additional paperwork.

What do you need for fractional ownership?

Most often, mortgage loans are issued by young people who are officially married. When registering housing, shared ownership is selected, so when applying for a deduction, you will needadditional papers:

• passport owners;
• marriage certificate between citizens;
• if people distribute the refund on their own, then a statement is drawn up from them, which indicates in what shares they will receive the benefit;
• documents for minor children.

Many people prefer to distribute the deduction themselves. It is relevant to issue a benefit to a citizen who receives a high salary and works officially. Therefore, the application for the distribution of benefits is included in the documents. The tax deduction for a mortgage apartment in this case is provided only to one borrower.

Nuances of filing documents

Most often, citizens prefer to apply for benefits from the Federal Tax Service, since in this case you can count on large amounts of funds transferred to the account annually until the deduction is completely exhausted. Therefore, you should figure out how to apply for a tax deduction on a mortgage. What documents are required? The main list is given above, but you can find out exactly about the list of documentation directly at the regional branch of the Federal Tax Service.

The rules for submitting documents include:

• they can be handed over personally to a tax officer, sent by mail or even use electronic communication channels for these purposes;
• documents are prepared in duplicate, as this will allow the applicant to have papers marked with the date of acceptance, so if the consideration period is delayed, the existing documents will become the basis for filing a claim;
• serveDocumentation is possible for three years of work after the purchase of real estate, which will allow you to get a really large amount of funds at a time;
• FTS employees are given only two months to check documents, after which funds are transferred to the bank account indicated by the citizen in the application for another month.

Often, when drawing up an application, citizens forget to indicate the amount of the account in it. In this case, they are called to the employees of the Federal Tax Service to the department to indicate these details.

How to write an application correctly?

It is important to properly prepare a list of documents for the tax deduction. Mortgage interest is returned only when all requirements are met. Therefore, it is important to correctly draw up an application containing the following information:

• given the name and code of the Federal Tax Service, where the documentation is submitted;
• indicate information about the applicant, provided by his full name, place of work, registration address and contact details;
• return conditions are prescribed, as well as the method by which the money will be received by the applicant;
• all documents attached to the application are listed;
• indicate the account number where the money will be transferred.

You can compose this document on a computer or on paper.

Procedure for obtaining benefits

Almost every real estate buyer thinks about how to get a tax deduction for a mortgage, what documents are needed for this process, andas well as the procedure. The most difficult moment is the collection of the necessary documents. The direct procedure for obtaining benefits through the Federal Tax Service is divided into stages:

• an apartment is selected for purchase;
• a mortgage loan is being issued for the purchase, and it is important to make sure that the selected loan is targeted;
• the down payment is transferred;
• interest is paid for the use of borrowed funds;
• all payment documents are kept by the borrower, as they will be required in the future in the process of applying for benefits;
• Next year you can already prepare documents for a tax deduction on mortgage interest or on a standard return;
• the collected documentation is transferred to the department of the Federal Tax Service;
• Verification takes two months, after which funds are transferred to the bank account specified in the application within another month.

If you know in advance what kind of documentation is required, then there will be no difficulties with obtaining benefits.

The nuances of applying to the employer

According to the law, you can apply for a refund not only directly to the Federal Tax Service, but this benefit is also issued at the place of employment. The procedure is facilitated by the fact that it is necessary to collect the necessary documents only once.

A preliminary application with documents for an apartment is submitted to the Federal Tax Service in order to obtain a certificate confirming that the citizen is really en titled to a specific amount of return. This certificate with other papers is transferred tothe accounting department of the company where the citizen works. Starting next month, wages will be paid without levying personal income tax until the deduction is exhausted.

Conclusion

The deduction can be issued not only for the purchase of housing, but also for interest paid to the bank if a mortgage loan was used to purchase real estate. The registration procedure requires the preparation of certain documentation, the full list of which can be clarified at the department of the Federal Tax Service.

Each borrower chooses whether the refund will be issued at the tax office or at the place of his employment.