Tax deduction when buying a home with a mortgage

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

Today we will be interested in the tax deduction when buying a home. What it is? And how can you request it? To understand all of these issues and not only we have to in the article below. It's not as difficult as it seems. Especially if a person studies the legal framework.

Description

What is a tax deduction when buying a home? This is the name of the process of returning part of the money for the sale and purchase operation. Funds are given to the person who purchases the property. They are allocated by the Federal Tax Service and transferred to the applicant's bank account or card.

At the moment, a similar process is called the registration of a property tax deduction. When buying a home, a citizen can receive funds:

• for a mortgage (for the main loan);
• for interest on a mortgage agreement.

These options will be explored by us. If you do not use a mortgage, then part of the expenses will also be returned for the usual purchase of an apartment.

Terms of receipt

Tax deduction on purchasehousing in a mortgage - it's not so difficult. Especially if you understand how to act correctly under certain circumstances. According to the current law, not every citizen will be able to receive a refund. It is necessary that a person meets the following conditions:

1. Citizenship of the Russian Federation. The service is not provided to foreigners.
2. Applicant must have an official place of employment. In addition, you must pay personal income tax 13%.
3. The apartment must be registered to the applicant.
4. The money transferred for the transaction belongs to the citizen - the recipient of the return.

These are the basic rules everyone should be familiar with. There is one small exception. It applies to Russian pensioners.

Transfer of rights

Tax deduction when buying a home pensioner is also en titled. The thing is that retired citizens of the Russian Federation are allowed to use the right to transfer the return. What does this mean?

Citizen can transfer taxes paid for 3 years to the current period. This means that an elderly non-working pensioner has the right to receive a refund for another 4 years after the dismissal.

Important! Working old people will file a tax deduction in the same way as ordinary citizens of the Russian Federation.

How much will be returned

The property tax deduction when buying a home implies a refund of a certain amount. How much can be returned under certain circumstances?

In general, money is allocated 13% of the amount under the contract for the purchase of property. But there are certain limitations. No more returns:

• 260,000 rubles - for basic expenses (property deduction);
• 390,000 rubles - when applying for a mortgage.

As soon as the listed limits are exhausted, the person will not be able to claim a refund. Therefore, citizens are not always able to request a refund.

Important! The applicant is not en titled to receive more than he transferred taxes for a given period.

Where to go for help

Do they offer a tax deduction when buying a second home? Yes, and on a general basis. The applicant simply needs to act according to certain principles. It is worth talking about them in more detail. Where can I request a tax refund? Applications are currently being accepted:

• FTS;
• MFC;
• One Stop Shop.

In reality, everything is much simpler than it seems. And therefore, everyone decides for himself where exactly to send an application for a refund.

Important! The fastest service is provided by direct contact with the Federal Tax Service.

For how much you can return

The right to a tax deduction appears for citizens who purchase this or that property for their own money. In our case, we are talking about real estate, in particular an apartment.

The right to return arises immediately after making payments under the contract. But the deduction is only allowed for the next calendar year after the conclusion of the transaction.

Money can be requested no more than 3 years after certain expenses. In case ofwith a mortgage, a citizen will be able to claim the funds allocated for the loan and interest for all 36 months. There is nothing incomprehensible or difficult about this.

Quick Guide

Tax property deduction when buying a home is issued quite easily. Especially if you follow certain directions. The main troubles with the process arise mainly in the preparation of documentation for the Federal Tax Service.

Step by step instructions look like this:

1. Create a package of documentation for the implementation of the task. Previously, the applicant needs to buy an apartment for personal funds.
2. Fill out a return application.
3. Submit a request to the tax office.
4. Wait for a response from the Federal Tax Service. He will come after studying the proposed papers.
5. Wait until the money is transferred to the account specified by the citizen.

That's it. In fact, everything is not so difficult. But what exactly can be useful to citizens when making a return on a mortgage and for interest on loans?

Basic information

Let's start with the general case. The thing is that the tax deduction when buying an apartment under a mortgage agreement will provide for the presentation of various certificates. There is a mandatory list of documentation.

This includes:

• identity card;
• application for deduction;
• tax return;
• income certificates;
• recipient account details;
• USRN statement for an apartment;
• contract of sale (mortgage).

These are the main ingredients thatcome in handy when requesting any property deduction. It's time to consider the list of other documents from the applicants.

For family people

The tax deduction for the purchase of housing by spouses is issued without any problems. The main thing is to agree on who will act as the applicant. If both spouses pay for the mortgage, the money can be returned to both citizens. But this is not the most common scenario.

For couples, the following items may be useful for property recovery:

• marriage/divorce certificate;
• birth certificates for all children;
• adoption certificates.

All documents must be presented in originals only. Copies of them will also not be superfluous. There is no need to certify them.

Mortgage and return

Now let's take a closer look at the certificates that are needed during the receipt of a tax deduction when buying a home. For example, under a mortgage agreement. This is not such a difficult alignment.

When lending during the purchase of property requires:

• mortgage agreement;
• checks and receipts indicating payments have been made;
• payment schedule.

The specified documents are attached to the previously listed certificates. The absence of at least one statement will cause a lot of trouble for the family.

Loan interest

How to get a tax deduction when buying a home? This is not the most difficult task. Especially if done in advancepreparation for the process.

As we have already said, a person can easily issue a refund for mortgage interest. Moreover, the main property deduction will be spent first, then the mortgage deduction. Therefore, a lot of money can be returned. To implement the task, the applicant must take with him:

• mortgage debt repayment schedule;
• payments indicating the payment of the main loan;
• receipts for depositing funds with interest.

It's done. No extra help is needed to complete the task. Everything is extremely simple and clear. Even a novice citizen will be able to handle such an operation.

Other references

Getting a tax deduction when buying an apartment in any way involves some paperwork. It needs to be taken very seriously. Otherwise, there is no way to request money.

In addition to the components listed above, the applicant may need:

• certificate of the absence of debt for the "communal";
• family statement;
• certificates with registrations of all homeowners;
• pension certificate;
• certificate with TIN;
• work book.

Men are advised to attach a registration certificate or a military ID. Having all the documents listed will make the process much easier.

Service term

Tax deduction when buying a home with a mortgage is a rather long operation. And not everyone knows how quickly they will transfer the funds dueby law.

At the moment, the average time for consideration of an application for a refund is 1.5-2 months. You will have to wait longer if a citizen applies with an application in the established form at the MFC.

It takes about 2 more months to transfer money. Previously, funds can be transferred, but this is far from the most common scenario. On average, a person spends about 4-6 months to receive a deduction. There is no way to quickly request money and withdraw it from the bank.

Maternity capital and mortgages

But what if a citizen purchased property on a mortgage using state aid or maternity capital? This question worries many modern families.

At the moment, the right to deduct from the applicant is not taken away. But the amounts transferred at the expense of maternity capital or as a state subsidy must be deducted from the total costs of the housing purchase agreement. It is from the received figure that 13% of the deduction will be counted.

What does this mean? State aid and subsidies with maternity capital are not taken into account when calculating the tax deduction. This means that in the end, the applicant will receive less than if he paid for the transaction only from his own funds.

Can the service be denied

Is it possible to face a refusal to apply for a tax deduction when buying a home? Yes, but those options don't come up very often. And the citizen must be sure to indicate the reason for the refusal of the deduction.

Refunds are most often not provided,if:

• applicant missed the deadline for applications;
• payments under the agreement were not made from the funds of the recipient of money;
• apartment registered to third parties;
• an incomplete package of papers was attached to the application;
• certificates used are fake or invalid;
• the limit of funds for deductions of one type or another has been exhausted;
• the citizen has no official place of employment;
• the applicant does not transfer income tax in the amount of 13% to the Federal Tax Service.

If the reason is in an incomplete package of papers or in the absence of validity of certificates, it is possible to convey the missing elements within 1 month. You do not need to reapply for the deduction.

Important! If a citizen pays personal income tax in larger or smaller amounts, he will not have the right to issue a refund. The same goes for entrepreneurs.

Was the applicant denied a tax deduction when buying an apartment? This does not affect the right to re-apply to the registration authority. Therefore, the applicant will be able to re-implement it in the future. The main thing is to prepare in advance and thoroughly this time.

Sharing with shared ownership

A few words about how to behave when making a deduction when buying a home with shared ownership. This is a fairly common deal option.

Under such circumstances, each payer-owner will be returned money in accordance with his share in the property. The legislation of the Russian Federation does not provide for any other layouts.

Common Property

Tax deduction afterpurchase of housing as a joint property is made according to the principles described earlier. At the same time, spouses can indicate in the application how much and to whom to return the money.

For example, only one recipient is allowed. Or a 50/50 refund section. The joint owners must make the appropriate decision mutually. It is advisable to discuss this issue with your spouse in advance.

Conclusion

We figured out how to get a tax deduction when buying a home. This is a fairly simple task if you follow all the tips and instructions listed.

Now everyone knows how much and when he can get from the Federal Tax Service of the Russian Federation. The main thing is not to delay the preparation of documentation and regularly pay personal income tax. Lack of formal employment or income tax remittance will result in the applicant forfeiting the deduction until the situation is corrected.