Tax deduction on property of individuals

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

Today attention will be presented to the tax deduction for property. This question interests many residents of Russia. After all, part of the expenses incurred when receiving this or that property can be returned. The main thing is to have proof of expenses with you, as well as to meet certain requirements. So what should you pay attention to first? What information should every citizen who is interested in property tax deductions be familiar with? All this will be discussed later. Understanding this topic is not as difficult as it seems. Especially if you prepare in advance for the process.

Deduction is…

The first step is to understand what a tax deduction is. It is a return of part of the money spent on a particular property (or service). There are different types. For example, they allocate social and property deductions.

An operation is a return of a certain amount of money from expenses incurred in one case or another. Property tax deduction does not apply. That is, you will not be able to get a refund for taxes. Such operations are not considered expenses as such.

When the deduction is due

Today, there are a number of cases when it is possible to return part of the money for the property of a citizen. Remembering it is not as difficult as it seems. After all, tax deductions for the property of individuals are laid:

1. When buying an apartment or property. The main thing is that the buyer has all the documents confirming the payment for housing.
2. During the construction of the house. In this situation, it is important that it is about housing.
3. For any expenses for the repair or decoration of the apartment / house where the citizen will live. Not the most common scenario.
4. If there is mortgage lending. Then you can make a tax deduction when acquiring property. The operation is carried out in relation to mortgage interest.

Nothing difficult or special about it. Accordingly, if a person buys an apartment, he has the right to return part of the money. Not always, but in most cases this is possible.

When money cannot be returned

And when it is impossible to return money for this or that property? Every citizen should know about this too. By itself, the procedure for making a deduction is not so fast and simple. Therefore, limits are important.

Tax deduction will not work if:

1. The property deduction has already been received in the maximum amount. According to the established rules, citizens can usereturn only once. But there are exceptions. In practice, they are rare.
2. The sale and purchase transaction was made with the participation of a close relative. That is, if a person buys property from relatives.
3. No formal employment. In Russia, lack of work imposes a ban on property tax deductions.
4. Employer participated in the acquisition of real estate. For example, when a citizen receives part of the money to pay for an apartment from the boss.
5. During the transaction, state subsidies or maternity capital were used.

Accordingly, almost every taxpayer can claim a tax deduction for an apartment or house. This is a common occurrence. Just be aware of some limitations.

Maximum Deductions

Which ones exactly? The thing is that you can get a tax deduction on property only once. In Russia, there is a maximum amount of money returned to a citizen. If, with one or another deduction, it turns out to be less, the missing amount can be returned through other expenses on property in the future. But as soon as the limit is exhausted, the operation will have to be forgotten forever.

Tax deductions for the property of individuals are limited to the value of the property at 2,000,000 rubles. You can return 13% of the cost of spending, but not more than 260,000 rubles. If the property is worth more than 2 million, for example 4, the return will still be 260 thousand.

Some other restrictions apply to mortgage lending. In this situation, the maximum amount from which you can subtract13% is 3,000,000 rubles. It turns out that no more than 390,000 rubles will be returned to the recipient.

Accordingly, these are the restrictions that are in force in Russia today. The tax deduction for property in 2016 is issued in the same way as before. But what is required for this? Where to go to implement the idea?

Where to contact

It's actually not as difficult as it seems. The direct collection of documents takes a lot of time, but it is much easier to find a place where you can submit an application of the established form for the return of funds for the property of an individual. No significant knowledge is required from a person.

Tax deduction for property can be issued:

• from an employer (extremely rare);
• in the tax authorities of a particular locality;
• through the MFC.

Multifunctional centers are becoming increasingly popular. And citizens rarely act through the employer. In practice, the appeal directly to the district tax authority is in demand.

How much to serve

Some are wondering how much time a citizen has to apply for a property tax deduction. 2016 is a period when serious changes took place in Russia regarding legislation. But at the same time, the changes did not affect issues related to the return of funds spent on property. This means that the same rules apply as in previous years.

ThatYes, a citizen can submit an application of the established form for a deduction within 3 years from the date of conclusion of the purchase and sale transaction. After the specified period of time, you will not be able to issue a refund.

If a repair or restoration is planned, then you can include the corresponding expenses in the cost of the property (it is important to have checks and receipts). Therefore, it is not necessary to rush to contact the tax service. But it is not worth delaying the process. It is advisable to collect a package of documents that will be required to bring the idea to life from the moment the transaction is concluded.

Documents upon purchase

Tax deductions for the property of individuals are issued only after the submission of a certain list of documents to the relevant authority. A person may be refused if some papers are not available. Therefore, it is recommended to approach the collection of the package of everything with special attention. It is also worth noting that it is better to attach copies to all documents. Their absence also sometimes entails the refusal of the tax authorities to return part of the money spent on the purchase of real estate.

If a citizen buys housing himself (without a mortgage), then the property tax deduction will require the buyer to:

• tax declaration form 3-personal income tax;
• 2-personal income tax certificate (original, taken from the employer, individual entrepreneurs draw up independently);
• identity card (passport);
• a statement of the established form for a refund;
• contract indicating the conclusion of a deal(purchase and sale);
• certificates of ownership of real estate (with a copy certified by a notary);
• acts of acceptance and transfer of property;
• payment documents (checks, receipts, statements) in the name of the applicant;
• account details where to transfer funds after consideration of the application.

Nothing difficult or special. In fact, getting back part of the money spent on property is not too difficult. The application is considered approximately 1, 5-2 months. And it takes about 1.5 months to transfer money to the specified details. But this case applies only to the independent purchase of housing, without any special features. The list of documents is subject to change. How exactly? It all depends on the situation.

Shared ownership

For example, more and more often there are cases when spouses acquire housing in joint ownership. In this situation, the tax deduction for property is still put, no one cancels it. But the list of documents changes a little. You will have to attach to the previously listed list of papers:

• marriage certificate;
• a statement establishing the definition of shares in a particular property;
• birth certificates of all minor children (if they have their own shares);
• passports for minors (from 14 years old).

If we are talking about a refund including finishing work, you will also need to bring checks and receipts for payment of certain expenses, an agreement forrepair work (if any), TIN of the payer. The last document is always best submitted.

Mortgage

But what if we are talking about a mortgage? A similar scenario is quite common in Russia today. A tax deduction for real estate acquired under a mortgage agreement will require the applicant to additionally (in addition to the previously indicated papers):

• mortgage agreement;
• certificate of withholding interest;
• certificate of payment of% mortgage.

References and extracts are provided in originals and copies. But checks and receipts must be brought only original. In fact, collecting this or that package of documents is not as difficult as it seems, if you start the process in advance.

Procedure for contacting the MFC or the tax service

Now a little about what is the procedure for applying to a particular organization in order to receive a property tax deduction for the purchase of real estate. If a person decides to independently apply to the tax authority or the MFC, he must follow the instructions:

1. Collect a certain list of documents. It will depend on the situation.
2. Make copies of papers. Certificates of ownership must be certified by a notary. Otherwise, the document will be considered invalid.
3. Fill out an application of the established form. Served in one copy, in the original. Most often filled in at the MFC or at the tax office directly.
4. Submit a package of documents to the appropriate organization.
5. Wait for a response from the tax authorities about the transfer of funds to the specified details. If the person is refused, the letter will necessarily inform the reason for the rejection of the request. You can bring the missing papers and correct the situation. The response from the tax service comes within a month from the date of submission of the application of the established form.
6. Wait until the money is transferred to the citizen's account.

That's it. This is how the tax deduction for property from citizens is obtained when they independently apply to the MFC or the tax office. But what if a person decides to use the refund directly through the employer? What is important for everyone to know about this process?

Through employer

In fact, such a step greatly facilitates the paperwork that every citizen faces before receiving part of the money spent on property. What is required from a citizen in this situation? The tax deduction for property tax will be facilitated as:

• no need to take proof of income;
• does not require a 3-personal income tax declaration;
• the application is written in a simplified form.

What should a person do next? Depending on the situation, a citizen collects a certain package of documents (the full list was presented earlier). Next, an application with papers is submitted to the tax office. As soon as a response from the relevant service is received, you can contact the accounting department with the employer with an application for a deduction, as well as with a taxnotification-approval process.

What does this method give? From the moment of filing the application of the established form, the citizen will not be subject to income tax. In other words, the employer will stop charging the citizen 13% of the salary. The process continues either until the deduction is received in the established amounts, or until the end of the calendar year. It all depends on which comes first.

As already mentioned, this scenario is not used very often. Citizens prefer to receive a tax deduction for real estate from the tax authorities, and not from the employer. This is the most common scenario.

On sale

And you can make a tax deduction when selling property. This alignment is relevant when it comes to real estate owned for less than 3 years. You can return a maximum of 250,000 rubles. It is by this amount that the maximum amount of tax paid for a transaction with:

• auto;
• non-residential real estate;
• garages;
• other items.

If we are talking about apartments, houses, cottages and rooms, then the maximum deduction is 1 million rubles. To get a refund you need:

1. Apply to the tax authority with a statement of the established form.
2. Collect and bring documents: identity card, form 3-NDFL, transaction documents.
3. Wait for deduction approval.

That's allevery citizen should know. In fact, the tax deduction for property is a right that remains with a person. He can use it at any time. But without a personal appeal, no one provides a tax deduction. Recovering personal property tax is not so difficult.