Limits on most tax deductions (for education, for treatment, etc.) are established only within one calendar year: each calendar year the “limit” is reset, and the deduction can be received again. In contrast, the property deduction when buying a home contains more serious restrictions: both the maximum amount of the deduction and the number of times it can be used during one’s lifetime are legally limited.
Until 2014, there were restrictions according to which tax deductions for housing purchase expenses and loan interest could be obtained only once in a lifetime and only for one housing property. Since 2014, the deduction was allowed to be received for several residential properties, but the new rules were allowed to be applied only to new transactions (concluded after the entry into force of the new law). In this regard, many questions arose: in what cases what deduction restrictions apply? If you used the deduction earlier, in what cases can you “receive” it when purchasing a new home? Is it possible to get a deduction for credit interest if you previously only used the deduction for the purchase of housing?
In this article we will try to answer all these questions.
Please note: The key factor on which the property deduction limits depend is the date of purchase of the home for which you receive (or want to receive) the deduction. The “date of purchase of housing” for the purposes of this article should be considered: - the date of registration of ownership of housing according to an extract from the Unified State Register of Real Estate when purchasing under a sales contract; — the date of the transfer deed when purchasing housing under an agreement of shared participation in construction.
Deduction limits for housing purchased before January 1, 2014
If you purchased housing before 2014 and received (or plan to receive) a property deduction for it, then the “old” rules apply to you, according to which the deduction can be obtained strictly only for one property (paragraph 27, paragraph 2, paragraph 1, art. 220 of the Tax Code of the Russian Federation as amended, valid until 01/01/2014) and in an amount of no more than 2 million rubles. (260 thousand rubles to be returned). Moreover, even if you received a deduction less than the maximum amount, you will not be able to receive it additionally when purchasing another home.
Example: In 2008, Levashov I.I. bought an apartment for 500 thousand rubles. and received a tax deduction for it (returned 65 thousand rubles of taxes paid). When purchasing an apartment in 2021, Levashov I.I. will not be able to use the deduction again, since until 2014 the property deduction was provided only once for one housing property
The credit interest deduction for housing purchased before January 1, 2014 had no restrictions on the amount (you could return 13% of all mortgage interest paid), but it could only be received on the same property for which you received the principal deduction (deduction for purchase expenses). This is due to the fact that until 2014, the main property deduction and the interest deduction were not separated and constituted a single type of deduction (Article 220 of the Tax Code of the Russian Federation, as amended, valid until 01/01/2014).
Example: In 2012, Ivanchenko A.A. I bought an apartment and received a tax deduction for it. In 2013, Ivanchenko bought another apartment with a mortgage and wanted to get a deduction on loan interest. The tax office legally denied him the deduction, since for housing purchased before January 1, 2014, the main deduction and interest deduction could only be received for a single housing property.
However, it is worth noting that if you purchased a home before January 1, 2014 and only took advantage of the deduction for purchase expenses, then you can receive a deduction for credit interest on other housing, but only if it was purchased after January 1, 2014. We will look at this situation in detail below in the section - Is it possible to get a deduction for credit interest if you previously only used a deduction for purchase expenses?
Simplified receipt of property and investment deductions
What to follow
A simplified procedure for obtaining investment and property tax deductions (for the purchase of housing, payment of interest on a mortgage and the amount of money deposited into IIS) from May 20 (21), 2021, is regulated by a new article. 221.1 Tax Code of the Russian Federation. As for social deductions for training, treatment and voluntary insurance, the rules about them have simply been clarified.
The new procedure applies to deductions, the right to which arose for an individual from January 1, 2020 . That is, the norms of Art. 221.1 of the Tax Code of the Russian Federation have retroactive effect (Federal Law dated April 20, 2021 No. 100-FZ).
Statement
To receive deductions in a simplified manner, you need to submit an application.
The filing deadline is at the end of the tax period (calendar year), no more than 3 years preceding the year of filing the application.
The condition for providing deductions in a simplified manner is that the tax authority has information about the income of an individual and the amounts of tax calculated, withheld and transferred by the tax agent to the budget. These are calculations in Form 6-NDFL and income and tax certificates submitted by the employer(s) for the relevant periods.
To receive a deduction for depositing money into an IIS, the tax authority must have information confirming that the payer has transferred funds to this account. They are reported by the tax agent.
In the application for a refund, you must indicate the details of a bank account opened by an individual (not to be confused with the number on a bank card).
The application is filled out and sent through the taxpayer’s personal account in the format approved by the Federal Tax Service of Russia.
The very possibility of receiving a deduction in a simplified manner will be indicated by an automatically pre-filled application for deduction in your personal account on the Federal Tax Service website, generated based on the results of a 20-day verification of information received from the bank. There you can also track the process of receiving the deduction - from the moment you sign the pre-filled application until your personal income tax is returned.
Thus, before the pre-filled application appears in your personal account, no action is required from the taxpayer.
Please note that a new approach has been in effect since 2021: the right to a property deduction arises from the moment of state registration of ownership, and not from the moment of receipt of a document (certificate) for the object.
As a general rule, other documents are not needed to obtain property and investment deductions in a simplified manner. As part of the exchange of information, the tax office receives the necessary and up-to-date information from tax agents, banks, and Rosreestr. The list of participating banks will be updated in a special section on the Federal Tax Service website.
Application processing time
First, the tax authority, based on available information, places data in your personal account (PA) for automatically filling out an application or sends a message through it about the impossibility of obtaining a tax deduction in a simplified manner, indicating the reasons within the following time frame:
- no later than March 20 of the year following the expired tax period - in relation to information submitted by the tax agent or bank before March 1;
- within 20 working days after the day of submission of information - in relation to information submitted by a tax agent or bank after March 1 of the year following the expired tax period.
A desk audit of an application is an analysis by tax authorities of compliance with the requirements of Art. 221.1 of the Tax Code of the Russian Federation and other conditions for obtaining tax deductions. As a general rule, it lasts 30 calendar days from the date of filing the application.
The period for checking an application for deductions can be extended to 3 months if, before its completion, the tax authority establishes signs indicating a possible violation of tax laws. Such a decision will be reflected in your personal account within 3 days from the date of adoption.
If an application (several applications) and a 3-NDFL declaration are submitted simultaneously for one tax period, a desk audit in relation to each document begins from the date of registration according to the order in which they are sent to the tax authority.
Decision on the application
| IF NO VIOLATIONS | THERE ARE VIOLATIONS |
| The tax authority makes a decision on granting a tax deduction within 3 days after the end of the audit. | The tax office makes one of the decisions under Art. 101 Tax Code of the Russian Federation:
And also one of the solutions:
|
The law does not provide for the opportunity to provide explanations or make appropriate corrections to the deduction application.
The remainder of the property deduction can be used in a simplified manner.
Return of deduction
If there is arrears of personal income tax, other taxes, arrears of penalties and/or fines, the tax authority independently offsets the amount of tax to be refunded in connection with the provision of a tax deduction. The deadline for making such a decision is 2 days after the day the decision was made to grant the deduction in whole or in part.
sends it to the territorial body of the Federal Treasury within 10 days He, in turn, makes a refund within 5 days .
KEEP IN MIND
If the deadline for returning the deduction is violated, from the 16th day after the decision to provide it is made, interest is accrued at the Central Bank refinancing rate that was current on the days the return deadline was violated.
Cancellation of the deduction decision
A tax agent or bank can provide updated information leading to a reduction in the amount of tax returned to an individual in connection with the provision of a deduction. Then the Federal Tax Service within 5 days makes a decision to cancel in whole or in part the decision to provide a deduction in whole or in part.
Within 3 days, such a decision with the amount of tax and/or interest to be refunded by the individual is posted in your personal account.
The excess received as part of the deduction must be reimbursed to the budget within 30 calendar days from the date of sending the specified decision through your personal account.
KEEP IN MIND
Interest is charged on amounts that an individual must repay at the Central Bank refinancing rate during the period of using budget funds. This occurs from the date of receipt of money in the account or the date of the decision to offset until the date of the decision to cancel the deduction.
In case of non-payment or incomplete payment within 30 calendar days , a request for payment of tax and/or interest will be sent to your personal account within 20 days If you ignore it, the tax office will launch a collection procedure under Art. 48 Tax Code of the Russian Federation.
If the taxpayer’s access to his personal account is terminated, the Federal Tax Service will send documents by registered mail.
Deduction limits for housing purchased after 2014
Since January 1, 2014, significant changes have been made to the Tax Code of the Russian Federation, according to which, if the tax deduction for the purchase of an apartment/house is not received in the maximum amount (i.e. from an amount less than 2 million rubles), then the remainder can be received when purchasing other housing properties (paragraph 2, paragraph 1, paragraph 3, article 220 of the Tax Code of the Russian Federation).
Example: In 2021 Ukladova T.I. I bought a room for 500 thousand rubles. and received a property deduction (returned 65 thousand rubles). In 2021, she bought an apartment for 3 million rubles. Ukladova T.I. will be able to receive an additional property deduction for the purchase of an apartment in the amount of 1.5 million rubles. (to be returned 195 thousand rubles).
New rules also began to apply to the deduction for credit interest on housing purchased after January 1, 2014:
- the deduction for credit interest is not related to the deduction for expenses for the purchase of housing and can be obtained for a separate object;
- The maximum deduction for credit interest is 3 million rubles. (to be returned 390 thousand rubles);
- unlike the deduction for expenses for the purchase of housing, the deduction for credit interest can be received only once in a lifetime for one property;
Example: In 2021 Panyukov E.I. bought an apartment worth 8 million rubles. To buy an apartment, he took out a mortgage in the amount of 6 million rubles. (on which he will pay interest in the amount of 3.5 million rubles) Panyukov E.I. will be able to receive a basic property deduction in the amount of 2 million rubles. (to be returned 260 thousand rubles), as well as an interest deduction in the amount of 3 million rubles. (to be returned - 390 thousand rubles).
Example: In 2014, Epifanova T.K. I bought an apartment and received a property deduction for purchase costs. In 2017, she bought a new apartment with a mortgage and will be able to receive a deduction for the loan interest paid.
Example: In 2014, A.A. Cherezov I bought an apartment worth 1 million rubles with a mortgage. Cherezov A.A. received a deduction for purchase expenses and a deduction for credit interest. In 2021, he purchased another apartment worth 3 million rubles. (also using credit funds). Cherezov A.A. will be able to receive an additional deduction for purchase expenses (since he did not use it in full), but will not be able to receive an additional deduction for credit interest, since it is provided only for one property.
Features of simplified receipt of social deductions
With deductions for training, treatment and contributions to voluntary life insurance, the procedure is somewhat different. According to the new version of Art. 219 of the Tax Code of the Russian Federation, to obtain them you need not only an application to the tax office, but also supporting documents .
The application and documents can be submitted in 3 ways:
- in writing;
- electronically via TKS;
- through your personal account on the Federal Tax Service website.
The period for consideration of the application is 30 calendar days from the date of submission. At the same time, the tax office reports via the personal account the results of the review, and also provides the tax agent (and not the payer, as now) with confirmation of the right of the individual (employee) to receive social benefits. Naturally, a negative outcome is also possible when it is revealed that there is no right to such a deduction.
Receipt of deductions before January 1, 2001 is not taken into account
In conclusion of the article, we note that until 2001, the property deduction was provided on the basis of the Law of the Russian Federation of December 7, 1991 N 1998-1 “On personal income tax.” This law became invalid on January 1, 2001. Therefore, if you claimed a property deduction and all payments on it were made before January 1, 2001, then you can assume that you did not use the deduction . When purchasing another home (after January 1, 2001), you can again receive a property deduction (Letters of the Ministry of Finance of Russia dated February 13, 2014 N 03-04-05/5889, dated July 24, 2013 N 03-04-05/29229).
Example: In 1998, Klestova Y.F. I bought an apartment. In 1999 and 2000, she submitted 3-NDFL returns to the tax office and received a full property deduction. In 2013, Klestova Ya.F. I bought an apartment again. Since she received the full deduction before January 1, 2001, when purchasing an apartment in 2013, she will be able to take advantage of the property deduction again (according to the rules of Article 220 of the Tax Code of the Russian Federation).
Example: In 1999, Ezhov N.N. bought an apartment. In 2000, 2001, 2002 and 2003, he applied to the tax office to receive a property deduction. In 2021 Ezhov N.N. bought a second apartment. Since part of the deduction payments was made after January 1, 2001, N.N. Ezhov can receive a property deduction for an apartment purchased in 2021. can not.
If you have not yet purchased a home, we recommend our partner’s site-guide, APARTMENT-Bez-AGENTA.ru. This is an educational site for those who want to understand the rules for buying and selling apartments.
Where to begin?
First you need to determine how you want to receive the deduction.
There are two ways:
- one-time, for the entire amount of personal income tax paid for the previous period;
- monthly, without withholding personal income tax from income.
Let's take a closer look at the first method of obtaining.
Technical capabilities allow us to send all the necessary documents without leaving home. To do this, we gain access to the taxpayer’s account on the official website of the Federal Tax Service.
If you have a confirmed account on the State Services resource, then you can access the taxpayer’s account through this account.
Go to the main menu of your personal account, select the “Life Situations” menu. Here we select “Fill out the 3-NDFL declaration” - one of three options:
- fill out a new declaration online;
- send a declaration previously filled out in a suitable program (for example, in 1C);
- download the program for filling out the declaration.
In my opinion, the best option is the first one, since it allows you to fill out the 3-NDFL declaration without having any special education and with a minimum of labor costs. Filling out the declaration online will take no more than 30 minutes.
Tax benefits for pensioners when buying an apartment: legislative acts
To understand the legal framework on this issue, it is important to study the tax code. Here are the categories and methods of reimbursement of payments in the form of discounts on tax obligations.
The legislative texts (TC and its explanations) also indicate how personal income tax compensation is made when purchasing real estate - land or a residential property.
Current changes in regulating this issue are partially reflected in a special letter from the Ministry of Finance of the Russian Federation, registered in 2014. There is information that will be useful on this issue in the letter from the fiscal service. This document, dated 2013, examines in detail the features of the legal basis for compensation for the formation of reverse payments for taxation of individuals.
Some essential details for the issue under consideration are contained in the general legislative framework on taxation. The lists of information required for refunds are also specified there.
Individual entrepreneur real estate and tax deduction
With regard to real estate, entrepreneurs can apply the deduction when purchasing not only apartments, but also country houses and land plots. The legislation also provides for the opportunity to receive a deduction for the construction of country cottages, but only if all costs for paying workers, purchasing materials, etc. can be documented, therefore all receipts, sales and cash receipts, contracts must be collected and stored. When purchasing newly built housing (primary market), the tax deduction can be extended to funds spent on repairs and decoration of the purchased apartment.
What documents are required for a pensioner to make a deduction?
The list of documents for tax deduction consists of a set of property and financial data, sealed by a notary, state registrar and presented to the tax service.
A refund of 13 percent of the real estate transaction is possible upon presentation of the purchase/sale agreement. A fully completed personal income tax declaration form is also required for submission to the tax authority.
In order for a pensioner’s tax deduction to be fully processed, confirmation of the applicant’s personal data will be required in the form of a copy of a passport or other document. If a non-internal passport of a Russian citizen is used, it must 100% reliably identify the applicant as a citizen of the Russian Federation with residence at a specific address. This is necessary to check documents for registration of real estate and reconcile data on receipts from the enterprise or the citizen himself before receiving a deduction.
The application must indicate that the citizen is asking to reduce obligations to the state in the amount of the required 13% of the cost of the object.
What if the purchased apartment is sold again?
A situation may arise when an individual entrepreneur purchases real estate, submits documents for a tax deduction, and then sells the apartment. It's not illegal. Moreover, even if this action was taken before the deduction amount was exhausted, it is legal. Everything that its owner does with real estate after purchase no longer concerns tax payments. The deduction will be provided until the amount is completely exhausted.
Based on the information above, we can summarize that an individual entrepreneur, in principle, can receive a tax deduction. However, for this it is necessary that it meet certain parameters, the main one of which is the businessman’s payment of personal income tax (13%). To do this, you can use two options: either apply the general taxation system in your activities, or find a part-time job that will generate additional income subject to personal income tax.
