Inflation rates once again prove that keeping savings in cash is not profitable, so many citizens who have the opportunity to make such a purchase buy real estate. It is far from uncommon for the owner to have not one, but two (and sometimes more) real estate properties, in one of which the owner lives, and uses the other living space for rent. The following article will discuss what the tax on a second apartment in property will be in 2021.
Changes in tax legislation
The reforms that took place in the tax system in 2021 have been brewing for a long time, but citizens will fully feel them only five years after the adoption of changes to the legislation. From 2021, property tax is calculated in a new way. So, if previously property owners paid a tax, which was calculated based on the BTI valuation, now a fundamentally new value is taken for calculation - the cadastral value. The cadastral valuation of housing is close to the market value, and sometimes can exceed the real market value by several times. In this regard, many citizens are concerned about what property tax will be applied, especially if there are several properties. But representatives of the competent authorities, explaining the provisions of the Tax Code of the Russian Federation regarding innovations, are in a hurry to reassure: firstly, citizens will be able to fully experience the reform only in 2021, secondly, special deductions will be introduced to reduce the amount, and thirdly, by Preferential categories of citizens will continue to be exempt from paying taxes.
Property ownership tax
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Tax on the sale of an apartment owned for less than 3 years
The tax period in this case is a calendar year. The tax payment deadline is the entire next calendar year. The amount in question here is indicated in a special tax notice sent to the owner by the tax office. Of course, if for some unknown reason the tax notice has not arrived, this cannot in any case be considered an exemption from paying property taxes. If this happens, you need to contact the tax office and find out this situation.
What are the payment rates? Before we talk about them, we need to clarify one important circumstance. Taxes are calculated based on the cost of the apartment. But this concept contains some uncertainty. At the everyday level, the value of real estate usually means market value. However, it is quite difficult to determine and, moreover, it can change quite significantly over time. If this was exactly what was needed, you would have to order a rather expensive service from a professional real estate appraiser each time before paying the appropriate tax. In practice, this price is not used.
As you know, the BTI - the technical inventory bureau - for a long time had its own price for housing, significantly lower than the market price. Moreover, the difference could be quite large. If taxes are calculated from it, they will turn out to be significantly underestimated. As you know, according to the law, real estate must be registered in the Unified Register of Real Estate Rights, and for this you will definitely need to obtain a cadastral passport. One of the important parameters that will be reflected in this document is the cadastral price. How is it usually formed? At some intervals, the property is revalued in order to determine the current market price. Then, for several years (usually five years), the cadastral value does not change and is considered constant. The market price can either increase or decrease.
Thus, it is clear that the cadastral value is closer to the market price than the price reflected in the BTI documents.
Legislators decided that over the course of five years, the price of real estate, which is used to calculate the tax, will increase in equal shares until it becomes equal to the cadastral value. This already took place when calculating the tax for 2010.
Now about the tax rate. The price of an apartment calculated in the above manner is considered during the calculation. It is compared with the amount of 300,000 rubles:
- if the apartment is more expensive, the tax rate will be 2%;
- if it is cheaper, then the tax is much lower - it corresponds to 0.1% of the cost of housing.
This is how taxes are calculated in most cases, but not always. When calculating the amount, benefits must be taken into account. We are talking about two options for relief for payers.
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Tax calculation when selling an apartment
- There is a certain number of meters that are excluded from the tax calculation.
- There are certain categories of citizens who are completely exempt from paying it.
Tax payment is calculated in exactly the same way not only for the first, but also for each of those apartments that are owned.
Taxes on a second apartment
The purchase and sale transaction of an apartment is subject to taxation, however, the payment of the tax payment falls entirely on the shoulders of the seller, and the buyer, on the contrary, acquires a certain benefit in the form of a tax deduction. Unfortunately, a person can only count on receiving a tax deduction once, so it will not be possible to receive benefits from purchasing a second living space, unless the right to receive a deduction when purchasing real estate was not exercised. That is, citizens can use the right to receive a deduction when purchasing living space only once, and it does not matter whether we are talking about purchasing the first apartment or purchasing subsequent apartments. The annual tax taxes on real estate for owners themselves will depend on the specific cadastral value of the property, and it does not matter whether this property is the owner’s first or second.
Where can a second apartment come from?
Many citizens need improved housing conditions. In order to fulfill your desire, sometimes you have to take out loans and subsequently pay them off over many years. Many people have only one place to live. However, sometimes a person owns not only one apartment or house, but also owns other real estate. How can this happen? There could be a variety of reasons for this.
Here are some of them:
- Sometimes a second home comes as an inheritance. At some point, a person becomes the owner of two apartments. At the same time, it is especially important to determine for yourself what he plans to do with it in the future.
- Another important motive may be purchasing real estate in order to find the best form for storing your savings.
- An additional apartment can sometimes be seen as an opportunity to make a profit. In this capacity, a second home can be much more profitable, for example, than a bank deposit.
Having several apartments, it is important to pay for them on time and in full. To do this, you need to understand the mechanism for their calculation.
How will the calculation be made?
Owning a living space implies an annual deduction to the tax authority of a certain amount, which until 2021 was calculated on the basis of the old inventory value of housing. From 2021, citizens will receive new payment receipts, which will reflect the value increased by 20% between the difference between the previous and new rates. The annual twenty percent increase will occur until 2021, when the new tax rate will be applied in full on real estate, including the tax on the second apartment in the property. For apartments the following rates will apply:
- 2% if the cadastral value of housing exceeds 300 million rubles.
- 0.1% if the cost is below 300 million rubles.
The calculation will be made using certain benefits, which will be taken into account for each individual housing, if 2 apartments are owned. Benefits, in accordance with Art. 403 of the Tax Code of the Russian Federation, are square meters that will not be taken into account when calculating the total housing tax:
- For apartments, regardless of the total area - 20 square meters.
- For rooms - 10 square meters.
For example, the total housing area is 52 square meters. According to the cadastral valuation, 1 square is equal to 50,000 rubles, while 20 square meters are not subject to taxation, accordingly, the formula by which the calculation will be made will look like this:
(52*50000)-(20*50000)*01%
The tax on the second apartment owned in 2021 will be calculated in the same way as on the first according to the scheme described above. At the same time, preferential meters that are not subject to taxation will be taken into account not only for each individual housing property, but also for each owner of the living space separately. For example, if a living space with three owners is 60 square meters, then taking into account the application of preferential footage to each of the owners, this property is not subject to taxation.
Why are property values increasing around the world?
In Russia, on average, each person has about 27 square meters. m., this is significantly more than, for example, in China or Japan, notes General Director of Penny Lane Realty Georgy Dzagurov. He supports the idea of introducing an increased tax for owners of several apartments and believes that as a result the rental rate of housing will decrease.
“We already have 1.3 thousand apartments in Moscow for every 1 thousand families. I don’t see our fellow citizens putting their apartments into business. They do not rent out this property, but sit on it like a dog in the manger: they will buy themselves a second apartment - this is for their grandchildren. Rather, they will use it to store furniture, but will not rent it out. Real estate must work and generate income. Imagine if for every thousand Moscow families there were plus 300 rental apartments, our rent would be very cheap in Moscow. It will become cheaper to rent an apartment, which means the city will be more convenient for business development. Active citizens will come here from all over the country, and maybe from other countries. I would suggest not intensifying the struggle for tax collection, but first motivating them to rent out.
The appearance of such an additional tax would be an unnecessary burden. Our fellow citizens will no longer keep apartments in their bosoms, they will start renting them out.
In France, for example, in resort areas the tax is radically different. If this is your residence, you live there, then you pay a tax in the amount of, conditionally, 0.2% of the cost. And if you do not live there, then the tax may be 7%. There was a case when one of our deputy had a quarrel with a neighbor. So this neighbor was not lazy, went to the notary, installed a notarized video camera, filmed the video for 183 days, brought it to them, showed that no one had been there for more than six months. This means that the house is not a permanent residence. The deputy was charged a tax of 7%, this is €35 thousand from €5 million, for some reason he thought that he could relax, we’ll discuss it further, let him sue me. And he was fined tenfold - €10.5 million. So the comrade lost his home. A serious increase in taxes - multiple, not by 10-20%, but two or three times. It seems to me that this will not be a blow today, but will replenish the budget.”
Deputy Mikhail Shchapov emphasizes that the size of the increased tax rate needs to be discussed. To do this, you need to carry out additional calculations. The proposal has not yet been formalized into legislation.
Who doesn't need to pay
Property tax, as in previous years, in 2021 will not have to be paid to preferential categories of citizens, including pensioners, people with disabilities, children with disabilities, liquidators of the consequences of the Chernobyl nuclear power plant accident, etc. The full list can be found on the Federal Tax Service website or at the nearest territorial office. However, if in past years, a pensioner who owned several real estate properties was completely exempt from paying annual taxes, then after the reform in the legislation, beneficiaries will have to pay for their property in cases where they own more than one home. . This point of legislation was introduced in order to stop attempts by unscrupulous citizens to evade taxes by transferring their property to relatives who have benefits. This means that if a particular person entitled to benefits has a second property, he will have to make annual payments to the Federal Tax Service for one of the properties. To receive a benefit, you must send a notification to the territorial tax authority, indicating for which real estate the benefit should be applied. If such action is not taken, the tax benefit will apply to the item with the highest rate.
Are there any benefits for personal property tax?
Some categories of citizens receive a 100% benefit, that is, they do not have to pay tax at all. Their list is quite long; it can be read in its entirety in the Tax Code of the Tax Code of the Russian Federation, Article 407. In particular, it contains:
- Heroes of the Soviet Union and Heroes of the Russian Federation, as well as persons awarded the Order of Glory of three degrees;
- disabled people of the first and second groups, as well as disabled people from childhood and disabled children;
- participants and veterans of various military operations, starting with the Civil War;
- pre-retirees and retirees.
If a citizen owns several real estate properties, the benefit applies to only one of them - at the taxpayer’s choice. It is important that this property is not used in business activities.
There are also local benefits. They can be found in the same tax service where you checked tax rates. They can also reach 100% or make up some part of the tax.
Revision of cadastral value
If the owner believes that the cadastral value assessment is too high, he should challenge the indicator. This can be done either by going to court or pre-trial. To do this, you need to contact a commission specially formed within the framework of the Law “On Valuation Activities in the Russian Federation” to resolve the dispute about the reduction in value through pre-trial proceedings. If you disagree with the decision of the commission, the applicant has the right to go to court to protect his interests. The maximum period for circulation is five years from the moment the real estate was entered into the state cadastral register.
