Buying your own home is a real opportunity for a young family to improve their living conditions. And maternity capital can help with this. However, there may not be enough funds to purchase the entire apartment, so there is an option to purchase only part of the residential premises as part of the state support program for families with children.
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What are the features when buying a share of an apartment using maternity capital?
All issues relating to the management and distribution of public money, in particular maternity support, are regulated at the legislative level.
A family that has the right to maternity capital can use the allocated funds to solve the housing problem in only two ways:
- In the case where part of a residential apartment being considered for purchase is completely isolated from the rest of the home. This can be one or several separate rooms in a multi-room apartment. It is not possible to purchase a part (share) in a one-room apartment. This is due to the lack of opportunity to allocate a part of it separate from the occupied premises. And the law provides for the possibility of improving living conditions only by obtaining ownership of an independent living space.
- If the purchase and sale agreement allows the owner of the capital to become the owner of the entire premises.
Such transactions take place under the special control of the Pension Fund (PFR), which is obliged to monitor compliance with all nuances, in accordance with the law. There are certain requirements for the selected part of the living space, compliance with which allows us to consider it as an option for using maternal capital. The isolated part of the apartment must be completely habitable. This concerns its full compliance with technical and sanitary standards.
There is no unified scheme for considering applications to the Pension Fund regarding the purchase of a share in an apartment. In each individual case, specialists will study the issue individually. And only the decision they make will become the legal basis for such a transaction.
The issue of registration of the selected share of living space will also be important. Before the transaction, this part must already be separated from the rest of the apartment, recognized as residential, with all communications necessary for life.
As a result of the purchase, the apartment will have two legal owners, which will later give the family the opportunity to buy the remaining part of the home if the second owner wants to sell. Such cases are considered positive in terms of improving living conditions, which may influence the decision of the inspecting party. After completing the transaction and transferring funds, the owners are issued a certificate indicating that they own a share, and not the entire living space.
Buying a share in an apartment is possible not only from strangers, but also from relatives. However, such an agreement, where maternity capital will be used, has a lot of its own characteristics. According to regulations, such transactions have legal grounds. But in order for the Pension Fund to give the go-ahead for such a purchase, you must remember:
- The controlling government agency will allow such an acquisition only if the procedure for using the housing will be significantly changed in the future. This point is important, since very often transactions between relatives are carried out with the aim of cashing out state support funds for families with children. Such fraud is fraud, which is punishable by criminal liability, and all completed transactions are canceled.
- The Pension Fund may allow the purchase of part of the housing if the remaining family members officially renounce their shared ownership.
- You cannot buy a share in an apartment from your spouse using the certificate funds. However, transactions between children and parents are within the law and are not prohibited.
Personal income tax refund
In some cases, when purchasing a share from relatives, you can qualify for a tax deduction, but on the condition that the transaction will not be executed between interdependent persons (husband, wife, grandfather, grandson, etc.).
Options for purchasing part of an apartment using funds from maternity capital from strangers must comply with the requirements of the law. As for the purchase of a room in a hostel using state support, permission for such a transaction can only be obtained if the property is transferred to private housing and is not subject to alienation.
○ How to buy out a share using maternity capital?
Purchasing a share in an apartment using maternity capital is possible in one of two ways:
- From the seller by concluding a purchase and sale agreement. This is acceptable if the child is already three years old.
- Through a mortgage. An agreement is concluded with the bank under which the share is purchased at the bank’s expense, and these funds will be returned to it at the expense of maternity capital. In this case, there is no need to wait three years.
When purchasing a share using maternity capital, it is assumed that the family will own the living space in full. The law does not prohibit the conclusion of such transactions between relatives (with the exception of husband and wife).
However, the Pension Fund is wary of such transactions. For example, a family with children lives with their grandfather in the same apartment and wants to buy out his share. However, there are no plans to evict the grandfather. In this situation, the grandfather does not need to sell his share, but he is not against a buyout. The money goes into his account. After that, you can withdraw them and use maternity capital funds at your own request.
In such a situation, the Pension Fund will most likely refuse, since the grandfather’s share would still go to the family by inheritance. To conclude such a deal, serious arguments will be required.
How to purchase a share in an apartment using maternity capital
There are several legal options for purchasing part of an apartment using funds from the state support fund. Below we will talk about their main advantages.
Through the property owner
This concerns the conclusion of a purchase and sale agreement with the property owner. The procedure involves cashless payment, therefore, after receiving permission for the transaction, the amount will be transferred to the seller’s bank account by the Pension Fund.
However, in this case, there are temporary restrictions on the right to use maternal capital. Thus, purchases using public funds will be possible only when the child reaches three years of age.
Purchasing part of a home through a bank
In this case, housing is purchased with a mortgage. In this option, the funds will go to the seller from a credit institution, and repayment will be made from the amount of state support. An advantage of this option is the possibility of using maternal capital without waiting for the child to reach three years of age. As practice shows, banks often accommodate young families by working on a loan repayment scheme using maternity capital.
Advice. You are more likely to expect approval from a credit institution if the acquisition of a share allows the borrower to become the full owner of the entire apartment in the future. Because this reduces the risk of non-return of allocated funds.
Registration of part of the living space after acquisition will require the allocation of shares in the room/rooms for each family member, including children. Divide the living space into at least three parts. The size of the shares is determined by agreement between the parties to the transaction. In this case, the official allocation of shares for each family member must be made no later than six months from the date of the transaction.
○ Procedure for selling a share in an apartment to a relative.
The legal procedure for the sale of a share implies the need to provide the opportunity to exercise the pre-emptive right to purchase. The seller's co-owners have this right.
Clause 1 of Art. 250 of the Civil Code of the Russian Federation: When selling a share in the right of common ownership to an outsider, the remaining participants in shared ownership have the preemptive right to purchase the sold share at the price for which it is sold, and on other equal conditions, except in the case of a sale at public auction, as well as cases of sale of a share in the right of common ownership of a land plot by the owner of a part of a building or structure located on such a land plot or by the owner of premises in the specified building or structure.
Thus, the sale of a share to an outsider without notifying the other co-owners of the upcoming transaction is impossible. If the preemptive right is violated, the transaction will be considered illegal.
The preemptive right must be exercised regardless of the presence or absence of family ties between the seller and the potential buyer.
Stages of buying out a share in an apartment using maternity capital
Since payment under the share purchase and sale agreement is made by the Pension Fund directly to the seller, it is important to comply with all the mandatory stages of preparing and conducting the transaction. The sales documents indicate that funds for payment come from state support, so issues regarding approval can be resolved by specialists within several months, but no more than three.
The first stage of buying out a share is collecting all the necessary documents. To complete the transaction you will need:
- data of the parties to the contract;
- information about real estate;
- share value;
- funds transfer scheme;
- the procedure for transferring ownership of part of the home to a new owner.
All documents must be submitted to the Pension Fund, which will carry out the verification, and in case of a positive decision, the transfer of money. To consider an application for redemption of a share, the applicant will need to provide:
- passport and SNILS;
- certificate for maternal capital;
- documents on marital status and presence of children;
- application for disposal of materials;
- an extract from the Unified State Register of Real Estate for part of the apartment;
- notarial obligation to allocate a share;
- contract of sale.
Upon expiration of the established period, the fund will make a decision on refusal or payment of financial assistance to improve housing conditions. Registration of ownership of shares is carried out in Rosreestr. This requires the presence of two parties to the contract.
○ Is it possible to use a mortgage when buying out a share?
As a rule, banks are more willing to provide funds for the purchase of entire real estate properties. But depending on the specifics of the transaction, a loan for a share may be approved.
The bank will probably issue a mortgage if, after purchasing the share, the borrower becomes the full owner of the entire living space. Then the entire apartment will become the subject of collateral, and the lender will not have to worry about ensuring the return of funds.
Most likely, the bank will refuse to issue money if the transaction is made between close relatives or former spouses. In the latter case, the period that has passed since the divorce will matter.
○ How to properly complete a transaction?
There is no unified form of purchase and sale agreement. However, without specifying essential conditions, it will be considered invalid.
These conditions include:
- Parties' data.
- Identification information about the subject of the transaction.
- Selling price.
- Procedure for transferring funds.
- The procedure for transferring a share to a new owner.
- Other conditions that the parties consider significant.
In addition, you will need to register the details of all persons registered in the apartment.
Clause 1 of Art. 558 of the Civil Code of the Russian Federation: An essential condition of the contract for the sale of a residential building, apartment, part of a residential building or apartment in which reside persons who, in accordance with the law, retain the right to use this residential premises after its acquisition by the buyer, is a list of these persons indicating their rights to use the property being sold living space.
○ Regulations.
The main regulations governing the procedure for purchasing shares in an apartment from relatives are:
- Civil Code of the Russian Federation.
- Tax Code of the Russian Federation.
- Federal Law No. 256 of December 29, 2006 “On additional measures of state support for families with children.”
- Federal Law No. 102 of July 16, 1998 “On Mortgage”.
The main legal act is the Civil Code of the Russian Federation. It is this legislative provision that establishes the pre-emptive right to purchase, provides for the procedure for completing the transaction and describes other nuances.
○ Mandatory notification of the sale of a share to all participants in shared ownership.
Notification of the sale of a share is made in writing. The text of the notice must include information about the price and other essential terms of the transaction. There is no legally prescribed form for this document. The Civil Code of the Russian Federation only says that the notification must be issued in writing.
Clause 2 of Art. 250 of the Civil Code of the Russian Federation: The seller of a share is obliged to notify in writing the other participants in shared ownership of his intention to sell his share to an outsider, indicating the price and other conditions under which he sells it.
After receiving the notification, the co-owners have a month to think about it. After this time, if the co-owners refuse to buy out or ignore the notice, the seller has the right to sell the share to any person.
