Property tax deduction when purchasing an apartment in 2021

The right to a tax deduction appears in the case when you have carried out certain transactions with property (Article 220 of the Tax Code of the Russian Federation). It could be:

buying a home - a house, apartment, room, etc.;
sale of property;
construction of housing or acquisition of land for these purposes.

To receive a tax deduction, you will need either a registration certificate and a purchase and sale agreement, or a transfer and acceptance certificate and a share participation agreement.

In this article we will look at the situation with purchasing an apartment.

Who can receive a property tax deduction
What documents are needed to receive a deduction?
Amount of deduction and maximum expenses
How to calculate the amount of deduction
What is taken into account as expenses when calculating deductions
Stages of obtaining a property tax deduction
Obtaining a property tax deduction through an employer
In 2021, it will be possible to receive a tax deduction without a declaration

Who can receive a property tax deduction

Firstly, only citizens of the Russian Federation who purchased an apartment in Russia can count on the benefit. It is important that you pay your own money for the housing or take out a mortgage.

Secondly, the deduction is provided to those taxpayers who have taxable income at a rate of 13%. To do this, you need to receive an official salary and pay personal income tax on it.

For example, if an individual entrepreneur uses a simplified taxation system, then he will not be able to receive a tax deduction, since “simplified” ones are exempt from paying personal income tax. On the same basis, self-employed people (payers of professional income tax) are deprived of this benefit.

However, both individual entrepreneurs using the simplified tax system and self-employed people can receive additional income subject to personal income tax. For example, they can earn money from their own activities and at the same time work officially in the company. In this case, they will have the right to receive a property tax deduction in the tax period in which income taxed at a rate of 13% was received.

If a taxpayer bought an apartment in 2021 and received a registration certificate in 2020, then starting from 2020 he has the right to a deduction. Therefore, as soon as you have received documents confirming your rights to real estate, begin collecting the necessary papers to receive a property tax deduction.

What documents are needed to receive a deduction?

This kit includes:

passport;
income certificate in form 2-NDFL, which indicates income and taxes paid for the corresponding year;
Declaration 3-NDFL, from which it is clear that property was acquired, taxes were paid and that a certain amount of property tax deduction is due.

For the apartment you will need:

apartment purchase agreement;
an act on the transfer of an apartment to the taxpayer or a certificate of state registration of the right to an apartment.

If the apartment was purchased through a shared participation agreement:

an agreement on shared participation in construction or an agreement on the assignment of the right to claim;
an acceptance certificate or other document confirming the transfer of the object from the developer to the participant;
copies of payment documents (for example, payment orders, bank statements about the transfer of money from the buyer’s account to the seller’s account).

If the apartment was purchased on the secondary market:

agreement on the purchase of an apartment (for example, a purchase and sale agreement);
copies of payment documents (for example, payment orders, bank statements about the transfer of money from the buyer’s account to the seller’s account);
documents confirming ownership of the apartment (for example, a certificate of state registration of rights).

If you bought a house and land:

agreement for the purchase of a land plot with a residential building;
copies of payment documents (for example, payment orders, bank statements about the transfer of money from the buyer’s account to the seller’s account);
documents confirming ownership of a residential building (for example, a certificate of state registration of title);
documents confirming ownership of a land plot (for example, a certificate of state registration of rights).

Until 2014, property tax deductions were issued for only one property, but now it can be received from several apartments. The limit on the amount remains the same - no more than 2 million rubles. For example, if an apartment costs 1.5 million rubles, then you can get a deduction of another 500,000 rubles. from the next apartment.

Until 2014, there were no restrictions on mortgage interest. For example, from an overpayment of 10 million rubles. it was possible to get a deduction for the entire 10 million rubles. Starting from 2014, a limit was introduced on the deduction of mortgage interest in the amount of 3 million rubles.

Tax deductions can be obtained not only for real estate, but also for mortgage interest.

For this you need the following documents:

loan agreement with annexes and additional agreements thereto;
documents confirming payment of interest on the mortgage (for example, a certificate from the bank).

The deduction is issued for the interest actually paid. For example, if a mortgage agreement was signed for 10 years 3 years ago, then a tax deduction is issued for the amount of interest paid for 3 years. Interest paid in the following year will be tax deductible in the following year.

Amount of deduction and maximum expenses

There are some nuances with the registration of deductions depending on the type of property.

Sole proprietorship . When buying an apartment, you can return the property tax deduction, but not more than 2 million rubles. 13% of the cost is refundable. By purchasing an apartment for 2 million rubles, you can return 260,000 rubles. previously paid taxes, and for 1 million rubles. — 130,000 rub. If the purchase price is more expensive, the refund amount will not change.
Common shared ownership . For example, when purchasing ½ share in an apartment for 3 million rubles. You can apply for a deduction of no more than 1.5 million rubles.
Common joint property . Until 2014, spouses for two could receive a deduction of no more than 2 million rubles. Therefore, it was more profitable to issue a deduction for only one of the spouses, and the other could receive another tax deduction in the future. Since 2014, the limit is 2 million rubles. are established not per property, but per person. For example, if the cost of an apartment is 5 million rubles, then each spouse can receive a deduction of 2 million. If the apartment costs 3 million rubles, you can agree to make a deduction of 1.5 million rubles, and then each 500,000 rubles remain, which can be used for the following objects.

Who will act as a source of information for the tax authorities?

For simplified tax deductions, starting from 2021, all information for tax authorities will be prepared by tax agents, banks, and executive authorities. All these entities will interact within the framework of a special program. The rules for its functioning have already been prepared; participation in it is carried out exclusively on a voluntary basis. That is, no one will be forced to participate, but if a subject has a desire to join the information interaction, then he must meet certain criteria, namely:

the bank must have a license from the Central Bank of the Russian Federation to carry out banking operations;
a professional participant in the securities market must have a license from the Central Bank of the Russian Federation to carry out brokerage activities or to manage securities.

Personal income tax taxpayers can always contact the bank where the agreement for the purchase of property was signed, or a professional broker with whom an agreement was concluded to maintain an individual investment account, to clarify information about whether a simplified receipt of a tax deduction is available to them.

How to calculate the amount of deduction

The maximum deduction amount is: 2,000,000 x 13% = 260,000 rubles. This amount can be applied to several purchased residential properties if their total cost is less than 2 million rubles. (clause 3 of article 220 of the Tax Code of the Russian Federation).

If real estate is purchased by spouses, then each of them has the right to a maximum deduction amount of 2 million rubles.

If a loan was taken out to purchase property, you can receive a deduction of no more than 3 million rubles for interest. The maximum deduction amount is: 3,000,000 x 13% = 390,000 rubles.

What is taken into account as expenses when calculating deductions

If you purchase an apartment, then the costs take into account:

the purchase of real estate itself;
acquisition of rights to an apartment in a building under construction;
spending on finishing materials;
apartment finishing work, development of design and estimate documentation.

If you buy a house or build one, then the costs include:

development of design and estimate documentation;
purchase of building materials, as well as finishing materials;
the purchase of a house itself, including at the stage of unfinished construction;
house construction and finishing work;
carrying out electricity, water and gas supply and sewerage.

Stages of obtaining a property tax deduction

So far the process consists of four stages. But most likely, already in 2021, a bill will be adopted that will amend the Tax Code in terms of introducing a simplified procedure for obtaining tax deductions for personal income tax. The deadline for submitting amendments is February 24, 2021.

Step 1. Collect copies of all necessary documents

Copies of documents confirming the right to housing:

when constructing or purchasing a residential building - a certificate of state registration of the right to a residential building or an extract from the Unified State Register;
when purchasing an apartment - a purchase and sale agreement, an act of transfer of the apartment to the taxpayer, a certificate of state registration of ownership or an extract from the Unified State Register of Real Estate;
when purchasing a land plot for construction or ready-made housing - a certificate of state registration of ownership of the land plot and a certificate of state registration of ownership of a residential building;
when paying off interest on a mortgage - a mortgage agreement, a schedule for repaying the loan and paying interest on the use of borrowed funds.

Until 2021, to receive a deduction, it was enough to provide a certificate of state registration of the right. But in 2021, there were changes in confirming the right to a property deduction when purchasing real estate (Federal Law dated July 3, 2016 No. 360-FZ). If you purchased real estate after July 15, 2021, then the right to a property deduction will have to be confirmed with an extract from the Unified State Register.

Copies of payment documents:

confirming expenses for the acquisition of property (receipts for receipt orders, bank statements about the transfer of funds);
evidence of payment of interest under the mortgage agreement (certificate of interest paid for using the loan).

Stage 2. Take certificate 2-NDFL from work

Just contact the accounting department - they will prepare it.

Step 3. Fill out the 3-NDFL declaration

You will need data from your passport, 2-NDFL and other documents.

Please note that Form 3-NDFL is updated annually, but you must use the one that corresponds to the year for which the personal income tax is being returned.

On its website, the Federal Tax Service provides an example of filling out a tax return in Form 3-NDFL.

If the property was purchased as a common joint property, you must provide:

a copy of the marriage certificate;
a written statement on the agreement of the spouses on the distribution of the amount of property tax deduction.

Please note: the new form 3-NDFL includes a statement for a refund of the amount of overpaid tax. It also needs to be filled out so that the tax office can transfer the amount to you.

Until 2021, the application had to be filled out separately using a special approved form (Order of the Federal Tax Service of the Russian Federation dated February 14, 2017 No. ММВ-7-8 / [email protected] ).

In your application please indicate:

Name of the bank;
bank account details to which the amount must be transferred (the amount in the application must match the amount indicated in the declaration).

Step 4. Submit a set of documents to the tax office

The package of documents is submitted either to the tax office at your place of residence in person, or through your personal account on the Federal Tax Service website. Specialists check documents within 3 months. If any questions arise, you will be contacted and asked for original documents. If everything is in order, the money will be credited to your account. In general, the procedure for obtaining a property tax deduction takes a maximum of 4 months.

Results

Declaration 3-NDFL when purchasing an apartment is filled out according to algorithms regulated by order of the Federal Tax Service on the basis of supporting documents (acceptance certificate of the apartment, certificate of state registration of real estate rights, payment receipts, etc.).

The balance of the property deduction can be carried forward to subsequent periods. To do this, you need to collect the package of documents again, fill out a declaration and submit an application to the tax authority.

Sources:

Tax Code of the Russian Federation
Order of the Federal Tax Service of Russia dated August 28, 2020 No. ED-7-11/ [email protected]

You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Obtaining a property tax deduction through an employer

If you contact your employer, you can receive a property tax deduction before the end of the tax period. In this case, filing a 3-NDFL declaration is not required.

What do you need:

Write an application (in any form) to receive a notification from the tax authority about the right to a property deduction. You can use the form that the Federal Tax Service recommends in Letter dated October 6, 2016 N BS-4-11 / [email protected] But it is much easier to submit an application through the taxpayer’s personal account, since there is already a special form there.
Make copies of documents confirming your right to receive a deduction. Upload them to the taxpayer’s personal account and sign with an electronic signature (there is no need to specially obtain it, it is generated automatically).
Submit to the tax authority an application to receive notification of the right to a property deduction, attaching copies of documents confirming this right.
After 30 days, receive a notice of the right to deduction from the tax authority and give it to your employer.
Provide a notice issued by the tax authority to the employer, which will be the basis for not withholding personal income tax from the amount of income paid to an individual until the end of the year.

A notification from the Federal Tax Service is a basis not to withhold personal income tax from the salary paid to an employee in the current tax period, and the main document confirming the right to deduction, therefore, upon receiving the notification, you must check whether all your data and details are correct.
Yulia Rybalko Leading payroll specialist in legal

note

There is no statute of limitations for obtaining a property tax deduction. For example, you can receive a tax deduction even 10 years after purchasing an apartment.
If you file a deduction yourself, then at the tax office, after the end of the tax period, you can count on a one-time full amount of 13% of your income earned during the year. If the deduction is issued through the employer, then the personal income tax refund will occur before the end of the tax period if the tax office confirms the right to the deduction. This will allow you to receive your salary without personal income tax withholding, starting from the month in which you received the notice from the tax office.
According to paragraph 9 of Art. 220 of the Tax Code of the Russian Federation, if property tax deductions cannot be used in full during a tax period, their balance can be transferred to subsequent tax periods until they are fully used. Depending on the taxpayer’s earnings, personal income tax refunds may take several years.

Tax refund limited to the last three years

As we said above, there is no statute of limitations for obtaining a deduction when purchasing a home, but according to clause 7 of Article 78 of the Tax Code of the Russian Federation, tax paid can only be returned for the previous three years . For example, in 2021, you can only return taxes for 2021, 2021 and 2020. It is no longer possible to file returns and refund taxes paid in 2021 and earlier years.

Note: The only exception is the ability to carry forward the deduction for retirees. In this case, a refund is possible not for three, but for the last four years (for more details, see the article “Receiving a deduction when buying an apartment as a pensioner”).

Example: In 2009, Izyumova I.K. I bought an apartment. By contacting the tax office in 2021, she will be able to file returns and refund taxes for 2021, 2021 and 2021. It is no longer possible to receive a deduction and return taxes for earlier years. If for 2018-2020 the deduction is not fully received (the tax paid is not enough to exhaust the deduction), then Izyumova will be able to continue to receive the deduction in subsequent years: submit documents for a tax refund for 2021 - in 2022, for 2022 in 2023 etc.

In 2021, it will be possible to receive a tax deduction without a declaration

Already in the spring of 2021, the process of obtaining a deduction can be automated and therefore simplified. On January 26, the State Duma adopted in the first reading a bill on providing personal income tax deductions online.

The Federal Tax Service promises that in order to return personal income tax, it will be enough to simply fill out an electronic application generated in your personal account on the Federal Tax Service website. You won’t have to worry about filing declarations and certificates. And tax authorities will be able to receive information about the right to deduction without the participation of taxpayers. For example, if the purchase of an apartment is carried out with the participation of a bank, then the information necessary for a tax deduction will be received by the tax authority from the bank.

The law will make life easier for many.
The pandemic has shown us how important it is to develop digital technologies, to make access to government services remote, so that people can use them in any situation. Vyacheslav Volodin Chairman of the State Duma

Earlier, the press service of the Federal Tax Service explained to Rossiyskaya Gazeta that the improved procedure will reduce the time required to receive deductions - from 3 to 1.5 months.

conclusions

In conclusion, let's summarize:

— the most hassle-free method of obtaining a deduction that guarantees maximum return is the return of money through the tax office based on the results of the calendar year;

— for those who do not want to wait until the end of the year, but want to start receiving a refund of deductions as quickly as possible, the method of returning the deduction through the employer will be more acceptable.

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.