Limitation period for income tax refund when purchasing an apartment
Statute of limitations for tax deductions on mortgages
Results
In this article we will tell you whether there is a concept of a statute of limitations for property deductions when buying an apartment. Let's look at how many years later you can get a tax deduction when buying an apartment and how the calculation is carried out.
If you have questions or need help, please call Free Federal Legal Advice.
- The call throughout Russia is free 8 800 350-94-43
Tax cannot be refunded for years preceding the year in which the right to deduction arose
According to the Tax Code of the Russian Federation (clause 6, clause 3, article 220), the right to a property deduction arises:
- when purchasing under a purchase and sale agreement - in the year of registration of ownership rights according to an extract from the Unified State Register of Real Estate (certificate of registration of ownership rights);
- when purchasing under an equity participation agreement - in the year of receipt of the Apartment Acceptance Certificate.
You can return the tax (receive a deduction) only for the calendar year in which the right to it arose and for subsequent years. It is not possible to refund taxes for years preceding the year in which the right to deduction arose.
Note: more detailed information about the moment when the right to deduction arises can be found in the article “When does the right to tax deduction arise when purchasing a home?”
Example: In 2021 Matantseva G.S. entered into a share participation agreement for the construction of an apartment. In 2021, the house was completed, and she received an Apartment Acceptance Certificate. This means that G.S. Matantseva has the right to deduction. arose in 2021. At the end of 2020 (in 2021), she can file for a tax refund for 2021.
If the deduction is not fully used (the tax paid is not enough to fully receive the deduction), then she will continue to receive it in subsequent years. Refund tax for earlier periods (for 2021, 2021, etc.) Matantseva G.S. can not.
Example: In 2021 Borisov A.A. I bought an apartment under a sales contract. The certificate of registration of ownership was received in the same year. This means that A.A. Borisov has the right to a property deduction. arose in 2021. Accordingly, now (in 2021) Borisov A.A. can submit documents to the tax authority for a tax refund for 2021 and 2020.
You can submit documents for 2021 only after it ends. If the deduction is not fully used (the tax paid is not enough to fully receive the deduction), then he will continue to receive it in subsequent years.
Receive a deduction (return tax) for earlier periods, for example, for 2021 and 2021, Borisov A.A. cannot, since in these years the right to deduction has not yet arisen.
The only exception to this rule is when a retiree carries over a deduction. Pensioners have the right to transfer the deduction to three years preceding the year the right to it arose. This situation is discussed in detail in the article “Obtaining a deduction when purchasing an apartment by a pensioner.”
The relationship between the amount of deduction and the statute of limitations
The size of the tax deduction for an apartment and the statute of limitations are interrelated. The fact is that the wording of clause 3 of Art. 220 of the Tax Code of the Russian Federation has changed significantly since January 1, 2014 (law dated July 23, 2013 No. 212-FZ):
- the maximum deduction amount (2 million rubles) was allowed to be used for various residential real estate objects, provided that all of them were purchased after 01/01/2014; for real estate acquired before the specified date, its value could be declared as expenses not exceeding 2 million rubles. (previously 2008 - 1 million rubles), and only one object in life;
- interest on targeted loans for the purchase of real estate, mortgages from 01/01/2014 was limited to 3 million rubles; this limit does not apply to earlier periods - the amount of interest paid is accepted for deduction without restrictions, but in any case, the deduction is applicable only to one object in life.
The buyer is returned 13% of the established deduction amount (tax withheld from income received), while the deduction itself is determined according to the rules in force in the year of acquisition of the real estate. That is, for real estate purchased after 01/01/2014, the maximum refundable amount is no more than 650,000 rubles. (13% of 2 million rubles - 260 thousand rubles and 13% of 3 million rubles - 390 thousand rubles). If the apartment was purchased before 2014, the rules in force at that time apply to the deduction.
Example
A citizen bought an apartment with a mortgage in 2012 for 1.5 million rubles. (he did not apply the deduction), and in 2021 he purchased another one with a mortgage - for 3 million rubles. If he applies for a deduction for the purchase of his first apartment now, he will be given only 1.5 million rubles. deduction, and its balance in the amount of 500 thousand rubles. it will simply disappear, because until 2014 the deduction was provided only for one residential property, which means it cannot be transferred to a second apartment. In this case, it is more profitable to claim a deduction for the second apartment, using the full amount of the deduction (2 million rubles). At the same time, a citizen can claim a deduction for mortgage interest for the first apartment without restrictions on the amount, but then this deduction will no longer be applicable to the second home.
In fact, it turns out that how long ago the apartment was purchased does not affect the possibility of obtaining a property deduction. In this case, the tax will be recalculated and refunded only for the last 3 years. But the total amount of the refund will depend on the value of the property, including mortgage interest, the date of acquisition of ownership and the amount of taxable income of the buyer.
You can submit documents for a tax refund for a calendar year only after its end.
The 3-NDFL tax refund declaration is always submitted for the entire calendar year, regardless of the month in which the housing was purchased and in which months the taxes were paid. At the same time, you can submit a declaration for a calendar year only at the end of it (clause 7 of Article 220 of the Tax Code of the Russian Federation). You cannot submit a tax refund return for a calendar year before its end.
Example: Titarenko E.S. I bought an apartment in January 2021. In February 2021, he quit his job. Other income in 2021 from Titarenko E.S. not expected. After the dismissal of Titarenko E.S. I wanted to immediately file a tax return and, due to the deduction, return the tax paid in January-February 2021.
However, Titarenko E.S. can do this. cannot, since he needs to wait until the end of 2021, and only then submit the 3-NDFL declaration for 2021 to the tax office.
Note: You can take advantage of the opportunity to receive a deduction through your employer without waiting for the end of the calendar year. Read more in our article “Obtaining a property deduction through an employer.”
When can you apply for a deduction?
The question of when you can apply for a tax deduction is decided depending on the addressee of the application. If, for example, the buyer of an apartment decides to return part of the tax through his employer, he has the right to submit a corresponding application immediately after registering ownership rights and receiving the appropriate certificate from Rosreestr.
When applying for a tax deduction through an employer, the tax refund scheme itself changes somewhat. In this case, there is no need to talk about the statute of limitations for a tax deduction not only for claiming rights to it, but also for year restrictions. If the claim for a refund of the tax paid is approved, the employer will simply stop withholding current income taxes from the salary.
The process will continue until the entire deduction amount is collected. Unfortunately, for most hired workers the process drags on for more than one year. If, a year after the start of withholding, the taxpayer decides to receive the remaining amount through the Federal Tax Service, he can skip another year and contact the Tax Service with a corresponding application.
But there is a recommendation period. It is associated with filing a tax return. If a citizen received income from a transaction, he is required to declare it. The deadline for filing a declaration is strictly defined and must be adhered to. It must be submitted from January 1 to May 1 of the tax period following the year in which the income was acquired. Failure to meet deadlines will result in penalties. If a citizen needs to submit a tax return, then it is better to combine filing an application for an income tax refund with it. Then you won’t have to contact the Federal Tax Service several times.
Tax deductions have no statute of limitations
Tax legislation does not contain restrictions on the period for receiving a property deduction, therefore the right to a deduction when purchasing a home does not have a statute of limitations . You can claim a deduction either 10 years or 20 years after purchasing a home.
Example: In 2003, Degtyarev M.O. bought an apartment. In 2021, he learned about the property deduction, submitted the relevant documents to the tax office and received the deduction.
Example: In 2021 Kalacheva E.Z. I bought an apartment, but since the beginning of the year she has been on maternity leave to care for children and plans to stay on it for the next 6 years. Accordingly, at the moment Kalacheva E.Z. cannot receive a deduction (since he does not work and does not pay income tax). After she returns to work in 2026 and begins paying taxes, she will be able to exercise her right to a property deduction.
Despite the fact that there is no statute of limitations for receiving a property deduction, remember that you can only return taxes for the previous 3 years. More about this in the next paragraph.
Statute of limitations for pensioners
Retired persons retain the right to apply for deductions when purchasing real estate, etc. But they do not pay personal income tax.
Accordingly, a situation may arise when there is simply nothing to return the tax from, because the amount has not been paid. Therefore, a different validity period for tax deductions is provided for pensioners. They can return income tax for the three years preceding the transaction, but only if they paid personal income tax during this period. For example, a pensioner purchased a plot of land in 2021. He is entitled to deduction for the years 2021 – 2021 (inclusive). Those. They are allowed not only to shift the time frame, but also to increase the period for which the tax is refunded. If for all other taxpayers it is three years, for pensioners it is four years.
This rule applies to those pensioners who have actually stopped working and paying personal income tax. In all other cases, a property tax deduction can be issued at their discretion. If the income in the previous three years was higher than in subsequent years, which means higher income taxes, you can choose them. If it was lower, then you are allowed to choose the period after the transaction, but then not four, but three years in a row will be taken into account.
According to Russian law, receiving a tax deduction for an apartment does not have a statute of limitations. Each resident has the right to refund paid income tax at any time after it arises. You can only receive a deduction for the years following the transaction. This provision does not apply to non-working pensioners. They are entitled to receive a deduction for the three years preceding the transaction.
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.
Who cannot count on a refund, regardless of the timing of the purchase of real estate
There are categories of persons who are not entitled to a deduction, among them:
- A child who is under 18 years of age.
- A student who does not have an official place of work.
- A pensioner who has no taxable income. But he can have any income, and this is not necessarily a salary. The key requirement is that income tax be paid from it.
- Individual entrepreneurs and legal entities.
- Any persons having income that is not subject to 13% tax.
- Those who bought property from a relative.
- A person who is not a resident of the Russian Federation, that is, stays in the country for less than 183 days a year.
- Those who do not have a certificate of title to housing.
- If the apartment was purchased with the assistance of a social service, with government funds or subsidies, including maternity capital. If assistance in the purchase was provided by the employer.
