Taxation of purchase and sale of land with a house

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Published: 01/20/2017

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When selling a plot of land (PL) with a house, the seller receives income. And in accordance with the Tax Code, personal income tax must be paid on income . However, the taxation of such sales has its own characteristics.

• Laws
• The amount of tax for the purchase and sale of land plots with a house
• Tax exemption
• Tax deductions
• Documents for receiving a deduction
• How to get 13% back
• Possible failures

Laws

Calculations and payment of taxes on the sale of land plots with a house must be made in accordance with the laws of the Russian Federation.

In particular, Chapter 23 of the Tax Code is devoted to general tax issues.

At the same time, Articles 217 and 217.1 clarify the issues of tax exemption for income received in real estate transactions, which include land plots with a house, and Art. 220 considers tax deductions for both sellers and buyers of real estate.

The letter from the Federal Tax Service clarifies issues related to the status of tax resident for citizens of the Russian Federation. This status is important when determining the amount of personal income tax.

The amount of tax for the purchase and sale of land plots with a house

When calculating the tax on the sale of land plots with a house, it is first necessary to determine whether the seller has resident status.

A resident, regardless of citizenship, can be a person who stays in the country for > 183 days during the year.

In this case, departure abroad of the Russian Federation due to illness, study or to work in offshore fields for a period of less than six months is not taken into account. Military personnel and government employees sent abroad are also considered residents.

The remaining persons are not residents.

It is necessary to take into account the clarification expressed in the letter of the Federal Tax Service No. OA-3-17/4698.

In accordance with it, the absence of a citizen of the Russian Federation in the country for more than a specified period is not grounds for considering him a non-resident.

This is due to some international treaties, according to which an individual is considered a resident of the Russian Federation if he has a permanent home there.

In such cases, the issue of resident status is decided individually.

The tax rate on the sale of land plots with a house is set at the rate (Article 224 of the Tax Code):

• 13% - for residents of the Russian Federation;
• 30% - for non-residents of the Russian Federation.

For example, a seller who is a resident is not entitled to deductions.

When selling a plot with a house for 5 million rubles. he must pay tax N1=5000000*13%=650000 rub. In such a case, a non-resident person will pay tax H2 = 5,000,000 * 30% = 1,500,000 rubles.

Buying land: let's sort out the costs

“Salt of the earth” in its value

The Tax Code, in paragraph 1 of Article 264.1, attributes to the expenses for the acquisition of land plots such expenses that were incurred for the purchase of land with existing buildings, or for the purpose of construction on them, in the event that these plots are acquired from lands located in the state or municipal property. This norm has become fundamental for financiers when considering issues related to accounting for the costs of acquiring rights to land plots (letter of the Ministry of Finance dated May 25, 2007 No. 03-03-06/1/313). Based on it, officials argue that if land was purchased from land owned by legal entities or individuals, then the costs associated with their acquisition cannot be taken into account when taxing profits. The Ministry of Finance also noted that this rule applies exclusively to those companies that entered into agreements for the purchase of land plots in the period from January 1, 2007 to December 31, 2011.

Financiers have given explanations that are unfavorable for taxpayers purchasing land before. For example, in letter dated May 19, 2003 No. 04-02-05/3/50, the Ministry of Finance stated that the costs associated with the acquisition of land plots are capital investments and, according to paragraph 49 of Article 270 of the Tax Code, do not reduce the tax base.

And the letter of the Ministry of Finance dated April 5, 2005 No. 03-03-01-04/1/158 states that the Tax Code does not provide for deduction of the cost of acquired land plots from the tax base.

In light of such events, “special regime officials” find themselves in a very piquant situation, obligated to apply most of the provisions of Chapter 25 of the Code “Income Tax” when calculating unified taxes, although in fact they are exempt from paying it.

Land under preferential treatment

When determining the object of taxation of the Unified Agricultural Tax, legislation allows firms to reduce their income by costs, the list of which is given in paragraph 2 of Article 346.5 of the Tax Code. At the same time, subparagraph 31 of this legislative norm stipulates the possibility of including in expenses “spent” by the organization on the acquisition of property rights to land plots, including those that previously belonged to the state or municipalities, in the event that these plots will be used in purposes of agricultural production.

The amounts of such expenses are taken into account in equal shares for the reporting and tax periods (clause 4.1 of Article 346.5 of the Tax Code). At the same time, when determining the tax base for the Unified Agricultural Tax, firms must take into account these costs for a period independently determined by them, which, however, cannot be less than seven years.

Tax legislation does not provide such concessions to companies that apply a simplified taxation system, experts from the Practical Accounting magazine note with regret. And if earlier “simplified people” had the right to take into account the value of the acquired land plot when determining the tax base for the single tax, then from January 1, 2006 the situation has changed.

Thus, according to the new edition of paragraph 4 of Article 346.16 of the Tax Code, only those objects that are recognized as depreciable property are included in fixed assets and intangible assets. Land plots, in turn, are not such and depreciation is not charged on them (clause 2 of Article 256 of the Tax Code). It turns out that the costs of the simplified people for the acquisition of land cannot be taken into account when calculating the single tax. A similar opinion was expressed by financiers in letters dated April 18, 2006 No. 03-11-04/2/84, dated November 15, 2006 No. 03-11-05/247.

E. Amargorova , columnist for the Federal Agency for Financial Information

Tax exemption

In some cases, income received from the sale of a lease with a house is not subject to taxation.

The sale of a land plot with a house is subject to tax exemption if the seller

owned this property for more than the maximum period.

Currently this period is 5 years. A period of 3 years remains for sellers of land plots with a house who received their property as a result of the following transactions:

• gifts from close relatives or inheritance;
• privatization;
• transfer of real estate under a lifelong maintenance agreement.

At the same time, constituent entities of the Russian Federation can reduce the deadline down to zero.

Tax deductions

According to the Tax Code, persons participating in a transaction for the purchase and sale of land plots with a house have the right to tax deductions.

In particular, both sellers of land plots with a house and its buyers can take advantage of this right.

When determining taxes on the sale of land with a house, the seller has the right to reduce the tax base, taking into account tax deductions.

Tax deduction - an amount of money deducted from a person’s income when determining the tax base.

This deduction is provided only for income with a tax rate of 13%.

When selling a land plot with a house, a deduction is applied, which is equal to 1 million rubles. The formula for applying such a deduction is as follows. A tax deduction is subtracted from the amount received upon sale, and then the tax is calculated from the resulting difference.

Example 1. For a resident of the Russian Federation who sold a house for 5 million rubles. and entitled to deduction, personal income tax is equal to:

Н1=(5000000-1000000)*13%=520000 rub.

Example 2. Instead of a property deduction, the taxpayer can reduce the amount of his income by the costs of purchasing this land plot with a house.

If the above-mentioned land plot with a house was previously purchased for 4,000,000 rubles, then the personal income tax on sale will be:

H1=(5000000-4000000)*13%=130000 rub.

In this case, this option for paying personal income tax is much more profitable!

Along with sellers, tax deductions can also be used by

buyers of a leasehold property with a house. In this case, the buyer can return an amount of money equal to 13% of the tax deduction. This deduction is equal to the amount of the purchased plot, but it should not exceed 2,000,000 rubles. If the cost of the lease with the house is less than 2,000,000 rubles, then the remainder of the deduction can be applied to the next real estate purchase transaction.

The benefits associated with the deduction when purchasing a memory card cannot be used by:

• persons under 18 years of age;
• pensioners;
• unemployed students;
• persons who bought the plot not at their own expense.

Pensioners can have a deduction for the purchase of a mortgage with a house only if this property was purchased 3 years before the person’s retirement.

To receive a deduction when purchasing a land plot with a house, the following requirements must be met:

• the buyer is a resident and is subject to tax at a rate of 13%;
• ownership of the purchased plot with a house is registered;
• the price for the property has been fully paid;
• the purchase of the plot was made at the expense of the buyer’s personal funds;
• The purchase and sale took place between mutually independent persons.

When purchasing a plot with unfinished construction of a house, the deduction is due after the completion of construction of the house and its state registration.

Tax deduction when buying a summer house. How to return 13 percent for a garden house and plot?

The buyer of real estate has the right to receive a property tax deduction. Is a tax deduction possible when buying a summer house? From the article you will learn whether it is possible to return 13 percent for a garden plot, how to get a tax deduction when buying a summer house in SNT, and what is needed to apply for a tax deduction when building a country house.

Is it possible to get a tax deduction when buying a summer house?

Article 220 of the Tax Code of the Russian Federation is devoted to obtaining property tax deductions. Let's open this article and find out whether it is possible to get a tax refund on the purchase of a summer house. When determining the size of the tax base for calculating personal income tax, the taxpayer has the right to receive a property tax deduction in the amount of expenses actually incurred by the taxpayer:

• for new construction or acquisition on the territory of the Russian Federation of residential buildings, apartments, rooms or share(s) in them,
• acquisition of land plots or share(s) in them provided for individual housing construction, and land plots or share(s) in them on which the acquired residential buildings or share(s) in them are located.

Also, the taxpayer has the right to receive a property deduction for the interest on a mortgage loan issued for the above purposes.

As we can see, the list of property for the purchase of which you can get a tax refund does not include dachas (country houses and garden plots). Does this mean that a personal income tax refund when buying a summer house is impossible?

How to get a tax deduction when buying a summer house?

A property tax deduction is provided to a taxpayer when he purchases a residential building, rather than a residential building. And if you bought a dacha, you can receive a tax deduction only in one case - if the dacha house is recognized as residential.

Thus, a refund of 13 percent from the purchase of a summer house until the country house is recognized as residential is impossible. Upon receipt of documents confirming ownership of a residential building, you can contact the Federal Tax Service to apply for a tax deduction for the purchase of a summer house (Letter of the Ministry of Finance of Russia dated August 26, 2021 N 03-04-05/50118).

Tax deduction when purchasing a garden plot

In what cases can you return 13 percent for the purchase of a garden plot? If the Unified State Register of Real Estate and (or) title documents indicate the types of permitted use of land plots, such as “garden land”, “for gardening”, “for gardening”, “dacha land”, “for dacha farming” and “for summer cottage construction”, then these types of permitted use of plots are considered equivalent. All such plots of land are considered to be “garden plots”. It is allowed to place garden houses, residential buildings, outbuildings and garages on the garden plot.

Therefore, in the case of the construction of a residential building on a land plot acquired in ownership with the type of permitted use “for dacha construction,” the taxpayer has the right to take into account the costs of its acquisition as part of the property tax deduction and issue a tax refund when purchasing a garden plot. In this regard, a tax deduction for the purchase of a garden plot is possible only after receiving a certificate of ownership of a residential building (Letter of the Ministry of Finance of the Russian Federation dated August 30, 2019 N 03-04-05/67066).

How to get a tax deduction when building a country house

If you have built a country house, you will not be able to return the tax (Letter of the Ministry of Finance of the Russian Federation dated September 27, 2017 N 03-04-05/62645, Letter of the Federal Tax Service of Russia dated February 15, 2018 N ГД-4-11/ [email protected] (together with the Letter of the Ministry of Finance dated 02/08/2018 N 03-04-07/7700)). A tax deduction is possible only in the case of construction of a residential building (Letter of the Ministry of Finance of the Russian Federation dated August 30, 2019 N 03-04-05/67066).

Under what conditions can you get a tax deduction when buying a summer house?

Documents for tax deduction when buying a summer house

The condition for a tax refund when purchasing a summer house is to recognize the purchased house as a residential building. In addition, you must have income subject to personal income tax at a rate of 13 percent, as well as the right to receive a property deduction (the ability to obtain a tax deduction for a dacha is influenced by whether you have previously received a property deduction and in what amount).

You can return 13% from the purchase of a summer house, subject to the conditions described above, in two ways: through the tax office or through the employer.

What documents are needed to receive a property deduction through the tax office when buying a summer house? The list of documents submitted to the Federal Tax Service is as follows:

• tax return in form 3-NDFL (original),
• application for refund of overpaid tax (original). From 2021, taxpayers have the right to submit an application for a credit (refund) of the amount of overpaid tax as part of their tax return,
• certificate 2-NDFL (original),
• contract for the purchase of a house (house and land) with annexes and additional agreements thereto (if concluded) (copy),
• documents confirming the taxpayer’s ownership of a residential building, land plot (copy),
• documents confirming payment (copy).

When receiving a tax deduction for the purchase of a house or its share in the property of a child, a birth certificate of the child is additionally submitted.

If a dacha (residential building) was bought by spouses, then they can submit to the Federal Tax Service:

• marriage certificate (copy),
• agreement on the distribution of expenses for the purchase of a house (application for the distribution of deductions) between spouses (original).

We will answer some other questions related to obtaining a tax deduction for the purchase of a summer house.

How to get a tax deduction when buying a summer house with a plot of land in SNT?

A tax deduction for the purchase of a summer house in SNT can be provided on the conditions described above - if the garden house meets the requirements for residential premises and is recognized as a residential building in accordance with regulations, then its owner has the right to receive a property deduction (Letter of the Ministry of Finance of the Russian Federation dated October 29, 2010 . N 03-04-05/7-652);

Is it possible to get a tax deduction when buying a summer cottage?

A tax refund for the purchase of a summer cottage plot is not simply provided. It is necessary to build a residential building on a dacha plot and obtain documents confirming ownership of it. After this, you have the right to receive a tax deduction for a summer cottage and the construction of a house.

If you bought an already built garden house and plot, then you can return the tax only if the country house is recognized as residential.

So, a tax deduction when purchasing a summer house can be obtained only if the constructed garden house is recognized as residential. You have the right to return 13 percent for the purchase of a garden plot after the construction of a residential building on it. If you bought a country house in a gardening non-profit partnership and according to the documents it is residential, then you have the right to apply for a tax deduction when buying a country house in SNT.

Posted by:

Ralenko Anton Andreevich

Moscow 2020

Documents for receiving a deduction

A person can receive compensation for the costs of purchasing a plot of land with a house through deductions in one of the following ways:

• via INFS by transfer to a bank account;
• through the employer due to exemption from personal income tax.

In the first case, after the year of acquisition of real estate, the buyer submits the following documents to the Federal Tax Service:

• declaration 3-NDFL;
• statement;
• certificate (2-NDFL);
• transaction agreement (certified copy);
• payment documents (copy of payment receipt);
• certificate of registration of property rights.

Form 2-NDFL specifies the amount of a citizen’s tax deductions for the year. It is this amount that is subject to refund.

If this amount is less than the total amount to be returned, the arrears are transferred to the next year.

In this case, documents can be submitted by a citizen in person, by mail with a list of documents, or electronically to the Federal Tax Service website.

The Federal Tax Service considers the issue (no more than 3 months) and informs the applicant of the results. If a positive decision is made, then within 1 month the funds will be transferred to the account.

In the second case, the right to compensation for costs through tax deductions can be registered immediately after registering the right to transfer ownership of a plot with a house. In this case, the same documents are submitted to the Federal Tax Service as in the first case, with the exception of the tax return and certificate.

The issue of deduction to the Federal Tax Service must be resolved within 1 month. If the decision is positive, a notice of the right to receive a deduction is sent to the employer’s accounting department. After this, the accounting department stops deducting personal income tax from the applicant’s salary.

What is a tax deduction for the purchase of a summer cottage, and is it issued for a summer cottage plot and a country house?

The concept of a tax deduction is associated with the return of compensation that can be paid to a citizen of the Russian Federation once for the purchase of housing or land.

The amount of compensation depends on the funds spent on the purchase and cannot exceed 2 million rubles.

Usually 13% . That is, a Russian will be able to return no more than 260 thousand rubles for the purchase of a house, apartment, room, plot of land - and, as in our case, a dacha.

Since a dacha includes both a plot and a house, the amount of deduction for a dacha will directly depend on two components:

1. Prices for a plot of land.
2. Price for a country house.

When registering, the fact of real estate registration .

For example, if a house is registered in the name of one citizen, and a plot of land is registered in the name of another, then they can make two returns. But if the owner of the property is one person, then the deduction is issued only to him - it does not matter whether the total cost exceeds 2 million rubles or not.

The cost of real estate must be specified in the purchase and sale agreement, otherwise it will be difficult to return the funds spent.

It is better to indicate in the documentation not a dacha, but a plot of land with a household .

They can also return the interest on the mortgage loan (along with a deduction) if the dacha was purchased with a mortgage.

It is worth consulting with a lawyer to determine the share that the state can return along with a tax deduction.