Buying an apartment is a very expensive business. After completing the necessary formalities, funds are often required to make repairs and purchase furniture. In addition, in most cases, real estate is purchased with a mortgage, which must be serviced, certain funds must be paid, and so on. And living in an apartment also requires costs - utility bills take up a significant share of each person’s monthly expenses. Therefore, the issue of additional income after purchasing real estate is very relevant. What helps him decide is the opportunity to receive a tax deduction when purchasing an apartment for the previous 3 years.
What it is?
Current regulations provide for the opportunity for any citizen of the Russian Federation to submit documents for a refund of personal income tax paid for the past three years after purchasing an apartment. This opportunity is provided to those who have purchased a plot of land for construction and any other property for living. This right is granted to citizens of the Tax Code of the Russian Federation, and its purpose is to stimulate an increase in transactions for the purchase and sale of real estate, as one of the main industries that are engines of economic growth.
Thus, if the buyer of the premises has worked officially for at least the last three years, which means he has paid all taxes established by law, and purchased residential real estate, then he has the right to receive a property tax deduction. Its maximum value is 13% of the cost of purchasing a home or interest on a mortgage. If a plot of land was purchased on which a cottage was built, then when determining the amount of compensation, the costs of connecting it to utility networks, designing, and calculating estimates will be taken into account. The amount to be returned to the applicant should not exceed the personal income tax actually paid to the budget.
Types of tax deductions
Types of tax deductions vary depending on the grounds on which they arise. The main types include:
- Standard. This is an amount that is returned to certain categories of citizens (Chernobyl liquidators, disabled children), as well as payments for minor children.
- Social types of tax benefits. They are received after spending on education, health, charity, voluntary pension insurance and life insurance. In the latter case, a deduction is issued if the insurance is for more than 5 years.
- IIS. Benefits are also provided for individual investment current accounts. These are special accounts that are designed to work with securities.
- Property deduction. If a citizen has purchased real estate, including with a mortgage, then he is provided with tax benefits. This also applies to the purchase of land, construction, and renovation of an apartment in a new building.
For each type of deduction, there is a limit on the maximum amount by which the tax base is reduced.
You can receive a deduction for training in the following cases:
- for your own studies (the form is not important);
- for the education of children under 24 years of age, but only in full-time education; in addition to a university, it can be a fee-paying school, kindergarten, or any other educational institution;
- Full-time education for a brother or sister (also up to 24 years old).
Documents confirming payment for education must be in the name of the recipient of the payments, otherwise it will not be possible to receive the benefit.
ATTENTION!
If the property is mortgaged, then there is a deduction for the amount spent on mortgage interest, and the limit on this benefit has been increased.
When can I get a property tax deduction?
The right to receive a personal income tax refund arises only when there are confirmed expenses in a number of areas. In particular:
- Purchase or construction of residential real estate, which includes apartments, houses (cottages), rooms and other types of premises where a person can live, and which comply with existing sanitary rules.
- Purchasing a plot of land with or without an existing residential building. In the second case, the type of permitted use of the land plot must allow the construction of residential premises on it.
- Mortgage interest. In this case, credit resources should be used for the purchase or construction of residential real estate. Some banks offer borrowers loans secured by real estate to carry out routine repairs or purchase furniture. If there are loans for such purposes, personal income tax compensation will not be made.
- Carrying out finishing of housing, in case of purchasing it from a developer without one. When registering ownership of housing purchased on the secondary market, repair costs are also not compensated.
Current regulations stipulate that personal income tax deductions are prohibited in the following situations:
- If the housing was purchased from persons who can be considered interdependent (spouses, close relatives, etc.).
- When a person in previous periods enjoyed the right to receive a property tax deduction. It is prohibited by law to issue it more than once.
How is the amount of property tax deduction for previous tax periods determined?
The amount of tax already paid that an applicant can recover is limited by two criteria. The first is the costs incurred in the process of purchasing a home or its construction. The second is the amount of personal income tax that was transferred to the budget.
Current legislation provides for the opportunity to return no more than 13% of the amount spent on the purchase or construction of housing. However, the maximum amount when calculating the amount of compensation should not be more than two million rubles. In other words, if the price of the object was five million rubles, then the amount of personal income tax subject to compensation will still be 260 thousand rubles (13% of two million).
Within one year, you can receive a deduction in an amount not exceeding the amount of personal income tax transfers during that year (this amount, as a rule, is about 13% of total income). You can receive compensation for several years until the entire amount due under the law is paid from the budget.
When purchasing a home with a mortgage, you must take into account the date of purchase. If this event occurred before the end of 2013, then personal income tax is subject to compensation on the entire amount of interest; no restrictions are provided for by current regulations. If the acquisition took place after January 1, 2014, then the amount of interest that is taken into account when providing a deduction is limited to three million rubles, that is, no more than 390 thousand rubles will be reimbursed.
How to fill out a declaration taking into account deductions for previous years?
Deduction for previous years of declaration and the amount carried over from the previous year.
These concepts raise many questions when filling out the 3-NDFL tax return for the return of a property tax deduction.
To understand once and for all, you need to answer the questions:
- What it is?
- Where does it come from?
- How is it calculated?
- How to fill out 3-NDFL?
- What exactly and where should I write in the declaration?
What is a deduction?
The phrase “deduction for previous years of declaration” refers to the topic of property deduction. This means that you can return income tax or personal income tax when purchasing any housing: a house, apartment, room, land.
And again new questions arise. What is income tax? And how can I return it?
Income tax is the portion of funds that individuals pay to the government on their income. It would be correct to call it the personal income tax, or personal income tax. The rate of this tax for Russian citizens is 13%.
As a rule, personal income tax is withheld by tax agents, who are employers. For example, if a citizen receives a salary of 10 thousand rubles, the employer will most likely withhold 13% tax from him, which is 1,300 rubles. And he will receive 8,700 rubles in his hands.
This income tax is refundable. Today there are five types of tax deductions:
- standard;
- social;
- property;
- professional;
- deductions for securities.
In order to take advantage of the property deduction and return the withheld income tax, you must fill out a 3-NDFL declaration.
Where does the deduction for previous years of declaration come from?
To date, the amount of property deduction is 2 million rubles. And 13% of this amount can be returned. And this is 260 thousand rubles.
Now you need to compare this with salary. Let it be 25 thousand rubles per month - or 300 thousand rubles per year. The withheld personal income tax for the year will be 39 thousand rubles. Now let's compare tax relief and income tax. The benefit is more than six times your actual income for the year. How to be?
For the past year, you can only get a refund on the real amount of income - three hundred thousand rubles. That is, 39 thousand is returned. What benefit will remain unspent? You need to subtract 2 million 300 thousand, and you get 1 million 700 thousand rubles.
How to fill out the 3-NDFL declaration when selling an apartment?
How to get a tax deduction for previous years, read here.
How to fill out the 3-NDFL declaration for the annual return of mortgage interest, read the link:
When can you use it again? Only next year, when new income appears and, accordingly, withheld personal income tax.
Now attention! 300 thousand rubles is a deduction for previous years of the declaration. One million 700 thousand rubles is the amount that carries over to the next year.
How to calculate the amount of deduction for previous years of declaration?
Where does the amount transferred from last year come from?
A simple example has already been discussed. You need to complicate the problem and make a calculation. So, we bought an apartment worth 3 million rubles. Accordingly, you can take advantage of a property deduction of 2 million rubles. In the first year, the year the apartment was purchased, the buyer’s salary was 300 thousand rubles. The next year he earned 400 thousand rubles. And a year later his income became 500 thousand rubles.
In the example, the declaration is submitted specifically for this third year, while it is assumed that a refund has already been received for all previous years.
You should add up the income for previous years. This amount will be a deduction for previous years of the declaration. It should be repeated that 500 thousand rubles were earned in the year for which the 3-NDFL declaration is now being submitted. That is, this is the current amount of income, and not for the previous period.
Well, another small problem, now for subtraction. From the 2 million tax credit, all income for three years must be deducted. The result will be 800 thousand rubles. This amount will be the balance carried over to the next year.
Here, income for the current year was taken into account, since it will be used in the current declaration when calculating the refund amount. Therefore, next year the deduction will decrease by the amount received. In the example, the deduction for previous years of the declaration is 700 thousand rubles. The amount carried over to the next year is 800 thousand rubles. You should remember the conditions of this problem.
Next, using a specific example, we will consider what exactly needs to be written down and on what lines, and what numbers should be reflected in the declaration form.
You should consider a living example of exactly which lines should be filled out in the 3-NDFL declaration. The conditions of the problem remain the same. Income for the previous three years was 300, 400 and 500 thousand, respectively.
So, the declaration for the first year is filled out.
An apartment was purchased last year, and this is the first time a deduction has been received for this period. In the column “Amount of actual expenses incurred for the purchase of housing”, write the amount of the tax deduction equal to the cost of the apartment - or 2 million if the cost exceeds this amount.
In the example, an apartment was bought for 3 million. Possible deduction – 2 million rubles.
The size of the tax base is income for the year - 300 thousand rubles.
The balance of the property tax deduction carried over to the next year is 1 million 700 thousand rubles.
What should the declaration look like for next year?
“The amount of expenses actually incurred for the purchase of housing” - the number from last year’s declaration is repeated here.
“The amount of property deduction accepted for accounting for the previous tax period” is a deduction for previous years of the declaration. Since last year the income was 300 thousand rubles, and they received a refund from it, then this number is written here too.
“The balance of the property tax deduction transferred from the previous year” is 1 million 700 thousand rubles.
The size of the tax base is 400 thousand rubles. This is income for the year.
Now all that remains is to calculate the balance of the property tax deduction that carries over to the next year. Income for previous years is subtracted from the tax deduction amount of 2 million rubles. In this case, it was only 300 thousand rubles. Income for the current year is also deducted - 400 thousand rubles. As a result, the balance carried over to the next year is 1 million 300 thousand rubles.
Now the declaration for the third year is being filled out. The amount of actual expenses incurred remains the same - 2 million rubles.
The amount of property deduction accepted for accounting for the previous tax period is a deduction for previous years of the declaration.
Since last year the income was 400 thousand rubles, and the year before 300 thousand rubles, then when these two figures are summed up, the result is 700 thousand rubles.
The balance of the property deduction transferred from the previous year is 1 million 300 thousand rubles.
The size of the tax base in the current year is the income received during the year - 500 thousand rubles.
All that remains is to calculate the balance of the property tax deduction that carries over to the next year. Again you need to subtract. The income for previous years is subtracted from the tax deduction amount of 2 million rubles. This is 700 thousand rubles. And also for the current year - 500 thousand rubles. And the result is a number - 800 thousand rubles.
In all subsequent years, the 3-NDFL declaration is filled out according to the same scheme. And this continues from year to year until the due tax deduction is fully returned.
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Features of provision
It is important to remember that you can only apply for deductions once in your life. This rule applies to housing that was purchased before the end of 2013. The amount of costs, however, is absolutely not important. Even if there is a fact of compensation of only 10 thousand rubles, you cannot apply a second time. If the property was acquired later, the right to deduction can be used an unlimited number of times, and its total amount should not exceed that established by law.
It must be taken into account that the legislation provides for two types of property deductions. The first is the main one, it reimburses previously paid personal income tax on the entire cost of purchasing a home, and the second is the mortgage. Its main task is to reimburse personal income tax on mortgage interest that has already been paid by the borrower. Therefore, if before 2014 a citizen used his right to receive the main deduction, this does not deprive him of the opportunity to receive a personal income tax refund when purchasing real estate using a mortgage. Thus, when purchasing it, you need to evaluate all the possibilities of paying for it. It is quite possible that buying with a mortgage will end up being cheaper due to the compensation received.
How to get a property deduction for previous years?
To receive a personal income tax refund, you must complete the following procedures:
- Collect and submit supporting documents to the tax office;
- Wait for the results of checking their correctness by the regulatory authority and confirmation that you can receive a deduction for the apartment;
- Receive transferred funds.
You can collect and prepare all the necessary forms yourself, or you can turn to professionals. In the first case, there is a high probability of an error, which may result in a refusal to deduct. It should be borne in mind that refusal does not mean that it is impossible to submit the package of documents again. However, there are losses of time, and taking into account inflation, they also turn into monetary losses.
By contacting specialists, you can receive when all the documents have been generated, correctly executed and submitted to the regulatory authority. This will significantly save time and increase the likelihood of a positive decision (refusal in this situation is possible only if you try to receive a refund again or exceed the limit amount).
