How a tax deduction is paid when buying an apartment: rules for receiving a refund

What is a property tax deduction?

According to the legislation of the Russian Federation, when purchasing an apartment, house or land, you can return part of the money in the amount of personal income tax paid in the past.
The tax deduction is described in Art. 220 Tax Code of the Russian Federation. The benefit is aimed at providing citizens with the opportunity to purchase or improve housing conditions. If you officially work, pay personal income tax and purchased an apartment or house, you have the right to return up to 13% of the cost of housing. In addition, you can also get back up to 13% on mortgage interest and some other costs.

About the deduction for the last three or four years

Some citizens, when purchasing real estate, are not aware of the possibility of receiving a deduction. Or they know, but they’re waiting on purpose. This is because there are two main points:

1. The right to receive a deduction is unlimited, i.e. it can be returned at least 10 years after purchasing the apartment - more details. Even if the apartment has already been sold.
2. Personal income tax can be returned for the last three years - clause 7 of Art. 78 Tax Code of the Russian Federation. And for pensioners over the last 4 years - more details. But the period is counted only from the date of purchase of the apartment. If the apartment was purchased under a sale and purchase agreement (“resale”), then from the date of registration of ownership rights - paragraphs. 7 clause 3 of Article 220 of the Tax Code of the Russian Federation and Letter of the Federal Tax Service dated 10/08/2012 N ED-4-3 / [email protected] When purchasing an apartment in a house under construction (new building), the period is counted from the date of signing the acceptance certificate - paragraphs. 6 clause 3 of article 220 of the Tax Code of the Russian Federation and Letter of the Ministry of Finance of the Russian Federation dated March 6, 2015 N 03-04-05/12102.

EXAMPLE No. 1: In March 2015, Andrey bought an apartment for 3.5 million rubles. In 2021, he learned that he was eligible to receive the deduction. Although 13% * 3.5 million = 455 thousand, he can receive a maximum of 260 thousand rubles. He can return the deduction only for the last three years - for 2021, 2021 and 2021.

For the entire 2021, Andrey’s employer withheld 86 thousand rubles from his salary, in 2021 - 88 thousand rubles, in 2021 - 91 thousand rubles. In 2019, Andrey submitted documents. Although for 3 years Andrey’s personal income tax was withheld in the amount of 86 thousand + 88 thousand + 91 thousand = 265 thousand rubles, he returned the maximum 260 thousand rubles. Here it turned out that he received a deduction in one amount.

EXAMPLE No. 2: In December 2021, Marina bought an apartment for 1.9 million rubles. In 2021, she learned of her right to the deduction. Her deduction amount is 13% * 1.8 million = 247 thousand rubles. You cannot receive a deduction before the date of purchase of the apartment, so Marina can only return the deduction for 2017 and 2021.

For the entire 2021, 83 thousand rubles were withheld from Marina’s salaries, in 2018 - 96 thousand rubles. In 2021, Marina submitted documents to the tax office, where she was then returned 83 thousand + 96 thousand = 179 thousand rubles. The balance of the deduction is 247 thousand - 179 thousand = 68 thousand rubles. She will be able to return it in subsequent years.

In what cases can you get a property deduction?

By taking advantage of the property deduction, you can return part of the expenses for:

• acquisition and construction of housing (apartment, private house, room, their shares);
• acquisition of a land plot with a residential building located on it or for the construction of a residential building;
• interest on targeted loans ( mortgage loans ) for the construction or purchase of housing;
• finishing of housing, if it was purchased from the developer without finishing.

Deduction is NOT provided :

• when purchasing real estate from dependent persons: spouse, children, parents, brothers/sisters, employer, etc.;
• if a person has already exhausted his right to property deduction (see One-time deduction).

Features of providing a deduction

In general, the procedure for refunding funds when purchasing a house with land is similar to that for purchasing an apartment. However, it has certain features that can be divided into three components.

1. Acquisition of only land for subsequent construction of a house. In this case, you can submit documentation for a personal income tax refund only after the construction of the house has been completed and a certificate confirming the owner’s rights to it has been received. That is, receiving a deduction only for land on which there is no house construction is impossible. In addition, the plot must be intended for individual housing construction, otherwise it will be impossible to claim a tax deduction.
2. Purchasing a house with land. For a plot on which a residential building is already located, the deduction can be obtained without hindrance. However, in this case, before contacting the Federal Tax Service and filing a deduction, you must register your rights to the house.
3. Registration of a plot with a house on credit . If the purchase of a house and land was made on credit, the overpayment can be reimbursed separately. The amount of deduction provided for interest does not depend on the principal and is not tied to it.

Tax deduction amount

The amount of tax you can get back is determined by two main parameters: your expenses when buying a home and the income tax you paid.

1. In the total amount, you can return up to 13% of the cost of housing or land, but the maximum amount for deduction should not exceed 2 million rubles (that is, you can return a maximum of 2 million rubles x 13% = 260 thousand rubles). Note: for housing purchased before 2008, the maximum deduction amount is 1 million rubles.
2. For each year, you can return no more than you transferred to the personal income tax budget (about 13% of the official salary). At the same time, you can return the tax over several years until you return the entire amount (see When and for what period can you get a tax deduction?)
3. In case of purchasing housing with a mortgage before January 1, 2014, income tax on expenses for paying mortgage interest is refunded in full without restrictions.
4. If the housing was purchased with mortgage funds after January 1, 2014, then the interest deduction is limited to 3 million rubles (that is, you can return a maximum of 3 million rubles from mortgage interest x 13% = 390 thousand rubles. ).
   When purchasing expensive housing, there are situations when the amount returned on mortgage interest exceeds the return on the direct purchase of housing. Please note: the limit on the amount of return for the main property deduction for one person is 260 thousand rubles, the deduction for credit interest is 390 thousand rubles. If an apartment was purchased after 01/01/2014 by married spouses, each spouse can receive a property deduction in the amount of these limits. You can find out more about this information in the article: Peculiarities of obtaining a property deduction when buying a home by spouses.

Example 1: In 2021, Ivanov A.A. I bought an apartment for 2.5 million rubles. At the same time, in 2021 he earned 500 thousand rubles and paid 65 thousand rubles in personal income tax. In this case, the maximum amount that Ivanov A.A. will be able to return it is 2 million x 13% = 260 thousand rubles. But directly for 2021, he will be able to receive only 65 thousand rubles, and 195 thousand will remain for return in subsequent years.

Example 2: In 2021 Vasiliev V.G. bought an apartment for 1 million rubles. In 2021 Vasiliev V.G. I learned about the possibility of a tax deduction and decided to apply for it. In total, Vasiliev can return 1 million rubles. x 13% = 130 thousand rubles. If we consider that Vasiliev earned 400 thousand rubles annually in 2018-2020 and paid 52 thousand rubles in personal income tax, then in 2021 he will be able to return: 52 thousand rubles. for 2021, 52 thousand rubles. for 2021 and 26 thousand rubles. (balance of 130 thousand) for 2021.

Additional and more complex (mortgage interest, shares, etc.) examples of deduction calculations can be found here: Examples of calculating property tax deductions.

Is it possible to apply to the tax office several times for deductions?

The answer to the question depends on when the property was purchased. If before the beginning of 2014, then you can take advantage of the opportunity only once. If later than 2014, the procedure may be repeated. But only on condition that the entire return limit has not been exhausted. That is, the tax office paid less than 260 thousand rubles.

This time frame is due to the fact that on January 1, 2014, amendments were made to the Tax Code of the Russian Federation. The changes affected this point – how many times can property returns be made.

All this concerns a tax refund from the cost of the apartment, but you can also refund the tax on the mortgage interest paid. This procedure can only happen once.

One-time right to deduction

The Tax Code limits the possibility of multiple use of deductions when purchasing a home. At the same time, the restrictions were changed from January 1, 2014 (the changes are described in detail in our article Changes in the property deduction when purchasing a home in 2014).

Currently the restrictions apply as follows:

For housing purchased before January 1, 2014 , you can use the property deduction only once in your life (paragraph 27, paragraph 2, paragraph 1, article 220 of the Tax Code of the Russian Federation). In this case, the purchase price does not matter. Even if you took advantage of a deduction of 10 thousand rubles, you will never be able to receive a larger property deduction when purchasing a home.

Example: in 2013 Sakharov A.T. purchased an apartment for 1.5 million rubles and took advantage of the tax deduction after the purchase. In 2021 Sakharov A.T. bought an apartment again for 2 million rubles. He will not be able to receive a deduction of 500 thousand rubles up to 2 million.

When purchasing a home after January 1, 2014 (unless you took advantage of the deduction earlier), the property deduction can be used several times, but the maximum amount of the deduction that you can receive for your entire life (excluding mortgage interest) even in this case is strictly limited to 2 million rubles (260 thousand rubles to be returned).

Example: at the beginning of 2021 Gusev A.K. bought an apartment for 1.7 million rubles. In September 2021, he also purchased a room for 500 thousand rubles. At the end of 2021 (in 2021) Gusev A.K. will be able to apply for a deduction of 2 million rubles: 1.7 million rubles for an apartment and get 300 thousand rubles for a room.

Please note: If you received only a basic deduction for housing purchased before January 1, 2014, then you can receive a tax deduction on interest when purchasing a new home with a mortgage. You can read more about this opportunity in our article Repeated property deduction for mortgage interest

You can find out more information about the restrictions on receiving a property deduction in the article: One-time property deduction when purchasing an apartment/house.

Tax deduction when buying an apartment in 2021 - 2021

Taxpayers who purchased housing during the reporting period are entitled to a tax deduction. In order to take advantage of this opportunity, the following conditions must be met:

• Availability of income in the reporting period on which personal income tax was paid at a rate of 13%. The exception is dividends. It is not possible to obtain tax deductions for this type of income.
• Purchasing an apartment with your own money or with funds from a credit institution issued for the purpose of mortgage lending.
• Location of housing in the Russian Federation.
• Lack of interdependence between the parties to the transaction. This refers to transactions between spouses, parents and children, etc.

The procedure for obtaining a deduction when purchasing housing is regulated by Art. 220 of the Tax Code of the Russian Federation, which specifies situations when a taxpayer has the right to receive a deduction of this type.

Read about what rules currently apply for deductions for the purchase of housing in this material .

What documents are needed?

To apply for a tax deduction you will need:

• identification document;
• declaration 3-NDFL and application for tax refund;
• documents confirming your expenses;
• documents confirming the paid income tax (certificate 2-NDFL).

You can find a detailed list of documents here: Documents for property tax deduction.

Rules for obtaining mortgage interest deductions

Major changes to the rules occurred on January 1, 2014:

For real estate purchased under a mortgage agreement before 01/01/2014 , there is no limit on the amount of interest deduction. This means that in the 3-NDFL declaration you have the right to indicate all the interest actually paid to the bank and return 13% of this amount to the account.

Example:

In 2010, you took out a mortgage of 10 million rubles. and bought an apartment. From 2010 to 2021 you gave the bank 4 million rubles. percent. You have the right to receive 13% x 4 million rubles into your account. = 520 thousand rubles.

For real estate purchased after 01/01/2014 , there is a restriction. The tax deduction for mortgage interest cannot exceed 3 million rubles.

This means that no matter how much interest you pay to the bank, you can receive no more than 390 thousand rubles into your account. – 13% of 3 million rubles. Even if your interest has exceeded the 3 million mark.

Example:

In 2021, you took out a mortgage of 10 million rubles. and bought an apartment. From 2016 to 2021 you gave the bank 4 million rubles. percent. Despite this, you will receive 13% x 3 million rubles on your account. = 390 thousand rubles.

Have a question or need to fill out 3-NDFL - we will help you!

To get a consultation

When do I need to submit documents and for what period can I get a tax refund?

You can return the money under the property deduction starting from the year in which you have in your hands:

• payment documents confirming expenses incurred for the purchase of an apartment/house/plot;
• documents confirming the ownership of housing : an extract from the Unified State Register of Real Estate (certificate of registration of ownership) when purchasing an apartment under a sale and purchase agreement or an Acceptance and Transfer Certificate when purchasing housing under an equity participation agreement.

If you bought an apartment in the past and did not apply for the deduction immediately, you can do it now (there are no restrictions on the timing of receiving the deduction). The only thing is that you can return income tax for no more than the last three years. For example, if you bought an apartment in 2021, and decided to apply for a deduction in 2021, you will be able to get your tax back for 2021, 2021 and 2021 (detailed information about when and for which years you can get your tax back can be found in our article : When and for what years should I apply for a property deduction when buying a home?

The entire balance of the property deduction is carried over to the next year. That is, you can return personal income tax over several years until you exhaust the entire amount (see Amount of tax deduction).

The entire procedure for obtaining a deduction usually takes from two to four months (most of the time is spent checking your documents by the tax office).

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.

Payment terms

There are several ways to receive a deduction. The time it takes to transfer money will depend on the option you choose:

1. Through the employer – 30 days. Documents can be submitted to the tax office directly in the year of purchase of the apartment. There is no need to fill out a declaration. The inspection will analyze the information received and after 30 calendar days will send a notification indicating the amount of the deduction. An application is filled out at work, after which personal income tax will immediately cease to be withheld from the citizen. The tax that has been withheld since the beginning of the calendar year will also be returned after a written request.
2. Tax office – 120 days. The period of the desk audit takes no more than three calendar months from the date the citizen submits the application and declaration. If the outcome of the review is favorable (a complete set of documents has been submitted, no errors were found), one month after the inspection, the authorized financial authority transfers the funds according to the bank details specified by the applicant.
3. Online service – 120 days. You can register in your personal account by contacting tax officials for help, or yourself on the official website of the Federal Tax Service of Russia: www.nalog.ru. Your personal account has a convenient program for filling out a declaration and all the necessary instructions. In addition, the progress of the verification is displayed, which allows you to independently monitor all stages of consideration of the declaration. As for the deadlines, they are just as long as with a personal visit to the inspection: a desk inspection lasts three months, and then the money is transferred within a month.

Who has the right to return income tax on a purchased house?

The following have the right to receive a tax refund when purchasing a home:

• citizens of the country;
• foreigners who have purchased housing and reside in Russia for more than 183 days;
• persons who are officially employed and deduct 13% of their income to the tax office.

The following are not considered as applicants for the return of amounts after the acquisition of real estate:

• unemployed and unofficially employed citizens;
• students;
• pensioners who do not work after going on vacation;
• minors;
• entrepreneurs operating under a simplified taxation system.

A woman on maternity leave will be entitled to a tax refund after returning to work.

In what cases will benefits be denied?

Refusals to provide a deduction are possible on the following grounds:

• incomplete package of documents;
• ownership is not registered in the state register;
• the house was purchased using maternity capital or payments provided by the state;
• the money transferred as a result of the transaction did not belong to the buyer.

After purchasing real estate, the owner has the right to return tax payments through the employer. An application is submitted to cancel the transfer of income tax to the inspectorate due to the purchase of housing. Documents confirming this are attached to the application.

There is no deadline for contacting the tax authority after the transaction has been completed. If the home was purchased more than three years ago, the applicant will receive a deduction for the three years preceding the date of application.