Distribution of tax deductions between spouses for the purchase of an apartment

Question:

What is the distribution of property tax deductions between spouses when purchasing an apartment? Why is this needed, and how is it done?

Answer:

As you know, when purchasing a home, our state provides a pleasant benefit to each Buyer in the form of a property tax deduction (Article 220 of the Tax Code of the Russian Federation). This also applies to spouses who purchase an apartment as common property.

What is the essence of the deduction? The state is ready to return to the Buyer 13% income tax on the purchase amount up to 2 million rubles. And also - return 13% of the mortgage interest paid up to 3 million rubles.

In total, the total amount that is returned to the Home Buyer can reach = (2,000,000 rubles x 13%) + (3,000,000 rubles x 13%) = 260,000 + 390,000 = 650,000 rubles. (maximum) .

And such a tax refund is due to each spouse when purchasing an apartment!

Why then distribute the deduction between husband and wife ? For what purpose? For optimization purposes! That is, to ensure that the maximum possible amount from both spouses is returned to the family, and to ensure that this amount is returned as quickly as possible. That's it in a nutshell.

And in order to understand in more detail, you need to understand the following points:

• Can both spouses receive a full for the purchase of one apartment?
• How does the form of ownership the tax refund?
• How are mortgage payments when returning personal income tax to each spouse?
• What is the distribution of tax deductions between spouses for the joint purchase of an apartment, and how does it happen?
• How should the size of shares be established for each spouse when distributing deductions between them (including for mortgage interest)?

A little patience - now we will clarify everything and give examples.

Help in filing a tax return and obtaining a tax deduction can be obtained HERE (SERVICES).

How is the deduction distributed between spouses when purchasing a home in common shared ownership?

If, when purchasing a home, the spouses chose the “common shared ownership” form, then the shares are determined in advance and are indicated in the Certificate of Registration of Ownership (extract from the Unified State Register of Real Estate from July 15, 2016). Despite this, as of January 1, 2014, the property deduction of spouses is not tied to the share of property.

Spouses can distribute the tax benefit at their own discretion: either arbitrarily or depending on each person’s contribution to the payment of the apartment.

This is stated in the Letter of the Federal Tax Service of Russia dated March 30, 2021 No. BS-3-11/ [email protected] , Letter of the Ministry of Finance of Russia dated June 29, 2015 No. 03-04-05/37360, June 01, 2015 No. 03-04-05/31428 , March 10, 2015 No. 03-04-05/12335.

To receive a property deduction and determine the shares of each spouse, you must contact the Federal Tax Service at your place of residence.

A package of documents is submitted to the tax authority, including 3-NDFL declarations and payment documents for the purchase of an apartment. If you decide to redistribute expenses, an application for distribution of deductions is additionally attached.

Let's consider the possible options:

1. Each of the spouses independently paid their share and has supporting documents on hand. This is the simplest case when the benefit is calculated in full accordance with the expenses incurred. To do this, you do not need to write a distribution application.

Example:

In 2021, a husband and wife bought an apartment for 3 million rubles and registered it as common shared ownership. Everyone paid their share independently, which is confirmed by payment documents. The shares were distributed as follows: 990 thousand were paid by the wife (1/3) and 2.1 million by the husband (2/3).

The tax deduction for the wife will be 990 thousand and she will receive 13% of this amount into her account: 128.7 thousand. Despite the fact that the husband’s contribution was 2.1 million, he will receive a tax deduction in the amount of 2 million, since this is the maximum amount established by law. 260 thousand rubles of overpaid personal income tax will be returned to the husband’s account.

2. Each of the spouses independently paid their share and has supporting documents on hand. But the spouses decided to distribute the actual expenses in other proportions, since, according to Art. 34 of the Family Code of the Russian Federation, property acquired during marriage is considered common.

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Example:

In 2021, a husband and wife bought an apartment in common shared ownership. The cost of housing is 4 million rubles. Everyone paid their share independently, which is confirmed by payment documents. The shares were distributed as follows: 25% was paid by the husband, 75% by the wife.

In this case, it is more profitable to issue tax deductions not for payments, but to redistribute expenses equally. Then each spouse will receive 2 million, and 260 thousand rubles of overpaid income tax will be returned to their accounts (520 thousand in total).

3. One of the spouses paid for the housing. A married couple can write an application to the Federal Tax Service and distribute the shares at their own discretion. As we said above, the basis is the new edition of the Tax Code, Art. 34 of the Family Code of the Russian Federation, Letters of the Federal Tax Service of the Russian Federation and the Ministry of Finance.

Example:

In 2021, a husband and wife bought an apartment in common shared ownership and distributed the shares equally. The cost of the apartment is 5 million rubles, all payment documents are issued in the name of the husband. In order for both husband and wife to receive the maximum deduction, a package of documents must be provided to the Federal Tax Service, including payment documents and an application for the distribution of expenses.

In this situation, costs can be divided in half. In any case, the maximum tax deduction will be 2 million for each person, which means that 260 thousand of overpaid personal income tax will be credited to the accounts.

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The application form is filled out by taxpayers submitting a set of documents to the inspectorate to receive a personal income tax refund when purchasing real estate. The form can be completed on a computer or by hand. There is no unified form; applicants can draw up an application using a free template or use the sample recommended by tax authorities, given in letter dated November 22, 2012 No. ED-4-3/

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If the deduction amount is not exhausted in one tax period (within the limit specified in the Tax Code of the Russian Federation), taxpayers will again submit a 3-NDFL declaration next year. It is possible to redistribute the deduction between co-owners in the future only in relation to mortgage interest, and for acquisition costs it is impossible to change the previously selected ratio if the provision of the deduction has already begun (letter of the Federal Tax Service of Russia dated November 14, 2017 No. GD-4-11/23003).

The application for distribution of deductions between spouses is filled out in free form. However, the inspection may offer its own document form, which is developed in accordance with the circumstances of each specific situation. The Federal Tax Service does not have the right to refuse to accept a spouse’s application based on its inconsistency with the form developed by it.

How is the deduction distributed between spouses when purchasing a home in common joint ownership?

Since 01/01/2014, the procedure for obtaining a property deduction when purchasing in joint ownership is practically no different from the procedure for obtaining a property deduction when purchasing in shared ownership.

You have the right to distribute the tax benefit at your discretion in any proportion of shares. In order to receive equal shares, no additional actions are needed - you create a package of documents, including 3-NDFL declarations and applications for deductions, and submit it to the Federal Tax Service at your place of residence.

If you want to assign an individual share to each spouse, then you need to attach an application for distribution of expenses to the general package of documents. In this case, the inspector will take into account your wishes and calculate the deduction in the proportion that you indicated.

Basis - new edition of the Tax Code of the Russian Federation, Family Code of the Russian Federation, Letter of the Federal Tax Service of Russia dated September 18, 2013 No. BS-4-11 / [email protected] , Letters of the Ministry of Finance of the Russian Federation dated March 29, 2021 No. 03-04-05/18320, April 20, 2015 No. 03-04-05/22246, April 08, 2015 No. 03-04-05/19849.

If your home is more expensive than 4 million rubles, then each spouse receives a deduction of 2 million rubles. In this case, you do not need to write a statement about the distribution of expenses.

Example:

While married, you bought a house for 6 million rubles and registered it as joint property. Since the value of the home exceeds the two maximum allowable deductions, both you and your spouse will receive $260,000 in excess income taxes. Total for a family is 520 thousand rubles.

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In the article “Tax deduction when purchasing an apartment, house, plot of land” we described all the nuances, so we will only recall the basic requirements for obtaining a property deduction:

• you are a tax resident of the Russian Federation;
• you have documents confirming the purchase;
• there are documents confirming ownership;
• you did not purchase the apartment from related parties;
• you have not previously used the right to deduct;
• the amount of property deduction cannot exceed 2 million rubles, so the maximum amount you can receive is 260 thousand rubles (13% of 2 million);
• the amount of the deduction cannot be greater than the cost of the purchased property.

Please note an important point:

Shares of the main property deduction can be distributed only once upon application to the Federal Tax Service. Therefore, weigh the pros and cons - you will not be able to change your decision later.

Reason: Letters of the Ministry of Finance of the Russian Federation dated September 7, 2012 No. 03-04-05/7-1090, August 28, 2012 No. 03-04-05/7-1012, July 20, 2012 No. 03-04-05/9-890, May 18 2012 No. 03-04-05/7-647.

Example:

In 2021, a married couple bought a room as joint property. Since the wife is on maternity leave and has no income, the couple decided to distribute the entire tax benefit to the husband. The wife still has the right to deduction, so when buying a new apartment she will be able to receive an income tax refund.

Example:

In 2021, a married couple purchased an apartment as joint property for 3 million rubles. The husband’s salary is higher, so they distributed the deduction in a 2/1 ratio. That is, the husband will receive a property deduction in full and return 260 thousand, and the wife will receive 130 thousand rubles.

Since the amount of the property deduction is not tied to the property, when purchasing a new home, the wife will receive the rest of the deduction.

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Why do you need an Agreement on the distribution of costs for purchasing an apartment?

An application for redistribution need not be submitted if the spouses have not previously returned income tax on real estate, and the cost of the current purchase is 4 million rubles or more. In this case, there is no point in notifying the Federal Tax Service about anything; the tax authorities will automatically, without an application, provide each spouse with the full amount of benefits of 2 million rubles.

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While you are still deciding whether you need to receive a tax refund separately, or whether it is better to submit a single application, we would like to warn you that your initial decision regarding the distribution of shares cannot be changed in the future .

How is the property tax deduction distributed when registering housing for one of the spouses?

Regardless of which of the spouses the housing is registered in and who paid for it, a married couple has the right to distribute shares of the property deduction at their own discretion.

According to paragraph 1 of Art. 256 of the Tax Code of the Russian Federation and Art. Art. 33, 34 of the RF IC, property acquired during an official marriage is common property managed by both spouses. Even if an apartment or other real estate is registered in the name of only one person, the tax authority will calculate the property benefit in the proportion that you indicate in the application.

Reason: Letters of the Ministry of Finance of the Russian Federation dated April 20, 2015 No. 03-04-05/22246, March 18, 2015 No. 03-04-05/14480, March 26, 2014 No. 03-04-05/13204.

Example:

In 2021, a married couple purchased an apartment for 1.5 million rubles and registered it in the husband’s name. The couple decided not to distribute expenses and apply for a tax deduction for the husband.

In this situation, there is no need to write an application to the Federal Tax Service about distribution. The wife retains the right to receive a deduction for housing purchased in the future.

It is established by law that the maximum amount of property deduction is 2 million rubles, but not more than the cost of the purchased housing. In our example, the apartment costs 1.5 million rubles, and the husband received a deduction for this amount (195 thousand to be returned).

This means that the husband has the right to take up the lost part of the deduction from housing purchased in the future.

Attention! Even if the apartment costs 4 million rubles or more and is registered in the name of one of the spouses, the spouses are required to submit an application to the Federal Tax Service to distribute the deduction.

Example:

The apartment for 4 million rubles was registered in the name of the wife, but the spouses decided to both receive tax deductions. They wrote an application to the tax authority and received 260 thousand personal income tax refunds.

Example:

The apartment is registered in the name of the husband, but the couple decided to distribute the entire tax deduction to the wife. They wrote a statement to the Federal Tax Service, where they indicated the wife’s 100% share. The husband still has the right to receive a property deduction for housing purchased in the future.

You can distribute the property deduction even after the spouse for whom the housing is registered has already begun to receive the deduction.

The Supreme Court, in paragraph 18 of the Review of Court Case Practices dated October 21, 2015, ruled that a tax deduction can be distributed to the other spouse at any time without a time limit, but only if the spouses have not previously submitted an application to the Federal Tax Service for distribution .

To do this, you need to submit updated 3-NDFL declarations and write an application to the Federal Tax Service.

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Peculiarities

An agreement between spouses on the distribution of deductions between them requires compliance with certain nuances, which affect the following aspects:

1. Taxpayer identification number. This is a certain combination of twelve digits under which an individual with official income is registered with the tax service. However, due to certain reasons, the wife, husband or both may not have an identification number. In such cases, a dash is simply placed in the corresponding line, and the application is still considered legitimate.
2. Coordinates of the property from which the deduction is divided between individuals, as well as its amount. Since the application is submitted to the tax service not separately, but together with all the necessary documentation, some of the data indicated in it must completely coincide with certain information presented in the tax return. We are talking about the address at which the spouses’ property is located and the amount of deduction for it.
3. Residence address. Applicants are required in the document not to have the address where they currently live, but the one recorded in their passports as a residence permit.

How is the property deduction distributed in case of common joint ownership if the housing was purchased with a mortgage?

After January 1, 2014, the property deduction for mortgage interest is considered a separate type of deduction.

Therefore, spouses can distribute it as they wish, regardless of how the main deduction is distributed.

Basis - pp. 4 paragraphs 1 art. 220 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of the Russian Federation dated May 16, 2021 N 03-04-05/31445, October 1, 2014 N 03-04-05/49106.

To do this, you must submit an application signed by both spouses to the inspectorate. The proportion can be any - 0/100, 20/80, 50/50 or another. Example: In 2021, a married couple purchased jointly owned housing using their own funds and a mortgage.

The cost was 5 million rubles. Despite the fact that the contract was signed for the wife, the spouses decided that they would distribute the main deduction equally, and the husband would receive a deduction for the mortgage interest. This was stated in their application to the Federal Tax Service.

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As a result, the spouses received 260 thousand each for the main deduction, and the husband received an additional 13% of the interest actually paid to the bank.

Important! According to Letter of the Ministry of Finance of the Russian Federation dated November 6, 2015 No. 03-04-05/63984 and Letter of the Ministry of Finance of the Russian Federation dated October 1, 2014 N 03-04-05/49106, spouses have the right to annually change the proportion by which the property benefit on mortgage interest is calculated. This tax benefit is useful if one spouse loses their job or their earnings decrease.

For example, for married couples when the wife goes on maternity leave.

During maternity leave, spouses can distribute the property deduction for mortgage interest entirely to the husband. In the article “” we described in detail the procedure for applying for a property deduction for mortgage interest.

How is the property deduction distributed if the housing is registered as common property with children?

If you register an apartment, house or land plot as joint property with your children, you can receive a tax deduction for their shares. We described all cases in detail in the article “Tax deduction for children when purchasing an apartment, house, or land.”

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Features of repayment of a mortgage loan with two or more co-borrowers

When registering real estate as shared ownership, it is divided into shares, and this decision is recorded in the title documents. Each shareholder submits an application for a deduction taking into account the expenses he has incurred. All costs are documented. If the share is registered in the name of a minor, then the deduction is provided to his legal representative.

When concluding a joint mortgage agreement, there can be more than two people. In this case, the acquired property is registered as shared property.

Deductions for mortgage interest are provided upon application by the owner, indicating how it should be divided between them. The proportions may change each year, but only in terms of percentages. For shared ownership, it is important when the housing was purchased: if before 2014, then the distribution of the main deduction is taken into account; after 01/01/2014 this can be done regardless of it.