How to properly maintain accounting records in a homeowners association

The purpose of creating a homeowners association

An HOA is formed for the effective management of real estate owned by the participants of this association. Owners of housing in apartment buildings most often unite in partnerships, but this is not prohibited for owners of private houses located on neighboring plots.

The HOA is formed for:

• maintaining the property of the owners in proper condition;
• its timely repair;
• creating conditions for comfortable living.

In addition, the partnership is not prohibited from engaging in commercial activities and generating income. This could be small paid repair services for residents of the association, the provision of real estate for rent, advertising, etc.

Taxation of HOAs under the simplified tax system in 2021

Registration of a non-profit organization in itself presupposes the conduct of activities not aimed at generating income. A partnership of real estate or housing owners, in particular, is organized for the purpose of managing the common property of an apartment building. However, the possibility of generating income from commercial activities for such companies is also not excluded. Therefore, the main issue in keeping records in the TSN becomes the attribution of certain revenues to the taxable income of the organization.

Article 151 of the Housing Code implies that a homeowners’ association can receive four main types of income:

• mandatory payments, entrance and other contributions of members of the partnership;
• income from the economic activities of the partnership;
• subsidies for ensuring the operation of common property in an apartment building, carrying out current and major repairs, providing certain types of utilities and other subsidies;
• other supply.

It would seem that at least the first type of HOA income should not raise doubts that it is not necessary to include it in the calculation of tax under the simplified tax system, since contributions to a non-profit company are not income. This is confirmed by specialists from the Ministry of Finance in their letter dated December 8, 2010 No. 03-03-07/41. According to this document, the HOA on the simplified tax system, when determining the tax base, does not take into account entrance fees, membership fees, shares, donations, as well as deductions for the formation of a reserve for repairs and major overhauls of common property, which are made to the homeowners association by its members. However, what should be considered contributions in this case?

Based on the provisions of paragraph 2 of Article 152 of the Housing Code of the Russian Federation, the operation, maintenance and repair of real estate in an apartment building are one of the types of statutory activities of the HOA. At the same time, the main source of funding for a non-profit organization, which includes a homeowners’ association, is precisely membership fees. Therefore, one could conclude that the funds coming from the members of the HOA, i.e. homeowners for the maintenance and repair of the house should be considered precisely as membership fees, which do not form the taxable profit of the HOA. And I must say that such logic was quite popular among the managers of partnerships.

Simply put, if the entrepreneurial activity of an HOA is based on such contractual obligations with home owners, within the framework of which the partnership acts as an intermediary, organizing the purchase of utilities in the interests of the owners, then the income of such an organization will not be the payment of these utilities by end consumers. In this regard, there is one rather fundamental point: an agency agreement should be concluded before signing contracts with resource supply organizations, otherwise the very fact of providing intermediary services may be called into question.

But in any case, there will be no problems with deductions for the formation of a reserve for repairs and major repairs of common property, which are made to the homeowners’ association by its members. Such revenues from HOAs do not count as income under the simplified tax system since they are targeted revenues for the maintenance of non-profit organizations and their conduct of statutory activities (clause 1, clause 2, article 251 of the Tax Code of the Russian Federation). Subsidies received from the budget for the same purpose of major repairs will not be considered income.

Since TSN revenues may include both taxable and non-taxable amounts, these organizations are one way or another faced with the need to keep separate records of income and expenses within the framework of their own activities. In the absence of clearly established principles for maintaining separate accounting, all income of the HOA will be treated as taxable.

Sources of partnership funds

Partnership funds can be formed through:

• membership fees, entrance fees, and other similar income;
• subsidies;
• income from the organization's commercial activities.

Money received as membership or other fees does not form the partnership’s income and is used to pay for utilities and maintain housing in proper condition. When carrying out activities and concluding contracts, the HOA must act only in the interests of home owners.

A partnership is not an economic entity created to conduct commercial activities. The list of activities permitted for such organizations is closed and has strict restrictions.

The HOA can carry out:

• maintenance and repair of real estate in the partnership;
• construction of additional real estate;
• provision of premises for rent.

The revenue that goes to the organization’s accounts from this forms special funds. It can be spent in those areas that are provided for by the charter of the partnership.

Taxation of homeowners' associations (TSN) under the simplified tax system in 2021

Registration of a non-profit organization in itself presupposes the conduct of activities not aimed at generating income. A partnership of real estate or housing owners, in particular, is organized for the purpose of managing the common property of an apartment building. However, the possibility of generating income from commercial activities for such companies is also not excluded. Therefore, the main issue in keeping records in the TSN becomes the attribution of certain revenues to the taxable income of the organization.

Accounting statements of the partnership

In accordance with accounting legislation, HOAs are required to generate and submit reports to tax services, the Pension Fund, and statistical authorities. The partnership's financial statements for the year include:

• balance;
• income statement;
• report on the intended use of funds.

The responsibility for accounting and reporting remains with the HOA, even if it does not conduct commercial activities and applies the simplified tax system. In addition to the above forms, the HOA is required to maintain a register of members of the partnership.

Taxes in HOA

When the receipts to the partnership fund for three months are less than 2 million rubles, the company is exempt from paying personal income tax in accordance with Article 145 of the Tax Code. This greatly simplifies the partnership’s documentation. Property fees, the amount of which is set by local authorities, are levied if there are fixed assets. In reality, owners who have housing do not buy property for the TSN fund, which is understandable.

It is necessary to collect less documentation and tax accounting is carried out in a reduced volume.

Tax accounting for homeowners associations

Features of accounting under the simplified tax system

In most cases, the HOA prefers a simplified system. The main advantage of the simplification for HOAs is a reduction in insurance premiums (20% rate). The HOA accountant must distinguish between receipts that are classified as income and amounts that do not fall under this definition and, accordingly, under taxation.

The following income does not count as partnership income under the simplified tax system:

• contributions;
• from the owners for the maintenance of the property;
• from the budget for real estate repairs, including capital ones.

According to the charter of the HOA, the main purpose of its creation is the maintenance of common real estate and the provision of utilities to members of the partnership.

Therefore, all funds received by the partnership for such purposes are not included in the income of the organization. It is necessary to take into account that funds received for these purposes from HOA members are not considered income. But funds received for the same purposes from persons who are not members of the partnership are considered income and are subject to taxation.

Cash receipts that are subject to and non-taxable must be accounted for separately. It is also important to ensure separate accounting of expenditures of funds received as targeted revenues. Therefore, the priority areas of work for an HOA accountant include drawing up cost estimates and distribution of costs, organizing analytical accounting of the organization’s costs.

Paying taxes when using the OSNO regime

Homeowners' associations using OSNO are payers of income tax and VAT.

1. Income tax. Funds related to targeted financing are exempt from the accrual and payment of this tax. These are amounts received from the owners of housing in the partnership for the repair and maintenance of the HOA premises in proper condition. All income and expenses of the HOA must be taken into account separately. If this condition is not met, then the amounts of targeted financing are subject to taxation in accordance with the generally established procedure. Entry, membership, share fees, donations, and funds in reserve for repairs are not subject to taxation. Tax accounting of amounts received as income in HOAs is no different from accounting in other organizations engaged in commercial activities.
2. VAT. HOAs that do not apply special tax regimes are VAT payers. This tax does not apply to targeted funds, the receipt of which is not determined by the commercial activities of the organization. There are VAT benefits for partnerships. The sale of HOA services for the maintenance and repair of premises is not subject to VAT.

Homeowners' association revenues will decrease in 2021 - all about taxes

Membership fees are intended to cover the costs of:

1. remuneration for the work of members of the audit commission.
2. remuneration of the board of directors of the partnership;
3. remuneration of temporarily hired personnel;
4. remuneration of workers who are members of the HOA;

Targeted revenues from other enterprises or individuals aimed at maintaining non-profit organizations (which include HOAs) and for their statutory activities, used for their intended purpose, are not recognized as an object of taxation.

1. Land tax. By analogy with the previous paragraph, it is paid only if the HOA owns a separate land plot. The tax base is the cadastral value. The rate is regulated by local governments.
2. Transport tax. Transferred to the budget if the HOA has special equipment on its balance sheet, as well as freight or passenger transport.

Reflection of transactions on HOA accounts: postings

Business transactions in the accounting accounts are reflected as follows:

Example 1. As a result of the commercial activities of the partnership, a financial result was formed over the year - a profit in the amount of 3,000 rubles. This amount, in accordance with the decision of the HOA members, was spent on landscaping the area in the courtyard of the house. The following entries were made in the accounting records of the partnership:

Tsn and usn

• mandatory payments, entrance and other contributions of members of the partnership;
• income from the economic activities of the partnership;
• subsidies for the maintenance of common property, repairs, provision of certain types of utilities,
• other income.

The HOA uses funds from mandatory payments and contributions to pay for the costs of maintaining and routine repairs of common property in an apartment building, as well as to pay for utilities. They do not generate income. The list of types of economic activities that the HOA has the right to engage in is closed.

• maintenance, operation and repair of real estate in apartment buildings;
• construction of additional premises and common property in the apartment building;
• leasing, renting part of the common property in an apartment building.

Income from such activities is used to pay general expenses or is sent to special funds spent for the purposes provided for by the charter of the HOA (Article 152 of the Housing Code of the Russian Federation). The HOA manages the building as a whole and for this purpose collects funds from all owners of the premises. Not all of them are members of the HOA (Article 143 of the Housing Code of the Russian Federation). Such persons pay a fee for the maintenance and repair of common property in the apartment building and a fee for utilities in accordance with agreements concluded with the HOA (clause 6 of Article 155 of the Housing Code of the Russian Federation). These funds are classified as other income. If all owners of premises in an apartment building are members of the HOA, then settlements with them do not generate income. An exception is remuneration for work and services of an individual nature (subclause 4, clause 1, article 137 of the Housing Code of the Russian Federation).

The common property in the HOA (clause 1 of Article 36 of the Housing Code of the Russian Federation) is accepted for off-balance sheet accounting. A special account is opened for this purpose. The HOA, represented by the board, is obliged to maintain accounting records and prepare financial statements. (Law of January 12, 1996 No. 7-FZ; Article 148 of the Housing Code of the Russian Federation; letters of the Ministry of Construction of Russia dated April 10, 2015 No. 10407-ACh / 04. HOAs can operate both under the general taxation system (OSNO) and under the simplified taxation system (USN). As part of the income of the HOA

• taxable
• non-taxable amounts.

When receiving target revenues, the HOA is obliged to keep separate records of expenses incurred within the framework of the target revenues (clause 2 of Article 251 of the Tax Code of the Russian Federation); it is necessary to ensure the distribution of indirect costs in the HOA. (for example: the basis for the distribution of general expenses may be the area of ​​premises) Costs within the framework of targeted financing are not included in expenses (clause 17 of Article 270 of the Tax Code of the Russian Federation). If separate accounting is not maintained, then targeted financing funds are considered subject to taxation from the date of their receipt. (letter of the Ministry of Finance of Russia dated February 21, 2014 No. 03-11-06/2/7386). If the HOA provides paid services to owners (for example: plumbing repairs), then the costs for them can be allocated based on the share of such revenue in the total amount of revenue. At the beginning of your activity you must:

• create an estimate,

• generate itemized expenses and income for further distribution,
• organize analytical accounting,
• determine the accruals that are maintained in relation to each owner of the premises.

The amount of payments for the maintenance and repair of common property is determined by the management bodies of the HOA on the basis of the approved estimate of income and expenses for the maintenance of common property for the corresponding year (clause 33 of the Rules, Resolution of the Government of the Russian Federation dated August 13, 2006 No. 491).

A real estate owners' association is a non-profit organization whose raison d'être is to perform the functions of independent maintenance, for example, of an apartment building. Subject to standard conditions, a TSN or HOA may apply a simplified taxation system. At the same time, like any legal entity, such a partnership must keep accounting records. What are the features of simplified accounting in TSN?

Accounting for utility bills

It is necessary to pay attention to the procedure for accounting for utility payments received from the owners of premises when applying the simplified tax system in the partnership. The organization's charter may stipulate its obligation to provide such services to its members and enter into contracts with suppliers on their behalf.

In this case, only the difference between the amount of income from utility bills and their cost is subject to taxation, i.e. remuneration to the partnership for the services of an agent. Payments by those property owners who have not entered into a partnership are subject to taxation in full, unless agency agreements are concluded between them and the HOA .

What taxes does the tsn pay for the usn

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Taxation

Each HOA created by the owners of real estate has the right to independently choose a taxation system for itself. Federal legislation provides for the following tax regimes for such partnerships:

During the process of state registration of an HOA, its owners can choose a simplified taxation system. If they do not indicate this in the appropriate application, the HOA will be automatically transferred to the general taxation system. Specialized Internet resources contain step-by-step instructions that will allow property owners to avoid mistakes when carrying out registration activities.

When determining the tax base, accountants of such partnerships must clearly distinguish which of the funds received can be considered income and which will not be taxed. If funds from property owners in the form of contributions for major repairs are transferred to the current account, they will not be subject to taxation. But, at the same time, if funds for the same purposes come from property owners who refused to join the HOA, then they will be considered income of the partnership.

All funds received to the accountant's current account or to the cash desk of the accountant's partnership must be accounted for separately. Also, separate records should be kept in the appropriate registers of all costs that were incurred at the expense of earmarked revenues. Based on the results of each period, accountants must prepare reports that are submitted to regulatory authorities. They must transfer all taxes to the budget within the deadlines established by law. If the requirements of the Tax Code of the Russian Federation are violated, penalties will be applied to the HOA.

A homeowners' association (HOA) is one of the ways to implement the management of housing associations, permitted and regulated by the legislation of the Russian Federation. Despite the fact that the HOA is a non-profit structure, its activities must be subject to accounting rules: accounting and tax.

What are the nuances of accounting operations for HOAs, what kind of transactions are they made out, what are the subtleties of taxation, we will analyze in the article.

Why does HOA need accounting?

From a legal point of view, a homeowners' association is a legal entity. As in any organization, in a non-profit association, activities involve financial dynamics, and therefore are subject to strict accounting and tax accounting.

The creation and operation of HOAs is regulated by relevant legislative acts, such as:

• Art. 135, 136, 148 of the Housing Code of the Russian Federation;
• Federal Law No. 402-FZ dated 06.12. 2011 “On Accounting”;
• Accounting Regulation No. 106n “Accounting Policy of the Organization” PBU 1/2008, approved by Order of the Ministry of Finance of the Russian Federation 06.10. 2008 - in those parts that do not contradict the above Federal Law;
• Order of the Ministry of Finance of the Russian Federation No. 66n “On the forms of financial statements of organizations” dated 02.07. 2010;
• internal accounting policy of the organization.

Based on these regulatory documents, the HOA must keep accounting records and be subject to taxation.

Accounting in HOAs is designed to solve the following problems:

• control over cash flows;
• reflecting finances in correct accounting accounts;
• formation of funds and distribution of received funds.

Since the HOA, from the point of view of legislation, is a legal entity, it must have its own governing body, which means it must have on its staff persons who perform the duties of an accountant: keep records and promptly provide data to the tax authorities, the Pension Fund, and statistical authorities.

Due dates

The completed declaration must be submitted by the responsible person no later than the end of March of the year following the reporting year, in accordance with Part 1, Clause 1, Art. 346.23 Tax Code of the Russian Federation.

When liquidating a housing association, it is necessary to submit a closing reporting declaration to the tax service no later than the 25th day of the month following the month of liquidation of the housing structure (clause 2 of Article 346.23 of the Tax Code of the Russian Federation).

The date for submitting internal reports of the housing association is determined by the charter and the general meeting of the organization’s tenants; as a rule, such reports are presented in early January or late December at the annual meeting of property owners.

So, a simplified tax assessment system can reduce the taxation expenses of a housing association, provided that the organization of residents is large enough and the majority of residents of houses entrusted to the HOA are its members. If there are significant debts of residents (more than 10% of assets) in the housing structure, it is better to use a common payment system.

How and in what documents should it be reflected?

The income and expense components of the financial activities of the HOA must be reflected in the following documents:

1. Income and expenditure estimate.
2. Tax return.
3. Report.
4. Internal documents.

The preparation of annual income and expenditure estimates is the responsibility of the board of the housing association, and the approval of such estimates falls within the competence of the general meeting of residents (Part 3 of Article 148 of the Housing Code of the Russian Federation).

Internal accounting documents are filled out by an accountant and must contain entries (or account assignments) corresponding to each transaction of receipt or expenditure of funds.