How to return tax when selling and buying an apartment in the same year and when is offset possible in the same tax period?

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Published: 12/05/2017

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Real estate transactions occur through the transfer of large sums of money by the parties. The legislation provides not only for replenishing the budget from the profit received by the seller, but also for partial compensation to the buyer of the costs of purchasing housing.

• Tax deduction
• Tax deduction for an apartment sold shortly after purchase
• Selling a home after receiving a tax deduction

Under what conditions is a personal income tax refund due when purchasing an apartment?

The tax is refunded to the taxpayer in cases where:

• An individual who has purchased housing or a share in it is subject to income tax at a rate of 13%;
• The acquired property is located on the territory of the Russian Federation;
• When purchasing housing, the funds were paid by the taxpayer himself (the purchase costs do not include: the amount of maternity capital; budget funds with state co-financing; the amount paid by the enterprise).
• Purchase and sale is carried out between persons who are not interrelated (interrelated persons can be an individual and his spouse, parents, children, as well as individuals subordinate to one another by official position).
• The amount of expenses does not exceed the maximum amount established by law of 2 million rubles. If expenses are above the limit amount, then 13% of only two million rubles is returned.

If all conditions are met, then the citizen can return 13% of housing costs.

What is a property deduction when buying an apartment?

People with income in Russia pay personal income tax regardless of citizenship.

• For most Russians, it constitutes the basic part of tax expenses.

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The fee is collected from:

1. salaries;
2. remuneration for work performed under a civil non-labor contract;
3. landlord's income;
4. interest on deposit;
5. lottery winnings;
6. dividends;
7. income from securities.

Property deduction is a benefit that the state provides to personal income tax payers in case:

• sales, acquisitions, assignments of rights to residential real estate;
• similar actions in relation to empty land plots for development (the intended purpose is determined according to the cadastral passport) or plots on which a residential building is already located;
• sale of corporate rights, payment to a co-founder of a share of the property of a liquidated business entity.

The calculation is made according to the formula: personal income tax = D * C, where:

1. D – income;
2. C – rate.

In the above formula, the property tax deduction when purchasing an apartment reduces the “D” indicator. As a general rule, benefits are provided for the full cost of housing.

For a Russian with an average income, this means exemption from personal income tax for several years .

What do the costs of buying an apartment include?

Expenses for the purchase of a house (share in it) or for new construction include the costs of the taxpayer (Article 220 of the Tax Code of the Russian Federation):

• For the development of projects and estimates for construction work;
• For the purchase of building materials;
• For the purchase of a house (share in it), including unfinished construction;
• Related to the completion of housing (shares in it);
• To connect to communications (electricity, gas and water supply, etc.).

The costs of purchasing an apartment (share in it) or a room (share in it) include the following costs:

• To purchase an apartment or room (share in them);
• To acquire rights to housing in a house under construction;
• For the purchase of finishing materials;
• For finishing work, for drawing up estimates, for carrying out repair work.

Costs for finishing materials or connecting communications are included in actual expenses only if the purchase agreement indicates that housing is being purchased without finishing or without communications.

After the taxpayer has received ownership of the purchased housing, he submits a set of documents to the Federal Tax Service Inspectorate (IFTS) at the place of registration to return the personal income tax.

Tax deduction

Possible cases and the procedure for paying monetary compensation for the purchase of real estate are specified in Article 220 of the Tax Code of the Russian Federation:

• the deduction is provided depending on the period of purchase of housing (before 2014 or after);
• the amount of the refund of part of the expenses is 260 thousand rubles (13% of 2 million rubles provided for the purchase of housing, the cost of which in excess of the specified figure is not compensated by the state);
• registration of documents takes place in the year following the year of purchase of the apartment by submitting a declaration completed in the appropriate form to the tax authorities at the location of the purchased residential premises.

Persons who are officially employed and deduct income tax from their wages are entitled to receive a deduction. Amendments made to the Tax Code delimited the procedure for providing tax deductions:

1. For housing purchased before 2014 - a one-time payment, amount up to 260,000 rubles. If the purchase of one apartment does not allow you to return the amount stipulated by law in full, re-registration is impossible (clause 1 of Article 220 of the Tax Code of the Russian Federation, valid until January 1, 2014).
2. Purchasing an apartment after the specified date - it is permissible to apply a deduction to several purchased real estate properties until you receive 260,000 rubles. When during one calendar year a citizen is not paid the deduction in full, he has the right to re-submit an application, declaration and list of established documents to the Federal Tax Service the next year (clause 9 of Article 220 of the Tax Code of the Russian Federation). The amount of the annually returned deduction is equal to the personal income tax withheld for this period.

When you apply for a property deduction through your employer, you can receive monetary compensation in the year you purchased your home.

To do this, with a certificate from the tax authorities confirming the right to compensation and a completed application form, you should contact the accounting department at your place of work, after which the employer stops withholding income tax from wages.

Tax authorities have the right to refuse to provide a deduction when an apartment is purchased from close relatives (related persons - according to Article 105.1 of the Tax Code of the Russian Federation, clause 5 of Article 220 of the Tax Code of the Russian Federation).

Temporary registration in St. Petersburg for citizens of the Russian Federation can be carried out independently or with the help of special companies.

How to properly liquidate an HOA? Find out about this in our article.

Here are detailed instructions that will help you rent a plot of land.

Package of documents required for personal income tax return

Reimbursement of personal income tax is carried out on the basis of documents:

• Tax return form 3-NDFL. Filled out for the reporting year in which the purchase and sale of the apartment occurred. (For more details, see How to fill out a declaration (NDFL3) when purchasing an apartment?).
• Taxpayer's passport (copy);
• TIN certificate (copy)
• Birth certificate of children (if the taxpayer was provided with standard tax deductions in the reporting year);
• Certificate of income (form 2-NDFL) for the reporting year in which the transaction was made;
• An application for a deduction indicating the bank account number where the refunded amount will be transferred;
• Documents that prove ownership of the acquired property (purchase and sale agreement, transfer and acceptance certificates, agreement on the acquisition of housing rights in a house under construction);
• Receipt from the seller of the apartment;
• Loan agreement, if the apartment was purchased with a mortgage;
• Documents that prove the costs of purchasing real estate and its finishing (receipts, payment orders, sales and cash receipts, bank statements, acts for the purchase of building materials, etc.).

A more detailed list of documents is determined individually for each transaction.

You can find more complete information on the topic in ConsultantPlus. Full and free access to the system for 2 days.

How much will they return?

According to the law, the maximum amount of personal income tax refund when purchasing an apartment is 260,000 rubles. This is 13% of 2 million rubles - the maximum property deduction for purchased housing.

Meanwhile, not everyone has the right to count on the specified amount of personal income tax compensation when purchasing an apartment. It may be less. This depends on the sale price of the property under the contract. There are 2 possible situations (see table).

If you have the right to a deduction for the second housing purchased (when the first one cost less than 2 million rubles), then you can get it provided that both apartments were registered as property after 01/01/2014. And with a mortgage, the deduction is allowed only for one apartment of your choice.

How is personal income tax refund processed?

Tax refunds are made in the following ways:

1. At the end of the year in which the transaction occurred, the individual submits the required package of documents to the Federal Tax Service at the place of registration, which are reviewed by the inspector within three months. Upon positive consideration, the Federal Tax Service transfers the tax that was withheld in the past year to the bank account specified in the application.
2. Immediately after obtaining ownership of the purchased housing, the individual submits a package of documents to the Federal Tax Service at the place of registration. Documents are verified within 30 days. After this, the individual is issued a Notice confirming his right to a personal income tax refund. It indicates the name of the employer. An individual provides this Notice to the accounting department of his organization. Starting from the month in which it was presented, personal income tax from the salary ceases to be withheld until full compensation. The notification must be received from the tax office annually and submitted to the accounting department until the personal income tax is fully refunded. If an individual works officially in several organizations, then he has the right to reimburse the tax from each employer.

Reimbursement of personal income tax to an individual for the past year is not greater than the amount of tax withheld from him. If the due tax refund amount exceeds the amount that was returned to him, then the balance due will be returned in subsequent years. To do this, after the end of each year, an individual must submit an income tax return to the Federal Tax Service until the tax is fully returned to him.

Refund of property deduction when purchasing an apartment

The legislator has established two ways to exercise the right:

• refuse to pay personal income tax in the calendar year in which residential real estate was purchased and in subsequent years until the deduction amount is exhausted;
• return personal income tax previously paid to the treasury during the year following the year of purchase of the apartment, as well as in subsequent years.

The personal income tax collection scheme often involves the participation of an agent. An organization paying funds to an individual is obliged to first withhold and transfer personal income tax to the budget.

Example of agents:

1. customer when paying remuneration for work performed;
2. employer when paying wages;
3. bank when calculating interest on a deposit;
4. LLC when paying dividends.

How is the personal income tax refund amount calculated?

The individual receives a refund of 13% of the amount spent on the purchase of housing. At the same time, a limit has been set on the actual costs of purchasing an apartment, which is 2 million rubles. For example, if a citizen bought an apartment for 4 million rubles, then the refund amount will be 13% of only 2 million rubles. If the actual expenses for the purchase of housing are less than the maximum amount (for example, 1.5 million rubles), then the taxpayer has the right to use the remaining portion (0.5 million rubles) when purchasing other housing in the future. Due to changes in legislation, the maximum amount may change. Therefore, what is taken into account is the one that was in effect during the period when the taxpayer first had the right to a personal income tax refund.

If shared ownership is acquired, the compensation is distributed in proportion to the shares between the co-owners.

If joint property is acquired, the distribution procedure is determined by the owners themselves and indicated in the application. For example, spouses can allocate a tax refund so that only one spouse receives it. Then the second spouse can exercise this right when purchasing another home.

If a taxpayer entitled to a tax refund becomes a pensioner, then he can receive a personal income tax refund for the years preceding retirement, but not more than three years.

Is it possible to get a property deduction for previous years?

Unlike, for example, social deductions in the case of property, the legislator does not limit the period for its receipt to the period in which the money for housing was transferred. As follows from paragraph 6, paragraph 3, Article 220 of the Tax Code, the right to deduction arises in the year:

Important! A property tax deduction can be obtained for the period when the right to it arose and for subsequent ones. Taxes cannot be refunded for previous years. An exception is made only for pensioners.

Example 1

Elena bought a share apartment in 2020, and signed the transfer deed in 2020. This means that the right to apply for a deduction arose after the deed was executed. In 2020, the girl filled out an income tax return for 2020. If the returned personal income tax is not enough to close the deduction, Elena will continue to receive it in 2020, 2021, etc. However, you will not be able to get a tax refund for 2020 or 2020 because... during these periods, Elena did not yet have the right to deduct.

If you have the right to a deduction for the purchase of an apartment, income tax refunds can be made for a period limited to 3 years. This follows from paragraph 7 of Art. 78 NK.

Example 2

Leonid became the owner of the house in 2014. He bought the property for RUB 1,950,400. Working as a foreman in a factory workshop, Leonid annually pays personal income tax of 70,200 rubles from his salary. In 2020, he decided to get a tax refund on his home purchase. Since the property deduction is applied for the last 3 years, Leonid filed declarations for the period 2015-2017. According to them, he returned 210,600 rubles. (70,200 × 3) from the required deduction amount of 253,552 rubles. (13% of house expenses). Balance 42,952 rub. Leonid will receive in 2020

If you have questions or need help, please call Free Federal Legal Advice.