What are the Risks When Buying an Apartment Owned for Less than 3 Years?

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Check the seller. First of all, avoid transactions made under a power of attorney, as its validity may terminate even before the registration of the purchase and sale agreement. Also try not to purchase real estate from visiting residents, as scammers often use such persons for their fraud. Before buying, ask the seller why he is selling the home - if it comes into question, treat such a transaction with the utmost caution.
Check out the property. It is necessary to check both new buildings and secondary housing. Pay attention to the number of previous residents, the correspondence of the cost of the apartment and its condition, as well as the correctness of all the owner’s documents. Also at this stage, it is necessary to discuss with the seller all aspects of transferring funds, features of access to bank safe deposit boxes and other nuances.
Check the sales procedure. You should be wary if the apartment is being sold urgently, or at a significant discount that exceeds 15% of the total cost. One should also be suspicious of cases when a property is sold not by the owner, but by his representative. If, under a vague pretext, you are presented with an incomplete package of documents, you can turn around and leave - this will be best for you.

Features of purchasing an apartment less than 3 years old

The sale of an apartment owned for less than 3 years is no different from a regular transaction - to conclude it you will need a completely standard set of papers and procedure:

conclusion of an agreement;
payment;
registration of property with the Unified State Register authority on the part of the buyer;
obtaining an appraisal certificate when applying for a mortgage from the seller;
other standard actions inherent in normal sales transactions.

When selling a privatized apartment, the same rule applies as in other cases - until the 3-year mark is reached, personal income tax must be paid, after which the need disappears.

https://www.youtube.com/watch?v=OUPrwSOo-gM

Also, after the sale of privatized housing, you can issue a refund from the tax service, with the help of which you can significantly save on paying taxes legally.

Donated housing

The donated apartment is also subject to the need to pay tax if 3 years have not yet passed from the date of donation. If you want to save on tax payments, you can issue a cash refund by submitting a tax return to the Federal Tax Service after the transaction is concluded. It will be a good financial cushion in such a situation.

Personal income tax is paid by all individuals on each income. As a result of the sale of an apartment, an individual makes a profit, which means he must pay tax to the state. Today the tax rate is:

For residents – 13%;
For non-residents – 30%.

Payment of tax

13% is a standard state mandatory tax - it is imposed on the sale of your own real estate, which has been owned by the current seller for less than 3 years.

The owner has the right to use a tax deduction in the amount of 1,000,000 rubles once a year. If you plan to sell more than one property in a year, then you can apply the deduction only for one transaction.

Tax accrued at a rate of 13% must be paid on an amount exceeding RUB 1,000,000. If the sale price of the apartment is equal to or less than 1 million, then there is no need to pay tax on the sale of the apartment.

What is - Ownership less than 3 years old

If the seller received property under a gratuitous agreement (for example, privatization, gift or inheritance), then he has the right to a tax deduction of 1 million rubles. If the property right is more than 3 years old, then the seller has the right to a tax deduction equal to the value of the property sold.

If the seller received ownership of the object free of charge - donation, privatization and inheritance , then he can indicate only 1 million rubles in the expense section. The amount of 1 million rubles is determined for one piece of real estate (room, apartment, etc.), and if a share in the right is sold, then the corresponding share of 1 million rubles can be received as a tax deduction.

Fraud options

Most often, the risks of purchasing an apartment and other real estate that has been owned for less than 3 years are associated with fraud. Practice knows many such cases, which allows us to highlight some of the most common schemes:

Carrying out a transaction using forged documents. Not only false documents, seals, and dummies are used, but also a rented apartment, which often belongs to a person who is not at all aware of the fraud. At the same time, it is almost impossible to find scammers, and it is very difficult to achieve justice and return money.
Filing a claim in court to declare the transaction invalid. The claim is filed by the seller in order to regain the property and make money on it. Despite the fact that after cancellation of the contract the buyer gets his money back, this is not the amount that was paid, but less. The fraudster pockets the difference. In addition, do not forget about legal costs.
Selling an apartment to several persons at once. This is done by reproducing notarized copies of documents on which simultaneous transactions are executed. Of course, the seller prepares them in different notary offices. It is extremely difficult to bring such a fraudster to justice, since he usually immediately disappears in an unknown direction.

Purchasing an apartment

Legal registration and security of purchasing a home should be at the highest possible level so that the risk of wasting money is minimal. After all, in this market there are often scammers trying to deceive gullible citizens. In addition, there may simply be legal conflicts between owners, from which the buyer suffers.

Ownership less than three years old

Sometimes in advertisements for the sale of apartments you can see a note that it has been owned for less than three years, but this is a rare case. Sellers usually try to wait this period so as not to pay personal income tax, but even if they need to sell the apartment urgently, and they do not take this tax into account, they prefer not to scare off buyers once again. As a result, he finds out that the seller has not owned the apartment for long, having already arrived for inspection. This happens because it is not only unprofitable for the seller. In such a transaction, the buyer's risks are higher than in a regular transaction.

The most important aspects of reinsurance

The Tax Code specifies categories of owners of housing being sold, for whom the period of ownership is not important.

Firstly, these are persons who purchased housing in a cooperative building of a housing cooperative. Secondly, those who inherited an apartment, but thirdly, this applies to owners of objects, residential real estate built before 1988.

First, you need to figure out at what point the three-year reporting period begins for each document:

By inheritance. If the right to official ownership of completely real estate is received by inheritance, then the period of ownership must be counted from the date of death of the previous owner.
In a co-op. If this is a cooperative apartment, then the tenure is calculated from the moment all cash shares are paid in full.
Until 1988. Until 1988, registration of a certificate of property rights, as well as state registration, was not required.

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Seller. It is better not to enter into an agreement using a power of attorney, since its validity date may expire before the agreement is registered. It is also not advisable to contact visiting sellers. In addition, it is necessary to clarify and, if possible, verify the reason for the sale.
An apartment or other real estate to be purchased, including in a new building. It is necessary to request an extended extract from the house register in order to view the entire list of residents previously living in this area, and to clarify whether there are any among them who can return according to the law. It is important to immediately specify and document the payment method.
The procedure for carrying out the transaction. Urgency or a significantly reduced price for an apartment (more than fifteen percent) is a reason to be wary. The absence of any document in the package is also a reason not to sign the sales contract.

We are required to report to the tax authority about the sold apartment or car the next year after the year of the transaction itself, until April 30. The tax must be paid by July 15.

I want to emphasize one more important detail. The periods of ownership of property for the purposes of calculating taxes may be changed by regional authorities. They are given the right to shorten this period down to zero. Therefore, in each specific region this criterion should be clarified individually.

These are the most realistic and legal ways to sell an apartment owned for less than 3 years and not pay tax. It is likely that the arsenal of these techniques will be replenished thanks to the enterprise and resourcefulness of our fellow citizens.

I wish you happy shopping and don't pay extra fees!

Thorough check

Buying real estate is accompanied by a number of nuances that need to be foreseen in advance. When purchasing on your own, you need to inquire about the history of the apartment. Asking questions is, of course, good, but each answer must be supported by the appropriate document. That is why you need to ask the seller to show not only a certificate from the house register, but also an extended extract from the unified state register of ownership of real estate.

We invite you to familiarize yourself with Sample SZV-M of the supplementary form 2019

From the extract you should find out who is currently listed as the owner of the apartment, who was the owner before, who is now registered in this living space, whether there are any encumbrances, whether income tax has been paid. All documents provided must be originals.

It is important to pay attention to whether minors are registered in the apartment and whether they are co-owners. If any, there must be official permission from the board of trustees for the transaction and other related papers. However, it is better not to mess with such objects at all.

Taxation

When an individual or legal entity is the owner of real estate for less than 3 years and intends to put it up for sale, he, in addition, undertakes to pay the prescribed state tax, the total amount of which is 13%.

It applies specifically to those persons who, in addition, also have the official right directly to the apartment itself for less than three years.

At the same time, interest on tax payments for persons who are not considered residents of the state reaches a level of

In a situation where real estate is in your possession for more than a period of 3 years, it is not subject to tax.

What risks might you face?

The reasons why risks arise for the buyer of an apartment and other real estate that has been owned for less than three or five years are justified by the fact that:

If the apartment was received by the seller under a deed of gift, the donor has the right to return it through the court before the expiration of three years of ownership;
The real estate may be encumbered by the registration of minors or incapacitated persons in it, due to which the purchase and sale agreement may be cancelled;
There is no possibility to apply for a deduction for the tax paid.

Of course, buying such an apartment will not necessarily be burdened with all these troubles. Undoubtedly, there are conscientious sellers who have valid and well-founded reasons for selling a property without causing any problems.

However, if you buy real estate in a new building, you shouldn’t let your guard down. Fraudsters operate here too. In addition, the possibility of an unpaid loan cannot be ruled out.

Ways to reduce income when calculating tax on the sale of an apartment

The most popular way is to wait until the apartment has been in your possession for more than 3 years or 4 years and so on - this is due to the fact that after this period there is no need to pay any taxes.

Another important point is that tax is paid only on the difference in value between the sale and purchase.

If a person bought an apartment (he will buy it - he will not receive the property as a gift or inheritance), and he has documents in his hands that confirm all official expenses during the purchase, then he must pay an official tax (standard amount of 13%) only with a standard differences in the ratio of its purchase and sale prices.

Property deduction

If your official purchase expenses were less than 1 million rubles, then you definitely need to take advantage of the standard deduction when selling housing or land in amounts up to 1 million rubles.

There is another relatively common and very popular option - simply selling your own shares under several different agreements at once.

In the situation of the sale of real estate, which is located in common shared ownership, its full size, retained as a general deduction, should also be distributed among its main co-owners according to all their total common shares.

In the case of the sale of an apartment, the official right to property, which is also shared by several existing owners (any citizens - both citizens of the Russian Federation, but also citizens who do not have Russian citizenship), a tax deduction, which is equal to 1 million rubles and is divided proportionally among all .

Sell an apartment at a price above 1 million rubles, pre-pay the required tax of 13% and return this tax deduction, and purchase another apartment in the same year.

In order to sell your only home, the conditions are standard and at the same time the same, and the sale is carried out taking into account the relevant taxes.

Although this method is one of the most effective, it is the most difficult both in terms of time and effort spent.

In this case, if you personally bought an apartment for real money, then 13% is deducted from the difference between the declared amounts for purchase and sale.

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For real estate objects acquired into ownership after 01/01/2016: Income received by a taxpayer from the sale of a real estate object are exempt from taxation (and declaration) provided that such an object was owned by the taxpayer for the minimum maximum period of ownership of the real estate object and more.

The minimum period of ownership of a real estate property is

3 years

for real estate objects in respect of which at least one of the following conditions is met:

ownership of the object was received by the taxpayer by inheritance or under a gift agreement from an individual recognized as a family member and (or) close relative of this taxpayer in accordance with the Family Code of the Russian Federation;
ownership of the object was acquired by the taxpayer as a result of privatization;
ownership of the object was obtained by the taxpayer - the rent payer as a result of the transfer of property under a lifelong maintenance agreement with dependents.

In other cases, the minimum period of ownership of real estate is 5 years.

For real estate acquired before 01/01/2016, as well as for other property (garage, car, etc.) - the minimum tenure is 3 years.

If the income from the sale of a real estate property is less than 70% of the cadastral value of this property as of January 1 of the year of sale, then for tax purposes such income of the taxpayer is taken equal to the cadastral value of this property, multiplied by a factor of 0.7.

Purchasing an apartment that has been owned for less than three years

Advice from lawyers:

1. My husband recently sold an apartment, he didn’t pay taxes - he owned it for more than three years. Now he plans to buy, but the apartment we liked has been owned for less than three years. The question is... Will we receive a tax deduction for the purchase of this apartment?

1.1. Receive 260,000 rubles.

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2. Yul, hello)) Please tell me... Sashka recently sold an apartment, we didn’t pay taxes, we’ve owned it for more than three years. Now we are planning to buy, but the apartment we liked has been owned for less than three years, or rather, she is now registering ownership of an apartment in a new building and selling it, she bought it under a remote control. The question is... Will we receive a tax deduction for the purchase of this apartment? Thank you)

2.1. Good afternoon You can receive a tax deduction when buying a home if a citizen 1) is a resident of the Russian Federation, 2) will do this for the first time or not for the first time, but within the established limit of 2 million rubles, 3) is officially employed and pays taxes on the income of individuals (not unemployed and not an individual entrepreneur), 4) buys real estate on the territory of the Russian Federation, 5) pays with his own funds or takes out a mortgage, 6) buys real estate not from a close relative or family member. Good luck!

Did the answer help you?YesNo

3. When selling an apartment that has been owned for less than three years, is it necessary to pay tax on the full amount of the sale or on the difference between the sale amount minus the purchase amount?

3.1. When selling an apartment that has been owned for less than 3 years, you can apply a tax deduction in the amount of 1,000,000 rubles. or in the amount of actually incurred and documented purchase expenses (Article 220 of the Tax Code of the Russian Federation) and pay tax on the difference.

Did the answer help you?YesNo

4. During the last 4 months of 2020, I sold an apartment for 1.5 million, which I owned for less than three years, and another apartment for 1.5 million, where I participated in privatization and it was in my ownership for more than 3 years, I bought an apartment in shared construction. The question is that I am an orphan and I don’t know if I need to pay any sales tax and when can I apply for a tax deduction on my purchase?

4.1. Hello. For apartments, you need to submit a declaration in form 3-NDFL by April 30, 2020. In accordance with the norms of the Tax Code of the Russian Federation (Article 220), you have the right to either a deduction or a reduction in the tax base for an apartment that was owned for less than 3 years by 1 million rubles.

Did the answer help you?YesNo

4.2. Hello! For an apartment that has been owned for less than 3 years, you need to pay 13% on the amount exceeding 1 million rubles.

Did the answer help you?YesNo

5. Is a receipt for receiving money when purchasing an apartment by proxy a payment document? Can this be used when calculating income minus costs when selling an apartment that has been owned for less than three years?

5.1. Can this be used when calculating income minus costs when selling an apartment that has been owned for less than three years? No, the contract must be a purchase and sale agreement.

Did the answer help you?YesNo

5.2. Hello, if the receipt is drawn up correctly and contains all the necessary data, then it will have legal force everywhere, including when selling an apartment.

Did the answer help you?YesNo

6. If, when purchasing an apartment, the seller wants to indicate an incomplete amount in the contract, because the apartment has been owned for less than three years. Our bank, through which the mortgage is issued, passes the contract with a lower value. What does this mean for us as a buyer? How is this monitored by government agencies? Will there be any liability?

6.1. Hello! If, when buying an apartment, the seller wants to indicate an incomplete amount in the contract, then it is better not to buy from such a seller at all.

Did the answer help you?YesNo

7. The question is the following: is it necessary to pay income tax on the sale of an apartment that has been owned for less than three years, but the sale amount does not exceed the purchase price of the apartment?

7.1. Hello! In this case, you do not need to pay tax, but you must submit a declaration to the tax office. Article 220 of the Tax Code of the Russian Federation.

Did the answer help you?YesNo

8. I want to sell an apartment that I have owned for less than three years - the apartment was inherited (I did not register ownership) in the same year I want to purchase another apartment. At the moment I am on maternity leave. Will I be able to take advantage of tax offsets when buying and selling while on maternity leave? Do I need to register ownership for this? Will I be able to return the remaining tax amount from the purchase of an apartment after leaving maternity leave?

8.1. Ownership rights must be registered. You can offset the costs of purchasing a new apartment against taxes on the sale of the old one.

Did the answer help you?YesNo

9. We want to sell two 1k apartments, one of which has been owned for less than three years, and immediately buy one larger one (counter purchase), will we be charged tax?

9.1. Hello! There will be no tax if the sale price is not more than the purchase price. The purchase amount is no more than your annual income.

Did the answer help you?YesNo

10. I sold an apartment in 2011, worth more than a million rubles, did not file a tax return for the sale of real estate, but the tax for the purchase of the apartment was partially received, the apartment was owned for less than three years, in the same year I purchased a new building, the construction of which was frozen Until 2020, what punishment do I face?

10.1. Hello! The minimum fine for failure to submit a declaration is 1000 rubles.

Did the answer help you?YesNo

11. I am a pensioner who has not worked for more than three years. I am selling an apartment that I have owned for less than three years, I am buying it immediately, but in another city, it’s already cheaper. Is it possible for me to make a tax offset on sales and purchases? If yes, what is needed? And at the place of sale or purchase?

11.1. Hello! If you sell and buy in the same tax period, you can provide documents on the purchase of a new apartment, thereby reducing the tax base. You need to contact the Federal Tax Service at the place of registration (Article 220 of the Tax Code of the Russian Federation).

Did the answer help you?YesNo

12. I am selling an apartment that I have owned for less than three years, I am buying it immediately, but in another city, already cheaper. Is it possible for me to make a tax offset on sales and purchases? If yes, what is needed? And at the place of sale or purchase?

12.1. Submit BOTH returns - for sale and purchase. GOOD LUCK TO YOU.

Did the answer help you?YesNo

13. Is it possible to submit documents to the tax office for an incomplete year to get a refund of income tax on the purchase of an apartment if I retire this year and sell my apartment, which I have owned for less than three years, and buy another apartment of greater value next year? ?

13.1. Hello. The tax return is submitted for the entire year. What documents are you going to submit in less than a year?

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14. Will it be necessary to pay personal income tax when selling an apartment that has been owned for less than three years, but is the only home? It is planned to simultaneously purchase a larger area using a loan.

14.1. If the cost of the apartment being purchased is greater than the cost of the one being sold, and the transactions were carried out in the same tax period, then you will not have to pay tax.

Did the answer help you?YesNo

15. We sell 3 km. communal apartment for non-residential purposes, i.e. above market value. Two rooms have been owned for more than 3 years, one less. The realtor advises selling with three contracts with a difference of one day in filing for registration. We put 90% of the sale price on two rooms that have been owned for over 3 years, and sell the third room at the purchase price. Does the tax office have grounds for making claims? Thank you!

15.1. Hello! Your transaction may be considered imaginary, but as a rule, the Federal Tax Service is loyal to such transactions.

Did the answer help you?YesNo

16. In 2014, we sold an apartment that had been owned for less than three years. In the same year, we bought an apartment for more than we sold. Both the sold and the new apartment are in common joint ownership. I received a tax deduction from the purchase sold. The husband refused. In this regard, the question is: is it possible to offset deductions from the sale and simultaneous purchase of apartments in the same tax period? Is my spouse entitled to a deduction from the purchase of a new apartment due to changes in the Tax Code? Thank you.

16.1. You can get a tax deduction once in your life. File an application with the tax office.

Did the answer help you?YesNo

16.2. Hello! According to Article 220 of the Tax Code of the Russian Federation.

Did the answer help you?YesNo

17. When selling an apartment that has been owned for less than three years, is it necessary to file a declaration if the sale amount is equal to the purchase amount? Thank you.

17.1. Yes, you need to submit (Article 220 of the Tax Code of the Russian Federation)

Did the answer help you?YesNo

18. For several years in a row I made a personal income tax refund for the purchase of an apartment. In 2013, I sold another apartment (owned for less than three years) and bought another apartment with this money. The tax office says that I only have the right to use a deduction of 1 million rubles and the balance of the amount from which I did not reimburse the personal income tax for the first apartment, and I cannot use the amount of actual expenses incurred to purchase an apartment in 2013 for a deduction! Why?

18.1. It’s hard to say why, maybe because they’re illiterate). When selling, you can use a deduction of either 1 million or actual expenses incurred, because you choose which will be more profitable for you to pay the least tax.

Did the answer help you?YesNo

19. If I purchase an apartment that has been owned by the seller for less than three years and was resold several times before my purchase, then theoretically the transaction can be declared invalid, and the apartment can be returned back to the first (second) owner of the apartment from the resale chain within three years from the moment of the transaction by the first (second) owner of the apartment from the resale chain? Art. 181 Civil Code?

19.1. Theoretically, yes, but if by law, then only if the claim for the recovery of property from someone else’s illegal possession is satisfied.

Did the answer help you?YesNo

20. If I owned real estate for less than three years and sold it, then I pay tax on the amount that exceeds 1 million rubles. If I have owned the property for more than three years, I do not pay personal income tax on the purchase price. The start date of ownership should be considered the registration of ownership of the apartment or the date of the transaction, i.e. the date of the purchase and sale agreement (or assignment - in my case) and the transfer and acceptance certificate?

20.1. Ownership of real estate arises from the date of state registration of ownership. The three-year period should be counted from there.

Did the answer help you?YesNo

I want to sell an apartment that I have owned for less than three years (donation agreement from my husband)

The owner sells the apartment for the same amount (2,600,000 rubles) for which it was purchased.

We, a family of three, are selling a privatized apartment that has been owned for less than three years.

I want to sell a 3-room apartment, which I have owned for less than 3 years, and buy three one-room apartments.

In 2010, I sold a room for 1,700 thousand rubles, which had been owned for less than three years, and immediately bought an apartment.

When selling an apartment for more than 1 million rubles, which has been owned for less than three years, do I need to pay tax (13%)

I, an old-age pensioner who has not worked for more than three years, will have to pay tax on the sale of an apartment (3-NDFL)

Which has been in my ownership for less than three years for 9,000,000 rubles.

Is it necessary to pay personal income tax at a rate of 13% on an amount exceeding 1 million rubles when selling an apartment?

Question about property deduction. If I sell an apartment that has not yet been registered with the property, but the transfer and acceptance certificate has been signed, do I have to pay personal income tax?

I want to sell an apartment that I have owned for less than three years,

Calculation of property deduction

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1,000,000 rubles is the maximum amount of tax deduction by which income received from the sale of residential houses, apartments, rooms, dachas, garden houses, land plots, as well as shares in the specified property can be reduced;

250,000 rubles is the maximum amount of tax deduction by which income received from the sale of other property (cars, non-residential premises, garages and other items) can be reduced.

Instead of applying a property deduction, the taxpayer has the right to reduce the amount of income received from the sale of property by actually incurred and documented expenses directly related to the acquisition of this property. In certain situations, this may be more profitable than using a property deduction.

We invite you to familiarize yourself with How to register a garage as a property if there are no documents in 2020?

When selling property that is in common shared or common joint ownership, the corresponding amount of property tax deduction (1,000,000 rubles or 250,000 rubles) is distributed among the co-owners of this property in proportion to their share or by agreement between them (in the case of the sale of property located in common joint ownership).

If the taxpayer sold several pieces of property in one year, the specified limits are applied in the aggregate for all sold objects, and not for each object separately.

If the amounts received from the sale of property do not exceed the specified limits, then the obligation to submit a declaration remains, and the obligation to pay tax does not arise.

Calculation example

In 2020 Kotov S.A. sold the apartment for 3,000,000 rubles, which he bought in 2020 for 2,500,000 rubles.

Since the apartment was owned by Kotov S.A. less than the minimum ownership period, in relation to the income received from its sale, he is required to submit a personal income tax return for 2020.

When declaring a property tax deduction in such a declaration, the taxable income of Kotov S.A. will be 2 million rubles, and

Personal income tax = (RUB 3,000,000—RUB 1,000,000) x 13%=RUB 260,000

If Kotov S.A. will declare in the declaration not a property deduction, but will reduce the income received from the sale of the apartment by the amount of documented expenses, his taxable income will be 500,000 rubles, and personal income tax will be 65,000 rubles:

Personal income tax = (3,000,000 rub. -2,500,000 rub.) x 13% = 65,000 rub.

Calculation example

Income of Ivanov N.V. from the sale in 2020 of an apartment purchased in 2016 amounted to RUB 2,100,000.

The cadastral value of the apartment as of January 1 of the current year, in which state registration of the transfer of ownership of this apartment was carried out, amounted to 3,300,000 rubles. There are no documented expenses for purchasing an apartment.

The tax base for personal income tax in this case is determined with a reduction factor applied to the cadastral value of the apartment equal to 0.7.

Cadastral value of the apartment taking into account the reduction factor:

RUB 3,300,000x0.7 = RUB 2,310,000

Since the income of Ivanov N.V. from the sale of an apartment is less than the cadastral value of the apartment, taking into account the reduction factor of 0.7, for tax purposes the tax base will be: RUB 2,310,000.

At the same time, Ivanov N.V. has the right to claim a property tax deduction in the amount of 1,000,000 rubles.

Personal income tax will be calculated by the taxpayer as follows:

(RUB 2,310,000—RUB 1,000,000)x13%=RUB 170,300

Calculation of personal income tax when selling an apartment

According to clause 17.1 of Article 217 “Income not subject to taxation” of the Tax Code of the Russian Federation, the taxpayer is given the right not to pay tax when selling an apartment if it has been in his ownership for more than three years. In this case, it does not matter whether a person lived in this apartment or not - the only important thing is that he has in his hands a certificate confirming his ownership, which was issued more than three years ago. The date of issue indicated in this document is considered the starting point for this period of time, which can be relied upon when filing a declaration with the tax authorities.

If the property has been owned for less than three years, then it is necessary to pay personal income tax when selling the apartment

, the rate of which is 13%. In this case, you can use 2 options for calculating tax, each of which will be beneficial under certain circumstances. These include:

use of property deductions provided by the state.
At the moment, the property deduction is equal to 1 million rubles. (paragraph 1, paragraph 2, article 220 “Property tax deductions” of the Tax Code of the Russian Federation), which is used to calculate the taxable base. So, this deduction is subtracted from the cost of the apartment indicated in the purchase and sale agreement, and then the resulting difference is multiplied by the tax percentage rate (13%).
For example, if an apartment was sold for 2,150,000 rubles, then the calculation of the tax payable to the budget will be: (2,150,000 - 1,000,000) * 13% = 149,500 rubles.
It is necessary to take into account that the cost of the apartment may be less than 1 million rubles. For example, if it is 950,000 rubles, then there is no need to pay personal income tax, and the calculation itself will have the following picture: (950,000 - 1,000,000) * 13% = - 6,500 rubles.
Since the value is negative, the taxpayer is given the right to be exempt from paying tax to the budget.
using a formula for calculating “income - expenses” According to paragraph 2, paragraph 2, Article 220 “Property tax deductions” of the Tax Code of the Russian Federation, the taxpayer is given the right not to use the legal property tax deduction, replacing it with the opportunity to reduce the income received from the sale of an apartment. Thus, the income that was received in carrying out a transaction of this type is reduced by the expenses that were initially incurred when purchasing this property. It should be noted that all expenses must be documented and supported by relevant documents, otherwise the tax authorities may not take them into account.
This option is very convenient in a situation where the amount of confirmed expenses will be more than 1 million rubles, otherwise there will be no point in it. For example, if an apartment was sold for 2,150,000 rubles, and the costs of its initial purchase or construction were 1,200,000 rubles, then the calculation of the tax payable to the budget will be: (2,150,000 - 1,200,000) * 13% = 123,500 rub.
It should be noted that the expenses used to calculate tax can be very diverse, for example:
- development and analysis of design and estimate documentation for new construction;
costs for the direct purchase of an apartment, both on the secondary housing market and in a building under construction;
expenses for payment for work or services related directly to construction or finishing activities;
costs of connecting various communication networks (water supply, gas supply, sewerage, electrical networks).

In addition, it is necessary to take into account that if the apartment was not purchased, but received by inheritance or as an object of gift, then there will be no expenses used to reduce the taxable base. In this situation, it is advisable to apply a property deduction, which to a certain extent will reduce the base for calculating personal income tax.

How to get a deduction

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The property deduction associated with the sale of property, in contrast to the deduction associated with the purchase of housing, can be applied unlimitedly, but subject to the limitation of the maximum amount of the property tax deduction (1,000,000 rubles or 250,000 rubles) in the tax period. In order to exercise the right to deduction, the taxpayer must:

1Fill out a tax return at the end of the year.

Form 3-NDFL

2Prepare copies of documents confirming the fact of sale of the property. For example, copies of property purchase and sale agreements, exchange agreements, etc.

3If the taxpayer claims a deduction for the amount of expenses directly related to the acquisition of the property being sold, additionally prepare copies of documents confirming such expenses (cash receipts, sales and cash receipts, bank statements, payment orders, receipts from the seller for receipt of funds, etc. ), as well as other documents confirming the fact of acquisition of the apartment being sold, for example, a sales contract.

4Submit to the tax authority at your place of residence a completed tax return with copies of documents confirming the right to receive a deduction when selling property.

When submitting copies of documents confirming the right to deduction to the tax authority, you must have their originals with you for verification by a tax inspector.

Go The most convenient way to fill out a tax return and submit it, as well as supporting documents to the tax authority, is online using an Internet service

“Taxpayer’s personal account for individuals”

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1,000,000 rubles – the maximum amount of tax deduction by which income received from the sale of residential houses, apartments, rooms, cottages, garden houses, land plots, as well as shares in the specified property can be reduced;

250,000 rubles is the maximum amount of tax deduction by which income received from the sale of other property (cars, non-residential premises, garages and other items) can be reduced.

I believe that with the children’s share no income was received from the sale of the property

Article 217. Income not subject to taxation (exempt from taxation)(.)

Example 1: an apartment was purchased 1 year ago at a price of 2 million rubles. Currently on sale for 4 million rubles. We calculate the tax: Since the income is not subject to taxation, then there is no need to submit a declaration when selling an apartment (owned for more than 3 years).

Let's consider a situation where you bought an apartment, owned it for less than 3 years and decided to sell. You must pay 13% tax on the amount you receive, reduced by 1 million rubles (tax deduction). You have a certificate of ownership, a purchase and sale agreement and documents confirming the fact of payment for the apartment. In this case, you can refer to paragraph 2 of subparagraph 1 of paragraph 1 of Article 220 of the Tax Code of the Russian Federation:

Instead of using the right to receive a property tax deduction provided for by this subparagraph, the taxpayer has the right to reduce the amount of his taxable income by the amount of expenses actually incurred by him and documented expenses associated with the receipt of this income

17.1) income received by individuals who are tax residents of the Russian Federation for the corresponding tax period from the sale of residential houses, apartments, rooms, including privatized residential premises, dachas, garden houses or land plots and shares in the said property that were owned by the taxpayer three year or more, as well as when selling other property that was owned by the taxpayer for three years or more.

If the seller (provided that he is a tax resident of the Russian Federation) has owned the apartment (or other real estate) for more than three years, then the income from the sale of the apartment is not taxed (Article 220 of the Tax Code of the Russian Federation). A frequent question that arises in this regard is whether it is necessary to file a tax return if the apartment being sold has been owned for more than 3 years? In this case, the answer must be sought in Article 217, Clause 17.1 of the same Tax Code:

Sale by proxy

If the buyer is completely satisfied with the apartment being sold, which has been owned for less than three years, but is sold by an intermediary by proxy, then he should be very careful. It is this type of fraud that comes up most often, although this is not a pattern.

In order to reduce existing risks, you need to seek help from a notary at the initial stage of completing the transaction. A qualified specialist knows what to pay attention to and where there may be pitfalls that an ordinary citizen may miss through inattention or ignorance. The costs of a notary are considerable, however, this way you can be sure that the transaction is safe. In the case of self-registration, having fallen for a fraudster, the buyer will lose much more than the cost of the specialist’s services.

Transactions are no less dangerous if the apartment, which has been owned by the seller for less than three years, was inherited by him. This is due to the fact that during this period other heirs who, for some reason, have not entered into their rights, can go to court and restore them. If their claim is satisfied, all real estate transactions will be canceled. The money spent on the purchase will be returned, but the funds that went to paperwork, repairs and other expenses will not.

How else can you be safe?

There are quite a few people who want to deceive, but if the buyer is attentive and understands all the features, it will be difficult to deceive him. Even if everything looks legal and correct, you need to pay attention to:

Apartments that are sold by proxy should be on your guard. The danger here is that the power of attorney may expire before the property rights are re-registered. Another danger is the possibility of canceling the power of attorney by those who wrote it out without informing the authorized person about it. As a result, the transaction is declared invalid by the court.
You need to request an extract from the house register; it will indicate everyone who applies for this living space and has the right to live on it. If minors are indicated, it is better to refuse to purchase such real estate.
You should not agree to buy an apartment that is too cheap compared to the market value. Excessive haste and nervousness should also alert you.
If the apartment was received through a gift agreement, the donor has the right to request the return of the property within 3 years.
Purchasing an apartment that was inherited. This also has its own subtleties, because the process of registering an inheritance could have violated the rights of other heirs, for example, they were not informed about the existence of such real estate. In this case, the transaction can be challenged in court, and in most cases, the new owner loses such cases.

If there was fraud, then the only option to get your money back is to go to court. But this is only possible if the scammers have not disappeared without a trace, which is extremely rare. It is in court that both the buyer and the seller can challenge the transaction.

We invite you to familiarize yourself with Houses for demolition in Swao

How to sell a home with several owners

Methods for minimizing taxes when selling property owned for less than 3 years are the same as when owning an object for less than five, but more than three years. If you manage to avoid paying tax by owning an apartment for less than three years, you can do the same with an object you have owned for less than 5 years.

We suggest you read what to do if you become insolvent on a loan

Method 1

1 million – 1 million = 0

The tax base itself disappears, turning into zero, and from zero no duties are paid.

Flaws:

A very small percentage of transactions are in the price range of up to 1 million rubles;
The tax benefit can only be used once a year. You will not be able to sell multiple apartments within one calendar year and apply the deduction each time.

Of course, the seller can artificially lower the contract amount, but there is a danger that the value of the property on paper will become less than the cadastral price multiplied by a reduction factor of 0.7. In this case, the law will not pay attention to the content of the contract and will simply calculate the volume of your obligation based on the cadastral price as described below.

The solution here may be to find out the cadastral value of the home as of January 1. The cadastral valuation may be noticeably lower than the market value, especially in the secondary housing segment.

In addition, you may find that your property, for some reason, does not have a cadastral valuation at all. Then it is impossible to rely on cadastre data and you can determine the sale price yourself.

Another reason why clarification of the cadastral valuation is useful is the prevention of possible penalties. An old property can indeed be sold inexpensively, cheaper than 70% of the cadastral valuation. In this situation, tax authorities will not only pay attention to this, but will also consider it an evasion of payment. For such offenses, a fine of 20% of the amount of tax lost by the budget is provided.

Method 2

This method is appropriate if the home was sold for the purpose of purchasing another apartment or house. You can deduct 13% of the cost of purchasing a new home from the tax you must pay.

Moreover, this method is interesting for its additional opportunities to reduce the tax base and the prospect of returning funds from the budget. Let me explain.

For example, during one calendar year you sold an apartment worth 2.5 million rubles and purchased another property worth 4 million rubles.

(2.5 million – 1 million) x 13% = 195 thousand rubles.

195 thousand rubles is the size of your tax liability.

However, during the same year you purchased an object worth 4 million rubles. This does not mean that you can claim a deduction from the entire purchase price, since the law limits the price of purchased housing for tax deduction purposes to two million rubles. Therefore, having made such a purchase, the amount of tax deduction will not exceed 260 thousand rubles (2 million rubles x 13% = 260 thousand rubles)

You owe the state - 195 thousand rubles.

The state owes you 260 thousand rubles.

Total: you can return 65 thousand rubles from the state budget. (260 thousand – 195 thousand = 65 thousand)

Please note, no distortions or abuses, only knowledge of the law.

Flaws:

As noted above, the funds that you can deduct from your tax liability are no more than 260 thousand rubles;
Both transactions - purchase and sale - must take place within one calendar year;
You can use a tax deduction when buying a home once in your life. The size of the salary is not important.

It is important to take into account that in the case when real estate is owned by several owners at once, its sale can be carried out either with the execution of several separate agreements on the purchase and sale transaction of its individual shares and, of course, without separating them (in one agreement). In the second case, this is carried out by joint agreement between both parties.

Attention to the drawn up contract

When concluding an agreement to purchase an apartment that has been owned by the seller for less than three years, you should read the entire document very carefully, from the first to the last character. It is not necessary to have the agreement certified by a notary office, but it will be more reliable for both parties if the transaction is clean.

Mandatory clauses of the purchase and sale agreement:

Indication of the place and date of its compilation;
Personal passport details of each participant in the transaction, including registration addresses that match the originals;
Description of the characteristics of the apartment being purchased, the form of ownership, as well as an indication of the documents on the basis of which ownership rights were obtained from the seller;
There is no guarantee that the apartment is not encumbered and there are no persons who have the legal right to live in it;
The final cost of the property in full;
Deadline for complete vacancy of the apartment by current residents.

Important points when drawing up a contract

Involving a notary in drawing up a purchase and sale agreement is not necessary, but is highly recommended if you are purchasing an apartment for the first time.

To begin with, it is worth obtaining an extract from the house register, which will show who is registered in the living space of interest. The next step is to contact the Unified State Register of Registered Entrepreneurs with a request to receive an extended statement that will show the following information:

who is the owner of the apartment;
who previously owned this living space;
list of registered persons;
data on payment of income tax on real estate;
whether there is an encumbrance.

For such a certificate you will need to pay a state fee, but its size cannot be compared with the funds that the buyer risks.

It is imperative to compare the original apartment plan with the existing one.

Of course, you need to pay attention to filling out the contract. It must be drawn up legally, otherwise it can be challenged in court. The contract must contain the following information:

Date and place of conclusion of the agreement.
Full identification data of the parties, including full name, passport, TIN, registration.
Characteristics of the property, including full address, cadastral number, information from housing documents.
Certificate of absence of encumbrances.
Price.
Deadlines for vacating living space by previous residents.

What to do if, despite all precautions, fraud still occurred? File an application with the court immediately. Only through the court is it possible to return funds.

Today, the following tax features depend on the period of ownership of housing for more or less than three years:

Persons selling apartments that they have owned for more than three years are exempt from paying tax on funds received as a result of the sale of housing.
First-time buyers of a home that has been owned by the seller for more than three years receive a tax refund on the amount paid for the apartment.

Accordingly, if the apartment has been owned for less than three years, you cannot count on such tax breaks.

For this reason, it is recommended to buy and sell housing only after three years of actual and legal possession of it.

In addition, three years are noted in the civil procedural law as the maximum period during which individuals can appeal a home sale transaction.

the document must include the following mandatory items:

The date and place of its compilation.
Passport details of both parties to the transaction, including the registration addresses of each participant.
Detailed characteristics of the property, designation of the form of ownership and details of the seller’s title documents.
Statement of the absence of encumbrances and persons whose rights may be infringed by the fact of concluding a transaction.
The cost of the subject of the contract.
The date of vacating the apartment by the previous residents and the final delivery of the property to the buyer.

standard apartment purchase and sale agreement
apartment purchase and sale agreement

Deadlines for submitting certificates and payments

The declaration must be submitted in the year following the purchase by April 30. The tax in accordance with this declaration must be paid before July 15. You can work with the forms yourself; there is nothing complicated about them. Or you can turn to professionals.

Documents that must be provided along with the declaration:

A copy of the certificate of ownership.
A copy of the purchase and sale agreement and the acceptance certificate.
Copies of payment documents. In the case of a transaction between individuals, the phrase in the coolie-sale agreement “all funds received in full” is sufficient.
Documents confirming acquisition costs, if necessary: purchase and sale agreement, transfer deed, payment documents.
Donation agreement for the sale of a donated object.
Cadastral passport, if the contract price is low, the object was donated or inherited.
Copy of the passport.
Application for deduction from sale.
To receive a deduction from a purchase, a separate package of documents is required.
Inventory of transferred documents.

You can send documents by mail or bring them in person to the tax authorities. You can also transfer papers by power of attorney certified by a notary. It is recommended that you keep one copy of the entire package for yourself. Don't forget to pay the tax after submitting your return.

How to protect yourself?

First of all, you need to make sure that the seller is not a scammer. To do this, you need to request all title, cadastral and technical documentation for the apartment. In addition, request the seller’s civil passport and identify the passport’s compliance with the documentation.

ATTENTION: The seller must provide originals of title documentation and extracts from the Unified State Register.

Passport data must be carefully examined and the last name of the intended owner must be remembered. You also need to write out the cadastral number of the apartment. On the Rosreestr website you can identify an object by cadastral number and find out who it belongs to. Do the same by contacting the MFC with a request for an apartment.

Information about the owner of the apartment is publicly available and can be provided to third parties. If a certificate of inheritance or a deed of gift is presented as a document of title, then you need to verify their legal capacity as follows:

Such documents are issued and certified by a notary, which can be verified by submitting a request to the notary about the fact of a notarial act.
Information about them is entered into the state cadastre and can be obtained through the MFC.

More on the topic: Registration of a transaction for the purchase and sale of an apartment - step-by-step instructions

The certificate of inheritance indicates the circle of heirs who inherited the apartment; each of them must present:

notarized consent to sale and power of attorney;
refusal of real estate in favor of the seller, certified by a notary.

In addition to these precautions, you need to ask for an extract from the Unified State Register, which contains information about the owner. This data must identify the individual who is the seller and correspond to the passport data. If the surname has changed during this period, documents are presented confirming the legality of the surname change.

For example, a marriage certificate. And most importantly, do not under any circumstances agree to replace the information in the purchase and sale agreement. The price of the object must exactly correspond to the amount that was paid by the buyer under the transaction, taking into account the payment of an advance or deposit (we talked about the difference between an advance and a deposit, how a deposit differs from them and what is better for each of the parties to the transaction). separate article).

If unlawful actions on the part of the seller are revealed, then even after transferring the contract for registration, it is permissible to suspend registration actions by submitting an application to the MFC until registration is completed.

Challenging the transaction

If the buyer needs to challenge and cancel the transaction concluded with the seller after purchasing an apartment that has been owned by the seller for less than three years, this can only be done through the court. Such cases usually arise when faced with scammers, when you need to get your money back.

Sometimes it is possible to resolve an issue without a trial if the parties have reached a common agreement, but this happens more often as an exception. Therefore, you need to remain vigilant and check everything carefully. If the case goes to court, it is important to have absolutely all the documents that appeared in the transaction.

Responsibility for non-payment of taxes on the sale of real estate

Failure to submit a declaration from an individual within the established time frame and non-payment of tax are fraught with troubles:

If you indicate zero tax in your declaration, you will be fined 1,000 rubles.
Late payment – a fine from 5% to 30% of the amount.
In case of delay after July 16, penalties will be charged.
A taxpayer who refuses to tax more than 600 million faces criminal liability.

Understanding tax intricacies is not as difficult as it seems at first glance. With a little patience and attention, you can figure out any situation on your own.

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