How to get a tax deduction

To return money from personal income tax paid, you must follow the step-by-step instructions. It will help you get a deduction in the shortest possible time, without suspending the process or rejecting it.

How to receive funds:

• Step 1. We collect and prepare a complete list of documents. This step is important in processing a deduction, because in the absence of any document, the process may be suspended;
• Step 2. Contact the tax office, where you will need to fill out a declaration. Since this document is a large and multi-page form, it is best to fill it out under the supervision of qualified employees. The established form is 3‑NDFL. It is intended for both refunds and tax calculations;
• step 3. Submission of a package of documents for consideration;
• step 4. Within 10 calendar days, the documents will be checked by a commission (not traveling), the essence of which is to check all collected certificates for legal purity. If an error is found in any documents, the commission has the right to suspend the payment process. It is also prohibited to submit documents for a second return. If the documents are falsified, this means a 100% refusal to consider the case;
• step 5. If the documents are accepted, then within a specified period (usually 30 calendar days) funds will be paid to your personal bank account.

Required documents

An important part of processing a return is the preparation of documents, because the decision of the expert commission depends on them. List of certificates that need to be collected:

1. Certificate issued by the employer (2‑NDFL). The main condition is that the applicant is officially employed. If over the past year the applicant has changed several official places of work, then a certificate must be taken from each employer.
2. The declaration mentioned above. This document contains details (bank account numbers, exact addresses and telephone numbers). This is because if the deduction is approved, the inspection sends the amount to the personal account specified in the declaration. In this case, the inspection must first notify the applicant about the result of the assessment by registered letter to the postal address.
3. Contract for the sale and purchase of a cottage or plot.
4. A bank statement confirming that the applicant actually contributed a certain amount to purchase the dacha. You can also provide receipts or receipts.
5. Certificate of state registration of rights, which confirms that the applicant is the legal owner of the dacha.
6. Applicant's passport + TIN.

Note: if the dacha was purchased with a loan, then the applicant is required to include in the general list a mortgage agreement, as well as a bank statement indicating that all monthly payments have been made.

The process of obtaining a deduction from the purchase of a summer house is no different from the standard registration procedure: collecting the same package of documents, contacting the tax office. To summarize, we can say that in this case, the main difficulty in obtaining a deduction is that the land on which the dacha is located must belong to the category of territories intended for the construction of residential facilities. That is, the dacha should not be located on the territory of SNT, but, for example, in an urban village. The owner will receive a refund in any case.

Documents for receiving a deduction

3-NDFL are those treasured declarations for those who draw up documents for a tax deduction when purchasing a plot. This number indicates the papers that need to be filled out. You will also have to prepare:

• a statement containing a request to provide a tax deduction;
• application with transfer;
• all documents with copies confirming that the buyer actually has the right to exercise the right to deduct.

It is allowed to contact the inspectorate, demanding a tax refund, for the last 3 years, but not earlier than the year in which the registration of ownership of the house located on the purchased land was recorded.

Such a benefit can only be one-time and is provided for a single object.

To submit a request for a personal income tax refund, you will need to collect a package of documents:

• A copy of the taxpayer's passport;
• Certificate of income received in form 2-NDFL;
• A document confirming ownership of the building (dacha) and land;
• Contract for the sale and purchase of a summer house and land plot;
• Declaration of income in form 3-NDFL;
• Guardians of minors will be required to present documents confirming this right;
• Bank account details where funds for personal income tax refund will be transferred.

Copy of passport Form 2-NDFL certificate Document confirming ownership of a land plot Purchase and sale agreement for a land plot and a residential building Declaration in form 3-NDFL Bank account details

More details about the required package of documents should be clarified in the department of the Interdistrict Tax Inspectorate.

A common question is whether it is permissible to submit documents to obtain a property deduction without visiting the tax authorities in person{q} This opportunity exists and is provided by the official website of the Federal Tax Service. If the taxpayer is already registered in his Personal Account on this website, then he will be able, without leaving his home computer, to fill out a tax return and attach scanned copies of accompanying documents.

After the taxpayer has provided the Federal Tax Service specialists with all the requested documents, they will check all the data for accuracy within 3 months and make a decision, which will be communicated to the applicant in writing. Often, documents are returned to the taxpayer if inconsistencies are found, for example, in a completed declaration.

If the applicant does not agree with the decision of the Federal Tax Service inspectors and is confident that he is right, he has the opportunity to appeal this decision in accordance with the provisions of the legislation of the Russian Federation.

A person can receive compensation for the costs of purchasing a plot of land with a house through deductions in one of the following ways:

• via INFS by transfer to a bank account;
• through the employer due to exemption from personal income tax.

In the first case, after the year of acquisition of real estate, the buyer submits the following documents to the Federal Tax Service:

• declaration 3-NDFL;
• statement;
• certificate (2-NDFL);
• transaction agreement (certified copy);
• payment documents (copy of payment receipt);
• certificate of registration of property rights.

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Form 2-NDFL specifies the amount of a citizen’s tax deductions for the year. It is this amount that is subject to refund.

If this amount is less than the total amount to be returned, the arrears are transferred to the next year.

In this case, documents can be submitted by a citizen in person, by mail with a list of documents, or electronically to the Federal Tax Service website.

The Federal Tax Service considers the issue (no more than 3 months) and informs the applicant of the results. If a positive decision is made, then within 1 month the funds will be transferred to the account.

In the second case, the right to compensation for costs through tax deductions can be registered immediately after registering the right to transfer ownership of a plot with a house. In this case, the same documents are submitted to the Federal Tax Service as in the first case, with the exception of the tax return and certificate.

The issue of deduction to the Federal Tax Service must be resolved within 1 month. If the decision is positive, a notice of the right to receive a deduction is sent to the employer’s accounting department. After this, the accounting department stops deducting personal income tax from the applicant’s salary.

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What is a tax deduction

Failure by a taxpayer to submit a tax declaration to the tax authority at the place of registration within the deadline established by the legislation on taxes and fees shall entail the collection of a fine in the amount of 5 percent of the amount of tax subject to payment (surcharge) on the basis of this declaration, for each full or partial month from the day established for its performances, but

the specified amount and

How does one receive a tax deduction when purchasing a plot of land{q} If someone wants to become the owner of a new garden plot with a finished house or an empty area, such an acquisition costs a lot. And, of course, I would like to see at least a small investment returned back. It is quite possible to do this; all you need is an application.

A plot of land without structures, which provides for the construction of private housing in the future. Patience is required here: the money will be returned only if the house is built and ownership of it is legally registered. It is impossible to receive a deduction for the purchase of a land plot if the land remains undeveloped.

A plot of land on which a house is already located. When preparing all the necessary documents for the purchase and sale, it is necessary to make a mandatory statement regarding what type of benefit the property is being acquired. Documents are submitted to the tax office.

The territory was purchased with a loan. In this case, there will definitely be an overpayment, but it is often reimbursed separately. The interest deduction is not tied to the amount of the main deduction for land and buildings.

There are important restrictions under such conditions. For example, a tax deduction for the purchase of a plot of land is valid in cases where:

1. The plot is purchased by a Russian citizen who does not travel abroad for 182 days during the current calendar year.
2. The buyer of purchased land has an officially fixed income tax of 13 percent.

Thus, the category of beneficiaries is very limited. Some do not pay the 13 percent tax to the state budget; non-residents do not stay on the territory of the state for the number of days required by law.

But even if the established rules are followed, there are still a number of restrictions for considering a request for how to get back a certain amount spent on a purchase. These include:

• completing a transaction with family members, even if the sellers are close relatives;
• purchase of a land plot with funds allocated by a government agency or provided by an official, and the buyer did not contribute his funds, which is documented;
• there is a house on the site, but there are no rights to it;
• the land acquired by the owner will be used for other purposes other than for the construction of a dwelling.

There will be no additional payments if the purchased plot turns into a garden, vegetable garden, or dacha.

When considering a request for a benefit, such nuances as the types of land deductions will be taken into account. They are divided into:

1. Basic. Land, house and plot are taken into account. The amount will be 2 million rubles, the income tax refund will be 260 thousand rubles.
2. Additional. This is the case if the land is purchased on credit. Then the size will be large - 3 million rubles. An additional bonus to 260 thousand rubles. there will be an amount equal to 13%.

Only those plots of land can receive a benefit for which the documents were issued after 2010, from January 1. Before this date, the law had not yet entered into force and the transactions had not acquired a legal basis.

The employer also has the right to prepare the necessary documents, and then it will be possible not to pay income tax for the entire current year.

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2 We receive a certificate from the accounting department at the place of work about the amounts of accrued and withheld taxes for the corresponding year in form 2-NDFL.

3 We prepare copies of documents confirming the right to housing, namely:

• when constructing or purchasing a residential building - a certificate of state registration of the right to a residential building;
• when purchasing an apartment or room - an agreement on the purchase of an apartment or room, an act on the transfer of the apartment or room (share/shares in it) to the taxpayer, or a certificate of state registration of the right to the apartment or room (share/shares in it);
• when purchasing a land plot for construction or for finished housing (shares/shares in it) - a certificate of state registration of ownership of the land plot or share/shares in it and a certificate of state registration of ownership of a residential building or share/shares in it;
• when repaying interest on targeted loans (credits) - a targeted credit agreement or loan agreement, a mortgage agreement concluded with credit or other organizations, a schedule for repaying the loan (loan) and paying interest for the use of borrowed funds.

Since the issuance of a certificate of state registration of property rights has been discontinued since 2020, instead of it, the taxpayer has the right to submit an extract from the Unified State Register of Rights to Real Estate and Transactions with It (USRP) as a supporting document.

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4 We prepare copies of payment documents:

• confirming the taxpayer's expenses when purchasing property (receipts for receipt orders, bank statements about the transfer of funds from the buyer's account to the seller's account, sales and cash receipts, acts on the purchase of materials from individuals indicating the address and passport details of the seller and other documents) ;
• evidencing the payment of interest under a target credit agreement or loan agreement, mortgage agreement (in the absence or “burnout” of information in cash receipts, such documents can serve as extracts from the taxpayer’s personal accounts, certificates from the organization that issued the loan about the interest paid for using the loan).

5 When purchasing property for common joint ownership, we prepare:

• a copy of the marriage certificate;
• a written statement (agreement) on the agreement of the parties to the transaction on the distribution of the amount of the property tax deduction between the spouses.

6* We provide the tax authority at the place of residence with a completed tax return with copies of documents confirming actual expenses and the right to receive a deduction when purchasing property.

*If the submitted tax return has calculated the amount of tax to be refunded from the budget, together with the tax return it is necessary to submit to the tax authority an application for a refund of personal income tax in connection with the costs of purchasing property.

The amount of income is determined based on the sale price of the property specified in the contract. Moreover, from 01/01/2016, on the basis of the above-mentioned Federal Law, regulations were introduced aimed at preventing the undervaluation of the site in order to reduce the amount of tax.

https://www.youtube.com/watch{q}v=SG5GY2BKKtg

In accordance with these rules, the taxable value of a land plot cannot be lower than the cadastral value multiplied by 0.7. The cadastral value of a land plot can be viewed in its cadastral passport.

So, if the cadastral value of a plot is 6,700,000 rubles, then the minimum amount that will be taxed upon its sale is 4,690,000 rubles (6,700,000 * 0.7). Even if the sale of real estate is carried out at a lower cost, tax must be paid on income equal to 4,690,000 rubles.

The personal income tax rate is directly dependent on whether the seller is recognized as a resident of the Russian Federation. Staying on the territory of the Russian Federation for more than 183 calendar days a year allows a person to be considered a resident. The remaining persons are non-residents.

It is important to note that obtaining non-resident status does not depend only on his actual stay within the territory of the Russian Federation. Each issue is resolved individually, including taking into account the presence of permanent residence in the country.

For residents of the Russian Federation, the tax rate is set at 13%. For non-residents it increases to 30%.

Thus, if a plot of land is sold for 7,420,000 rubles, then the amount of personal income tax will be equal to 964,000 rubles. for residents (7,420,000 * 0.13) and 2,260,000 rubles. for non-residents (7,420,000 * 0.3).

In this regard, nothing has changed in 2020.

It is important to note that if the land plot is in shared ownership, then when it is sold under one contract, the property deduction can be applied only once.

If the owners sell their shares separately, then each of them has the right to apply a deduction.

By April 30 of the year following the year of sale of the land plot, the owner must submit a declaration to the tax authorities. Moreover, the payer will have to calculate the personal income tax independently.

The tax obligation must be fulfilled before July 15. Otherwise, sanctions in the form of a fine will be applied to the defaulter - 20% of the amount of income for each day of delay. The penalty for failure to submit a declaration is provided in the amount of 5%, but not less than 1000 rubles for each day of delay.

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