When can you apply for a tax deduction when purchasing an apartment with a mortgage?

The state provides a tax benefit that provides for a property deduction for the purchase of real estate. The tax deduction allows you to return part of the money (13% of the transaction amount) spent on the purchase of housing. Property deduction refers to the amount that a citizen has the right to return after purchasing a property. The maximum deduction amount is 13% of the purchase price, not exceeding 260 thousand rubles. A person has the right to take advantage of this deduction only once in his life.

Who can return the tax deduction for the purchase of an apartment?

After acquiring real estate, an officially employed individual who receives a certain salary, from which income tax is withheld in favor of the state, has the right to apply for a property deduction. This right can only be exercised by citizens of the Russian Federation who are permanently registered and residing in the country. A foreigner who buys a plot of land, a house or an apartment in Russia will not be given a tax deduction. A citizen from whose earnings income tax is not withheld will not be able to apply for a property deduction. If an elderly person has a pension amount that is less than the established minimum subsistence level, then he will be denied a refund.

Grounds for receiving a tax deduction:

— periodic deduction by an individual of fixed amounts to the state budget (Article 220 of the Tax Code of the Russian Federation),

— acquisition of ownership rights to any residential property.

Tax refunds are made only from those amounts that were contributed by the payer to the state budget over the past three years.

Maximum tax deduction amount

What amount of property deduction can you expect when purchasing residential real estate? To calculate, you need to multiply 13 percent by 2 million rubles. Thus, the maximum amount is 260 thousand rubles.

Expenses for the purchase or construction of housing

All expenses must be supported by invoices, receipts and receipts. They must indicate the payer and what the funds were paid for.

If the documents for the property indicate that it was purchased with only rough finishing, then all expenses for the final finishing of the apartment or house are added to the final amount of the deduction. Thus, it is necessary to document the costs of purchasing building finishing materials.

Purchasing unfinished housing

If an unfinished house was purchased or the housing was built from scratch, then all expenses for:

Work.
Construction Materials.
Summing up all communications.
Services.

Mortgage

If a residential property was purchased with a mortgage loan, then when calculating the amount of the tax deduction, all costs of repaying the interest specified in the agreement with the banking organization that issued the loan must be taken into account.

When to file a tax deduction for the purchase of an apartment

A person can use the right to receive a deduction at any time, starting from the next year after purchasing real estate. The Tax Code of the Russian Federation does not establish a statute of limitations. The property deduction is provided after the end of the tax period in which the real estate transaction was completed. For example, if housing was purchased in 2020, then you can submit documents for the deduction no earlier than 2020. However, the new owner may not wait until the end of the tax period. To receive a property deduction for purchased real estate, he should contact his employer immediately after completing the transaction. The owner should write an application to the tax office at the place of registration, requesting notification of the existing right to a property deduction. The application is written in any form. Attached to it is a certificate of registration of ownership of the property and a purchase and sale agreement with the specified transaction amount. The owner must give the notice received a month later to the employer. This paper will be the basis for canceling the withholding of personal income tax. If an employee has several employers, he has the right to receive a tax deduction in the year of purchase of housing from any of them. The return of withheld personal income tax from others occurs in the general manner during the following tax periods (clause 8 of Article 220 of the Tax Code of the Russian Federation). If it is not possible to receive a full refund in the year of purchase of the property, then next year the deduction is made in the general manner by submitting a new tax return to the tax office.

The validity period of the tax deduction when purchasing an apartment is not limited by law.

Lists of documents for obtaining tax deductions

8. Payment documents confirming the fact of payment of funds by the taxpayer from personal income (executed in the prescribed manner, for example, the seller’s receipt indicates passport and address information, from whom, for what, under what agreement, what amount was received) (original, copy ).

14. If an apartment is purchased in common shared ownership and the ownership share is not specified in the ownership documents, then the co-owners of the property must determine among themselves the share for using the property tax deduction and attach to the declaration an application for the distribution of ownership shares between the co-owners or the refusal of one of them to the benefit of another.

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How to apply for a tax deduction when buying an apartment

To receive a tax deduction, you must fill out a declaration form 3-NDFL with a package of necessary papers and submit it to the tax office at the place of registration. Tax officials will check all documents and transfer the due amount to the specified bank account. To apply for a property deduction after purchasing an apartment, you must provide the following documents:

Declaration and statement	Certificate in form 2-NDFL from place of work	Copies of documents for housing
Tax return in form 3-NDFL and application for a refund (which must indicate the bank details of the account to which the tax office will transfer the money)	Certificate 2-NDFL is issued at work. It reflects information about the employee, data on income and withheld tax for the calendar year.	Purchase and sale agreement, certificate of registration of title or deed of prima transfer, documents confirming payment (receipt, receipt, payment order, etc.), when using a mortgage: loan agreement; a certificate of interest withheld by the bank during the year; payment documents

The verification of the submitted papers lasts up to three months at the tax office. After the end of this period, a notification of refusal or provision of a property deduction will be sent to the specified registration address. If the decision is positive, the funds will be transferred within two weeks. The entire process will take from one to three months.

Documents you always need

A separate list of documents for property deduction are documents confirming expenses incurred by the taxpayer. Namely (for each situation the corresponding doc):

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;
other documents.

Also see “The Federal Tax Service explained when it is more convenient to receive a personal income tax deduction not in its entirety, but in parts.”

What amount is returned and for how long?

The maximum refundable amount cannot exceed the income tax paid for the year. This amount is 13% of the annual salary, according to the certificate in form 2-NDFL. The remaining amount is carried over to the next year. This will continue until the entire due deduction is returned. As a rule, the property deduction will be provided in full within several years. The maximum amount of real estate that is not subject to income tax has been established - 2 million rubles. If the purchased apartment is more expensive, then the refund will be calculated as for housing purchased for 2 million rubles. Thus, the largest return will be 260 thousand rubles (13% of 2 million rubles). If housing was purchased with a mortgage, then in addition to this amount, the taxpayer has the right to return 13% of all interest paid for using the loan. There is no maximum amount set for them. For what period of time can I receive a deduction? Funds are returned for the last 3 years. For each year, you must submit a new declaration with a complete package of documents. Refunds for the current year can only be made in the next year. Each declaration must contain information about the balance from the previous document.

The amount of tax deduction cannot exceed 260 thousand rubles.

Limitation periods

If you decide to receive a personal income tax refund through an inspection, then prepare and submit to the Federal Tax Service a 3-personal income tax declaration and documents confirming your right to receive benefits, in person, by mail or on the website of the Federal Tax Service of the Russian Federation, if you are registered there. Filling out the declaration on the website is more convenient and easier than manually.

There is no specific date for filing a tax deduction return for personal income tax refund. The current deadline - until April 30 of the year following the reporting year - is provided for declaring income received and calculating tax payable to the budget. That is, if you want to submit a declaration to the Federal Tax Service only to receive a refund (and you have paid all the required tax), this can be done at any time after the end of the calendar year, but no later than three reporting periods (reporting period = from January to December), that is, the statute of limitations for tax deductions is three years.

For example, the right to deduction arose in 2020. Submitting a declaration is allowed on any day starting from 01/01/2020, but no later than 12/31/2022.

IMPORTANT ! Property deductions have no statute of limitations. That is, you can get a tax refund when buying an apartment in five, ten, or 15 years. At the moment when it is more beneficial for the taxpayer.

But you cannot request a tax refund for the years preceding the year in which you were entitled to the benefit.
The exception is pensioners. When purchasing a home, retired citizens have the right to demand from the Federal Tax Service a refund of personal income tax for the three years preceding the year in which the property was purchased. comments powered by HyperComments

New law on tax refunds on apartment purchases in 2020

There were no innovations in 2020. But they happened several years earlier. Thus, since 2020, Federal Law No. 212 has become effective, the text of which affected the provisions of Art. 220 Tax Code of the Russian Federation. Due to these circumstances, the maximum deduction amount became equal to 260,000 rubles. Regardless of the date on which the property was purchased, compensation is calculated for 3 years.

Ivanov’s official salary is 54,000 rubles. For the last year, the amount of deductions is 84,240 rubles.
A citizen purchased an apartment, the cost of which was 1.6 million rubles.
Total amount of deduction: 1,600,000 * 13% = 208,000 rubles.
Receiving 84,240 rubles, Ivanov will receive his money back in 2.4 years.

For what period can tax be refunded?

Based on Article 220 of the Tax Code of the Russian Federation, the period for which it is possible to receive a refund of income tax paid is three years from the date of deduction application. That is, when filing a declaration in 2020, you should expect compensation for 2016-2018. It is not possible to return funds withheld for the previous period of time.

Attention! In addition, it is not possible to obtain compensation for the period that precedes the emergence of the right to compensation. When concluding a contract for the construction of a house or apartment, you can apply for a refund only when the year ends in which the transfer and acceptance certificate of the property was received.

The exception is the transfer of payments by pensioners. They are entitled to receive a percentage of the withheld salary for four years. In addition, during the transfer, several scenarios are possible:

Buying after retirement. A declaration for property deduction must be submitted at the end of the calendar year in which the property was acquired. In addition to the payment for this year, the pensioner can carry forward the balance to three years that preceded the conclusion of the contract. An important nuance: if retirement took place more than four years ago, you will not be able to receive compensation, since there was no taxable income at that time.
Buying a home before retirement. An application for a balance transfer to receive payments for the last four years can be submitted without waiting until the end of the tax period.
Purchasing an apartment in the year of retirement. Documents must be submitted at the end of the year in which the person purchased the property. Compensation will be available for the last four years.

Property tax deduction increased from January 1

In Belarus, the size of the property tax deduction has been increased. From January 1, 2020, instead of 10%, it will be 20% of taxable income. It is used for expenses to purchase real estate. Expenses must be actually incurred and documented. The changes are spelled out in the new edition of the Tax Code, which has been in force since the new year.

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If in the current tax period an individual was not provided with a property tax deduction or was not provided in full, then the unused amount is carried over to subsequent periods. Until it is completely used.

Income tax benefits

If the citizen alienating the property acquired this property free of charge or with partial payment, then the expenses for the acquisition of property also include the amounts on which income tax was calculated and paid upon the acquisition of such property, and in relation to real estate and vehicles, such expenses Also included are amounts that are not subject to taxation and (or) not recognized as objects of taxation in accordance with the legislation in force at the time of acquisition of this property. [∗] subclause 1.2 of Article 211 of the Tax Code of the Republic of Belarus

The tax deduction is provided to citizens and members of their family who are (who were at the time of concluding a credit agreement or loan agreement) registered as needing improved housing conditions. In this case, family members of a citizen include a spouse, their children and other citizens recognized as family members in court in the amount of their expenses for: [∗] subclause 1.1 of Article 211 of the Tax Code of the Republic of Belarus

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