How to obtain property tax deduction?

That is associated with the words “sale”? More often than not so many happy housewarming, how much money, spendings, expenses. “ToKnow365.top” tell me how it is possible to reduce them by returning part of the money, getting the property tax deduction.



It is possible in two situations: when selling a property and buying it. Consider both alternately.

The right to a deduction when selling a property

Under existing tax law, every person who sold the apartment, garage, land, other property, or a share in them, must apply before 30 April of the following after the transaction year of the tax return and pay entitlement in the budget.

Of course, fully to transfer to the Federal Treasury the amount of tax no one wants — no one who earns on transactions with the fashionable townhouses or pensioner forced to sell an old cottage in a good location. And now there is a legitimate opportunity to reduce the compulsory payment of personal income tax, to deduct the tax when you sell the property.

For example, the same pensioner that owns a house and land since the days of the Soviet Union, will be fully exempt from personal income tax and from filing the Declaration. Because the income from the sale of property, which the owner owned 3 years and more not subject to taxation.

The man made a deal with the newly acquired property, has the right to reduce the tax in two ways:

  • reducing the resulting transaction income of 1 000 000 rubles
  • decrease of income from sales in the amount of money spent with the purchase of this property.
  • The use of either option depends on the specific situation, but rather, amounts.

    For example, you bought in 2013, the apartment for 7 million. And in 2014 sold its 9 million RUB If you use a property deduction according to the tax in the amount of RUB 1 million, the amount payable will be 1 040 000.((9 000 000 — 1 000 000)*13%) And if you reduce the income received on previously incurred expenses to pay to the budget will need 260 thousand.((9 000 000 — 7 000 000)*13%).

    If it so happened that during one calendar year you sold some real estate, a deduction of RUB 1 million is used not for each of them, and the total.

    There are restrictions when selling shared ownership. If the apartment is owned by several persons sold on a single contract, then a million shares in all, usually in proportion to the shares in the property. But when they each sign a contract for his share, and reduce the tax allowed by law max has the right too every.

    For registration of a tax deduction when you sell the property you must:

  • to fill in the Declaration form 3-NDFL,
  • make copies of documents of sale,
  • prepare copies of receipts, Bank statements, payment orders, and other papers certifying the acquisition costs of property sold (you can skip this step if you decided to use a deduction in the amount of 1 million rubles.)
  • to send to the tax office the completed Declaration with the attached copies of the documents, and if you take it personally, it is better to have the originals.
  • Property tax deduction for the purchase of real estate

    This type of reduction of obligatory payments possible for two reasons:

  • purchase or construction of any type of housing and land for housing construction,
  • the payment of interest on the mortgage.
  • Upon the occurrence of any of these events you can reduce the amount of all earned or received during the year by 13% of the property value or the size of interest paid.

    According to the first embodiment, the maximum amount of the deduction is 2 million. And the second can reduce a tax base of 3 million rubles., this limit applies if the loan were received after January 1, 2014.

    If the income that you receive, do not allow to fully use the tax deduction on the purchase of property within one year, the balance can be transferred to subsequent periods until, until the amount is fully exhausted.

    Sympaty.net recalls that there are some limitations:

    • make to the reduction of revenue available and what is spent on the decoration of the apartment or the completion of the house, but only if the contract of purchase and sale specified that construction was completed or the property is for sale without finishing;
    • cannot take deduction if the housing was manufactured by means of the parent capital, money of the employer or at the expense of the budget;
    • with the purchase of property from related parties tax deduction is not available (to such persons according to the tax code include spouses, parents, children, brothers and sisters, the employee and the employer).

    Since 2014 when buying a house or apartment in common ownership each of the new owners may reduce their income to a maximum amount. Previously it was necessary to divide among themselves in proportion to the shares.

    Also applies to innovation and the right to use the deduction until the complete exhaustion of its limit.

    This means that buying an apartment for 1.5 million in March 2014 and another one for 1 million rubles in November 2014, the deduction you can declare on both, but only in the amount of 2 million.

    The amount of the property tax deduction cannot exceed the income tax calculated over the same period. That is, if you earned 1 million rubles, personal income tax, withheld and listed in the budget by the employer will amount to 130 thousand rubles, Respectively, to reduce the tax on this amount. And the remaining 130 thousand to move to the next year.

    For registration you need the following:

    • to fill in the Declaration form 3-NDFL,
    • to accounting or other financial service responsible for the payment of salaries, the certificate 2-pit,
    • to make copies of documents confirming the acquisition of property, the purchase of which relies on a tax deduction:
      — the contract on acquisition of the apartment and the act of transfer or the registration certificate of ownership,
      — certificate of registration of the rights to a house when buying a home,
      — certificate of registration of the rights to the land when purchased for residential use,
      — mortgage agreement, the agreement of the target loan when making a deduction on paid interest on it;
    • prepare copies of all paperwork confirming the cost of the purchase payment or the payment of interest (receipt, certificates of purchase of materials at physical persons, the statements of personal accounts, Bank statements and certificates, commodity and cashier’s checks);
    • to file a tax Declaration with all required copies to the tax office.

    If the residential property is acquired by the spouses and is made in the overall joint property, then in addition to receive a property deduction according to tax need a copy of the marriage certificate and a written agreement on the distribution of the size of the deduction between husband and wife.

    There is a possibility that your wages are not kept pit until the exhaustion of the full amount of the statutory deduction.

    For this purpose prepared in the above paragraphs, the documents are submitted to tax office together with the application to receive notice of the right to deduction. Within 30 days the IRS verifies your right to receive a tax deduction in connection with the acquisition of property and prepares this notice. Then to take it away from inspectors and submit to the accounting Department to get a deduction at the place of work.

    We tried to tell them how to exercise their right to a property deduction under the tax to incomes of physical persons for the sale and purchase of real estate. This instruction is General and can be applied to almost any occasions.

    I hope that it will be useful to you.

    More information about possible tax deductions you can find in another article on the website “ToKnow365.top“.


    Author – Hope Budnikova, site ToKnow365.top

    How to obtain property tax deduction?





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