Refund of tax deduction when buying an apartment

In practice, not all individuals can implement it due to the admission of errors that contradict the current legislation. To avoid unpleasant consequences, we recommend that you read this article, which will tell you about who, how and when can reduce the size of their tax base in the event of real estate acquisition.

The essence of the deduction, which is accrued to individuals who have invested material resources in the purchase of an apartment, is the same as for other tax credits. The buyer of real estate has the right to partially return to himself the funds spent on the purchase of housing. The transfer of this compensation comes from the state budget, namely from the money that was previously paid for income tax by the same individual.

It should be noted that the tax credit for the purchase of an apartment belongs to the category. In order to familiarize yourself with information regarding the reimbursement of personal income tax for real estate, read.

Who is entitled to such tax compensation?

When buying an apartment, it is not possible to realize it in all situations. A number of circumstances affect whether this discount will be accrued to the buyer of the property. First of all, these are the nuances associated with the owner himself, as well as factors directly related to the purchase and sale transaction. These are the following requirements:

1. You have to pay taxes. Those individuals who evade paying income tax to the state treasury, and also hide some part of their income and do not pay personal income tax from it, cannot take advantage of receiving compensation for the purchase of real estate.
2. You must have employment. Some home buyers do not work officially, and demand reimbursement of funds for their property acquisition. Since they did not pay tax contributions, there is nowhere to compensate them for their money.
3. You must apply for a deduction for the first time. The property tax credit has one special feature that distinguishes it from other types of deductions. This is a one-time charge. That is, in his entire life, regardless of how many properties a taxpayer has acquired, he can only compensate income tax for one of them. Thus, if the owner of the home has previously drawn up a deduction for the property, then it makes no sense to do it again.

Return procedure

Most types of tax credits have their statute of limitations. However, no time periods apply to property deductions. That is, its owner can almost at any time. In this regard, we recommend that you do not rush to apply for the calculation of this compensation to the tax service and be sure to wait until absolutely all papers for housing are ready, including the certificate of ownership.

For example, if an individual made the purchase of an apartment in 2010, and applied for the tax discount only in 2017, then personal income tax will still be returned to him, but only the one that was paid in 2014, 2015, 2016. There is one rule, the meaning of which is that for a year you can receive compensation no more than the amount given to personal income tax for the same period. Thus, if the total amount of the property deduction is much more than the tax paid over the past three years, then the taxpayer will not receive part of the funds, since he does not have the right to do so.

Attention! Russian legislation provides for such an option as registration of housing for a minor individual. In order to reduce the size of the tax base in this case, in addition to the basic documents, a passport of one of the parents is required, in whose name the property monetary compensation will be transferred.

Required Documentation

The procedure on how to return the tax deduction for the purchase of an apartment consists of several stages, the main of which is the preparation of the necessary documents. The list of these papers is not the same in all cases, because one apartment can be bought on credit, while the other cannot, the title of property is registered for one house under the so-called sale and purchase agreement, and for another under the act of acceptance and transfer etc.

However, there is a certain basic list of securities, without which no property deduction will be accrued, regardless of the conditions under which the housing was purchased. This list of documentation includes the following types of securities:

• Identity document. For most taxpayers, a passport acts as such a document, but other options are also possible. Several certified copies of the first and second pages of the passport, as well as a sheet containing data on the address at which the applicant for the deduction is registered, must be sent to the tax authority.
• Completed 3-NDFL declaration form. You will also need to work on the design of a document such as a tax return. The buyer of real estate needs to enter information in the first few pages of the 3-NDFL form (first, section 1, section 2, sheet A), as well as in a special sheet dedicated to the reimbursement of personal income tax for real estate - D1.
• Statement and income statement. In addition, a statement is written, which includes a request for the return of income tax. Another mandatory document confirming the financial situation of an individual, as well as containing specific information about his income, is a certificate in the form of 2-NDFL.
• Various kinds of payments. Any document confirming the actual execution of the payment, which consists in the transfer of money by the buyer to the former owner, is also required to receive a deduction. For example, it can be a copy or original of a payment order.

In addition to the above documents, one cannot do without a certificate of obtaining ownership of the apartment by the taxpayer, an analogue of which is an extract from the unified state register of real estate, as well as a purchase and sale agreement (or an agreement for equity participation or an act of acceptance and transfer).

What amount is returned by the tax

If the taxpayer bought the property for a price that is less than two million rubles, then exactly thirteen percent of the amount spent will be transferred back to him. For example, if a one-room apartment in the city of Orel cost 1,750,000 rubles, then the tax service will compensate the owner of the property for an amount equal to 227,500 rubles. But not all of it will be transferred to the bank card, but exactly as much as the recipient of the deduction paid for the personal income tax in a year. The balance will be carried over and paid over the next years.

If more than 2,000,000 rubles were paid for the purchase of housing, the amount of compensation will be 260,000 rubles. This is due to the fact that the tax refund for an apartment is subject to a certain maximum limit on the price of a property, which is equal to two million rubles.

Regarding how to get a tax deduction for an apartment purchased on credit, first of all, you need to get a discount for expenses that went to the property itself, and then apply for compensation for the payment of interest.