Tax deduction when purchasing an apartment by an individual entrepreneur

Partial exemption of citizens from personal income tax is an effective instrument of state support. The right to suspend contributions to the budget appears in different cases. One of them is the acquisition of residential real estate. Professional lawyers were looking into whether an individual entrepreneur could receive such a tax deduction. Experts noted the peculiarities of personal income tax return when purchasing an apartment by OSNO payers, “special regime holders” and self-employed citizens.

general characteristics

Tax deductions under Article 220 of the Tax Code of the Russian Federation are provided only to individuals whose income is taxed at a rate of 13%. Registration as an individual entrepreneur does not prevent the implementation of the right. If a businessman pays income tax, he can file a 3-NDFL declaration and insist on recalculating liabilities.

The easiest way to get a property deduction for entrepreneurs is through the general system. The law recognizes businessmen as personal income tax payers. They are required to submit an annual declaration indicating their actual income. Advance payments are collected regularly, and therefore impressive amounts can be claimed for refund. To use the right of OSNO payers, it is enough to indicate the relevant data in the declaration.

It is more difficult to return money to “special regime officers”. They can claim a deduction only if they have third-party income, taxed at a rate of 13%. If there is no income outside of the business, it is worth transferring the right to compensation to a spouse or other adult co-owner. This is allowed when registering real estate as joint or shared ownership.

Are there any legal workarounds for individual entrepreneurs?

To obtain the right to receive a property deduction, an entrepreneur can use one of the following options :

1. Switch in advance to another tax regime , which involves paying personal income tax, and submit a corresponding notification to the Federal Tax Service before the end of the year. After all, usually the decision to purchase real estate is not made spontaneously and the entrepreneur has time to “prepare the ground” for receiving a property deduction.
2. Reorganize your business from an individual entrepreneur to an LLC format . Then the former entrepreneur will be registered in the company as a director. He can be the sole founder and the only employee in the LLC. But in the eyes of the state, he will act as an ordinary employee who receives taxable income.
3. His wife can apply for a deduction for an entrepreneur if she is officially employed and has income in the form of a salary. The apartment must be registered as common joint/shared ownership. Since 2014, the right to deduction is no longer distributed in accordance with the shares owned by the spouses. Now each of them can return the amount within 2 million rubles. (or 260 thousand rubles). Read about property deductions when purchasing an apartment in shared ownership or under shared ownership here.

Grounds for granting a property deduction

Paragraph 1 of Article 220 of the Tax Code of the Russian Federation covers transactions for the sale and purchase of property. The norm applies to operations with all residential buildings. Agreements the subject of which is land are subject to property deduction only for a specific purpose. The plots must be allocated for the construction of houses or be located under such buildings.

Not only buyers, but also sellers have the right to receive preferences. Among the grounds for property deduction are the sale of land, capital structures, expensive movable things, as well as the seizure of objects for state and municipal needs.

Features of the deduction are that income is exempt from personal income tax. No refunds will be made in these cases. The sale of real estate up to 2 million, plots of land and movable property - 250 thousand rubles is not taxed. The provisions of Article 220 of the Tax Code of the Russian Federation do not apply to transactions with securities. Regardless of the amount received, transactions for the sale of real estate owned for 5 years or more are not subject to taxation. Remuneration from the sale of other property is exempt from tax for a period of ownership of 3 years.

The general concepts and conditions of application of the norm apply to all bases. To receive a property deduction or return overpaid personal income tax, you will need to submit a special declaration. The right will have to be documented. You are allowed to use the mechanism once in a lifetime.

Features of obtaining a deduction when purchasing a home by an entrepreneur

According to the law of the Russian Federation, tax exemption for the purchase of apartments and houses applies only to personal income tax payers. The dual status of individual entrepreneurs does not allow us to draw a clear boundary and develop a unified algorithm.

General taxation system

As an individual entrepreneur on OSNO, it is enough to submit an annual declaration to the territorial inspection and attach documents regarding the transaction. The deduction covers income from both commercial and other economic activities. It will not be possible to immediately reduce contributions to the budget due to advance payments. At the end of the year you will have to make a refund.

Example. An entrepreneur in general mode bought an apartment worth 4,600,000 rubles. The total revenue from the business in the year the transaction was concluded was 7,500,000 with costs of 5,800,000.

Let's calculate the taxable base. Business income: 7,500,000–5,800,000 = 1,700,000.

Costs of purchasing an apartment will be exempt from personal income tax up to 2 million rubles. The deduction will fully cover the tax base:

2 000 000–1 700 000 = 300 000.

The entrepreneur uses the balance of 300 thousand next year when calculating obligations to the budget.

Special regimes and self-employment

The capabilities of this category of payers are limited. Individual entrepreneurs using the simplified tax system, UTII, unified agricultural tax or patent are not payers of personal income tax. They do not fall under Article 220. Filing a declaration is allowed only when income appears that is taxed according to the rules of Chapter 23 of the Tax Code of the Russian Federation. Thus, merchants who combine business and work under an employment contract have the right to insist on a tax refund.

Example. The entrepreneur provides services for UTII and at the same time works in a local animal clinic. Business revenue for 12 months amounted to 670 thousand rubles. In addition, for the year, the veterinary institution paid the specialist a salary of 420 thousand rubles. Personal income tax was withheld from the amount at a rate of 13% - 54,600 rubles. In December, a businessman bought a house for 1,800,000.

A property deduction will be provided for only 420 thousand. Since the house was purchased at the end of the year, the excessively collected tax in the amount of 54,600 rubles will be returned to the veterinarian’s account. Revenue from business on UTII will not be taken into account.

The balance of 1,380,000 will be allowed to be used in the next reporting period as part of labor relations. The entrepreneur may receive notice of the right to deduction. In this case, the employer will not withhold personal income tax from wages.

If a “special regime” person does not have income subject to personal income tax at a rate of 13%, he cannot claim a property deduction. The Russian Ministry of Finance, in letters No. 03-04-05/32776 and No. 03-04-05/60785, allowed tax refunds through a spouse. The condition will be that the property be registered as joint ownership. If the rights to the object are registered in shares, you will have to confirm the reality of the costs of each owner.

The uncertainty of the legal status of self-employed citizens significantly complicates the application of the rules. Formally, they are recognized as personal income tax payers. However, until the end of 2022, tax holidays apply to such persons. In fact, nothing is transferred to the budget, and therefore a return is impossible. Self-employed citizens can use the right to deduction according to the same scheme as “special regime employees”. They have no alternatives.

Important! If cases of illegal registration of property deductions are identified, the regulatory authority will recover unjust enrichment through the court. Explanations are presented in the letter of the Federal Tax Service of Russia No. SA-4-7/ [email protected]

How to receive a refund to the spouse of an individual entrepreneur through the employer?

Step 1. Receive notification from the Federal Tax Service

The individual entrepreneur's spouse acquires the right to a tax deduction before the end of the tax period . To do this, she needs to receive a notification from the Tax Inspectorate in the prescribed form.

The inspection will need title and payment documents for the apartment, as well as an application for a certificate . The application indicates the full name and details of the employer-tax agent through whom the deduction will be issued.

It is worth noting that the spouse does not lose the right to a tax refund even if all payment documents are issued to the entrepreneur. The spouse simply needs to additionally submit an application for the distribution of expenses for the purchase of real estate.

Step 2. Submitting a notification to the accounting department

Together with the notification received from the Federal Tax Service, as well as documents for the apartment, the spouse applies to the accounting department at the place of work. Here she writes a statement asking for a property deduction.

Application for a deduction through an employer: form, sample.

Step 3. Exercising the right to deduction

Starting next month, the spouse will begin to receive a larger salary without personal income tax deduction from the salary . If the spouse fails to realize the right to deduction in full this year (up to 260 thousand rubles), she can transfer the balance to subsequent periods.

Also, the spouse of an entrepreneur can apply for a lump sum payment at the end of the year by submitting a declaration in form 3-NDFL to the Federal Tax Service (similar to the algorithm provided for individual entrepreneurs).

The right to receive a property deduction arises for businessmen who simultaneously have income taxed at a personal income tax rate of 13%. This can be not only salary, but income from rental property or its sale. It can also be issued by an entrepreneur working for OSNO.

Not only individual entrepreneurs, but also other categories of citizens have the right to receive a tax deduction when purchasing an apartment. On our website you can find out whether a pensioner can receive it and how to do it and what the nuances are for older people, as well as about the features of registration for the unemployed, for a child, or when buying a home from a relative.

An alternative to filing a personal income tax refund for an individual entrepreneur may be to receive a deduction through your spouse.

When you can't get a tax refund

Article 220 of the Tax Code of the Russian Federation describes in what cases the territorial inspection is supposed to reject an application. Taxes paid to the budget cannot be returned if:

• residential premises or land were purchased from close relatives;
• the purchase was made using maternity capital or other subsidies;
• the transaction was financed by a third party other than the spouse.

The Russian Ministry of Finance explains the purchase of real estate from relatives No. 03-04-05/85621. The Agency recognizes the parties to such agreements as interdependent persons.

You cannot receive the same property deduction several times. You are allowed to use the preference once, but in full. If the declarant has received an exemption for an amount less than the approved limit, the balance can be declared again.

Example. An entrepreneur bought a house on OSNO for 1,800,000 rubles. He has the right to insist on a tax refund from the budget:

1,800,000×13% = 234,000 rubles.

Since the costs of the transaction did not exceed 2 million, the merchant will subsequently be able to once again refer to Article 220 of the Tax Code of the Russian Federation. In this case, the limit will only be:

2,000,000–1,800,000 = 200,000 rubles.

Important! The rule on transferring unused property deductions does not apply to expenses on targeted loans. The mechanism can be implemented only under one agreement. The borrower will not be able to re-claim the right, even if the balance “burns out.”

If an entrepreneur purchased an apartment with his own money

By virtue of sub. 1 clause 3 art. 220 of the Tax Code of the Russian Federation, the amount of the refund has a maximum limitation: you can claim a tax deduction in the amount of no more than 13% of the amount of 2 million rubles. Thus, the maximum amount that can be received in the form of tax compensation for the purchase of an apartment is 260 thousand rubles. Of course, housing may cost more, especially if it is located in a large city, but you will not be able to get more than 260 thousand rubles.

Example #1:

Ermakov I.I. conducts business activities and works in a simplified manner. In addition, he officially works at an IT agency as a senior programmer. Ermakov I.I. receives an official salary, from which he pays taxes. Using personal funds, he purchased an apartment in a new building worth 2.4 million rubles and decided to apply for a tax deduction. Since the cost of the acquired property exceeds 2 million rubles, Ermakov I.I. has the right to deduct only part of its expenses from the purchase of an apartment (namely, only 2 million rubles out of 2.4 million rubles). Thus, he can count on a return of 260 thousand rubles.

Example #2:

Kuteynikov V.M. is an entrepreneur and works under the general regime, paying 13% of his income to the state budget. He bought an apartment worth 1.3 million rubles. Since the cost of the purchased housing is less than the maximum possible deduction, Kuteynikov V.M. has the right to deduct the entire amount and receive (1,300,000 * 13%) 169 thousand rubles out of a possible 260 thousand rubles.

The full amount of the tax deduction may not be refunded at one time. Only the amount on which tax was paid for the previous year is subject to refund. For example, if the amount of personal income tax paid over the past year was 50 thousand rubles, then you will only be able to receive these 50 thousand rubles. In this case, you will have to apply for a tax deduction annually and receive the amount paid as personal income tax once a year until the tax deduction is received in full.

Changes in legislation on tax deductions: important points

In 2022, no significant amendments were made to the regulations. The adjustments concerned the taxation of transactions with assets legalized under the capital amnesty. The innovations were of a clarifying nature.

Major changes in legislation occurred about 4 years ago. In 2014, parliamentarians separated the deduction for repayment of targeted loans into a separate category. It can be used separately. Thus, individuals have the opportunity to use two methods of tax refund. They can be applied to different objects and contracts. The norm applies to objects that came into possession after 01/01/2014.

A positive change was the exclusion from Article 220 of the Tax Code of the Russian Federation of references to the distribution of deductions among co-owners. Now the limit is calculated per person. Each of the owners has the right to make a claim for the return of personal income tax within the limits of the approved standard and the actual costs incurred.

What documents does an entrepreneur need?

Tax refunds when purchasing an apartment for individual entrepreneurs are made on the basis of the 3-NDFL declaration. Mention of the statement was excluded from Article 220 of the Tax Code of the Russian Federation. However, OSNO payers will not be able to do without it. The regulatory authority often offers to offset the overpayment against future personal income tax advances.

The set of applications will depend on the specifics of the transaction. The list includes:

• purchase agreements, shared construction agreements, other title documents;
• acceptance certificates;
• receipts for funds deposited;
• receipts for receipt of remuneration under the agreement;
• bank calculations of loan interest;
• loan agreements;
• bank account details for transferring money from the budget;
• certificate 2-NDFL, if the entrepreneur additionally works under an employment contract;
• birth certificates of minor children in whose name the property was purchased, etc.

Experts can clearly answer what documents will be required after analyzing the transaction. The declarant’s task is to confirm the fact of purchasing the premises with personal funds and justify the declared amount of costs.

How can an individual entrepreneur receive benefits through the Federal Tax Service?

Let’s say an entrepreneur works for OSNO and can apply to the inspectorate to receive a property preference on his own. What steps does he need to take?

Step 1. Preparing documents

Part of the cost of purchasing real estate is refunded upon presentation of supporting documentation to the regulatory authority. This is an agreement for participation in shared construction/transfer deed or another document on the transfer of an apartment from the developer.

You will also need payment documents confirming the amount of expenses for the purchase of housing.

Step 2. Submitting a declaration in form 3-NDFL

submit a 3-NDFL declaration to the Federal Tax Service at the place of residence within the established time frame (no later than April 30) .

Tax return in form 3-NDFL: form, example of filling.

An individual entrepreneur can exercise the right to a tax deduction when purchasing an apartment on OSNO for the year in which he receives the transfer deed.

For example , an individual entrepreneur entered into an agreement with a developer in 2015 and began making payments. In 2016, construction was completed and the entrepreneur received a transfer deed. He can apply for the deduction only in 2022.

A separate declaration for processing a tax refund is not filled out - all calculations are given in a single document.

All income of the individual entrepreneur for the current year and deductions are listed here : professional (for expenses associated with running a business in the amount of 20% of income or actual expenses that have documentary evidence), property, social.

Let's give an example . The individual entrepreneur earned 10 million rubles in a year, costs for the purchase of materials, rent, etc. amounted to 6 million rubles. In the same year, he bought an apartment for 5 million rubles. and spent 100 thousand rubles on dental services. The personal income tax calculation will look like this: (10 million rubles – 6 million rubles – 2 million rubles (maximum deduction for an apartment) - 100 thousand rubles) * 13% = 247 thousand rubles.

Filing a tax return is the responsibility of any entrepreneur, regardless of his income. Submission of reports is not subject to state duty. But if an individual entrepreneur misses the legal deadline, he faces a fine of 1000 rubles.

Step 3. Submitting an application for a refund of overpaid personal income tax

If during the year an individual entrepreneur has made more advance payments for personal income tax than the calculated annual tax, taking into account the application of a tax deduction, then he has the right to apply for a refund. It is written in free form and must contain details for translation .

But the entrepreneur will be able to take into account the overpayment in the next tax period and pay personal income tax in a smaller amount.

Application for a deduction: form, sample.

Step 4. Desk inspection

After checking the tax return, the individual entrepreneur will receive the overpayment back to the specified account or will be called to the inspectorate to provide the necessary explanations.

Nuances of filling out 3-NDFL when buying an apartment

The correct preparation of the declaration is recognized as a mandatory condition for tax refund. Features of working with form 3-NDFL follow from the content. Each page of the report is dedicated to a specific deduction. In the case of purchasing housing, you need to fill out the title page, sections 1–2, pages A, B and D1.

Detailed instructions are given in order No. ММВ-7-11/ [email protected] On the first sheet of the form, indicate the applicant’s personal data, tax period, adjustment number, and put a personal signature.

Sections 1 and 2 are general in nature. This reflects the total amount of income, the amount of property deduction and tax to be refunded.

Sheet A indicates the source of earnings, subject to personal income tax at a rate of 13%, as well as the total amount of income in favor of the declarant.

Entrepreneurs on OSNO will also need to fill out page B. Here you should reflect income from commercial activities, business maintenance costs and advance payments.

Experts recommend paying the most attention to sheet D1. It is important not to make a mistake with the type of property, to accurately enter the address of the purchased apartment and the amount of costs. The guidelines will be the appendices to the instructions of the Federal Tax Service of the Russian Federation.

Note! Special programs will help you avoid mistakes when drawing up a declaration. A service for automatically generating a 3-NDFL report has been launched on the official website of the Federal Tax Service of Russia. You can use the tool for free.

How to determine overpayment of taxes for individual entrepreneurs

When transferring taxes to the budget, an entrepreneur may make a mistake, as a result of which the individual entrepreneur may overpay taxes.

An entrepreneur can find out the amount of overpaid taxes in one of the following ways:

1. Self-calculation . If the overpayment occurred due to a mechanical error when filling out a payment order, then the individual entrepreneur can determine the amount of the overpayment independently by comparing the amount of actual payment with the amount of tax payable according to the declaration.
2. Reconciliation of mutual settlements with the Federal Tax Service . In cases where the overpayment arose in connection with the recalculation of tax, which affects several tax periods, it is advisable for the entrepreneur to reconcile the calculations with the Federal Tax Service by drawing up the appropriate act.
3. Check on the Federal Tax Service website . Using a special Internet service on the Federal Tax Service website, an entrepreneur can find out the presence and amount of tax overpayment. To do this, an individual entrepreneur must register and log in to the taxpayer’s Personal Account → https://lkfl2.nalog.ru/lkfl/login.

Let us note that in the Personal Account of a taxpayer, an individual entrepreneur can find out not only the amount of overpayment, but also check the presence of debts on taxes and fees, as well as obtain up-to-date information about property that is subject to taxation.

Tax refund deadlines

You should expect funds to be credited to your current account no earlier than 3–4 months after your application. Article 88 of the Tax Code of the Russian Federation allocates 1 quarter for desk verification of the declaration. You will have to wait another 30 calendar days for the return decision to be executed. This period is established by Article 78 of the Code. The entrepreneur can dispose of the amount credited to the account immediately.

The law does not impose strict deadlines for filing a declaration. Until April 30 of the next year, form 3-NDFL is submitted by entrepreneurs on OSNO and individuals who are required to declare income. If the report is needed only to obtain a deduction for the purchase or construction of housing, you can send it any day. You have 3 years to submit documents. So, if an agreement is concluded in 2015, it is allowed to submit an application in 2016, 2022 and 2022.

What is a tax deduction, and how to apply for it if you are an entrepreneur?

When purchasing an apartment, you can receive a tax deduction if you are a resident of the Russian Federation, that is, a person who permanently resides in Russia for at least 183 days per year and pays income tax (equal to 13%, excluding dividends).

If a person carries out entrepreneurial activities, then a reasonable question arises: which individual entrepreneur has the right to return the tax, and who does not have such an opportunity by law?

Let us be clear: an individual entrepreneur can have the status of a resident of the Russian Federation and pay 13% of his income to the state budget. If both of these conditions are met, the entrepreneur has the right to receive a tax deduction for the purchased apartment.