Application for a property tax deduction

Types of property deductions

Property deductions applied to income taxed at a rate of 13% are discussed in Art. 220 Tax Code of the Russian Federation. It talks about 4 types of deductions:

arising in the event of the sale of property (subclause 1 clause 1);
equal compensation for the value of property sold by the taxpayer (subclause 2, clause 1);
in relation to the costs of purchasing housing (subclause 3, clause 1);
on interest for a loan taken for the purpose of purchasing a home (subclause 4, clause 1).

The question of applying for a deduction arises in relation to the last 2 types.

How to pay personal income tax when selling a car and other movable property? You will find a detailed algorithm with formulas and example calculations in the ConsultantPlus situation.

Features of repayment of a mortgage loan with two or more co-borrowers

When registering real estate as shared ownership, it is divided into shares, and this decision is recorded in the title documents. Each shareholder submits an application for a deduction taking into account the expenses he has incurred. All costs are documented. If the share is registered in the name of a minor, then the deduction is provided to his legal representative.

When concluding a joint mortgage agreement, there can be more than two people. In this case, the acquired property is registered as shared property.

Deductions for mortgage interest are provided upon application by the owner, indicating how it should be divided between them. The proportions may change each year, but only in terms of percentages. For shared ownership, it is important when the housing was purchased: if before 2014, then the distribution of the main deduction is taken into account; after 01/01/2014 this can be done regardless of it.

Deductions when buying a home

Deductions related to the costs of purchasing housing are most in demand. They are divided:

for direct purchase costs;
contributions to construction, including the purchase of land for it;
interest on targeted loans taken for the purchase or construction of housing.

These deductions are limited to the following amounts:

2 million rub. for purchase or construction expenses, and the deduction can be used in full, and if the amount of costs for one object is insufficient for this, then in relation to several objects (subclause 1, clause 3, article 220 of the Tax Code of the Russian Federation);
3 million rub. for interest on a loan (clause 4 of Article 220 of the Tax Code of the Russian Federation), but such a deduction is applicable only to 1 object (clause 8 of Article 220 of the Tax Code of the Russian Federation).

Both types of deductions can be used simultaneously for the same object and also apply to situations of acquisition of property in favor of owners under 18 years of age by their parents or guardians (clause 6 of Article 220 of the Tax Code of the Russian Federation). But they are not applicable for expenses paid not by the taxpayer himself, by budgetary funds or maternal capital funds, as well as for transactions with interdependent persons (clause 5 of Article 220 of the Tax Code of the Russian Federation). You cannot get them a second time (Clause 11, Article 220 of the Tax Code of the Russian Federation).

Acquisition is possible in shared ownership. This does not prevent each of the owners from taking full advantage of both deductions in the amounts established by law.

Distribution of tax compensation when spouses purchase housing in common shared ownership

Nobody prohibits registering housing in shares. From 01/01/2014, shared ownership does not prevent the redistribution of expenses on the basis of an application for the distribution of tax deductions between spouses (Letter of the Federal Tax Service of Russia dated March 30, 2016 No. BS-3-11/).

They have the right to both receive a return in accordance with their shares and change them by submitting an appropriate application.

Example: The Ivanov spouses purchased in shared ownership (1/2 each) an apartment worth 3,500,000. Despite having equal shares, they decided to distribute expenses: in the amount of 2,000,000 rubles. - Ivanova and 1,500,000 rubles. — Ivanov, since his wife earns more.

Expenses taken into account in the deduction

A residential property (or part of it) can be purchased ready-made or unfinished, built through equity participation in construction or on its own. For deduction, it is legitimate to take into account all costs directly related to its occurrence. In addition to the funds directly paid for the acquisition of an object or a share in construction, the following expenses can be taken into account:

for design and budgeting;
construction and completion;
finishing (materials and work);
connection to general networks or construction of local sources of water, gas, heat, electricity, as well as autonomous sewerage.

Costs for completion and finishing are taken into account only if the property was purchased unfinished or the contract provides for the transfer of housing to the owner without finishing (subclause 5, clause 3, article 220 of the Tax Code of the Russian Federation).

Documents giving the right to deduction

A person claiming a deduction must collect all documents certifying the fact of acquisition of property and the amount of expenses incurred on it:

certificates of ownership (land, house, apartment, room, share);
purchase agreements, equity participation agreements, acceptance certificates;
when purchasing for children or wards - documents about birth or guardianship;
mortgage or targeted loan agreement;
payment documents of any kind for all expenses.

This set, in terms of the volume of costs incurred, should be as complete as possible, since adjustments to the amount of deductions already declared for a specific object (except for the amount of interest on the loan) are not provided (letter of the Ministry of Finance of Russia dated June 11, 2014 No. 03-04-05/28176) . An exception is the situation of paying for housing in installments (letter from the Federal Tax Service of Russia dated November 12, 2014 No. BS-4-11 / [email protected] ).

For a complete list of necessary papers that should be prepared when applying for a property deduction, see here.

Distribution of deductions for shared ownership

When real estate is in shared ownership, the deduction for interest paid is distributed in a similar way, i.e. by agreement of the homeowners. In this case, the size of the shares is not important. Proportions can be changed annually.

Reference! Real estate acquired by spouses can be registered as shared ownership. They also distribute the property deduction for interest among themselves by mutual decision (Letter of the Ministry of Finance of the Russian Federation No. 03-04-05/31445 dated May 16, 2017).

Calculation example

Real estate purchased with a mortgage is divided into three shares:

50%;
30%;
and 20%.

For 2016, interest was paid in the amount of 512 thousand rubles. The co-owners decided that they would request a deduction in proportion to their shares:

(512,000 * 50%) * 13% = RUB 33,280;
(512,000 * 30%) * 13% = 19,968 rubles;
(512,000 * 20%) * 13% = 13,312 rubles.

In 2022, interest payments amounted to 472 thousand rubles. But the shareholder, who has 30% of the property, lost his job and had no official income. It was decided that the first and third co-owners would each receive a 50% deduction: (472,000 * 50%) * 13% = 30,680 rubles.

When can you start applying the deduction?

The question of obtaining a deduction will become relevant when the property is registered for a residential property or the taxpayer receives an acceptance certificate for a finished shared construction project. Until this moment, neither the registration of the right to land allocated for development (subclause 2, clause 3, article 220 of the Tax Code of the Russian Federation), nor the costs of paying interest on a mortgage (clause 4, article 220 of the Tax Code of the Russian Federation) do not allow one to exercise the right to deduction.

You can start applying the deduction in 2 ways:

In the year when the right to a deduction appeared (without waiting for the end of the year), submit the package of documents collected on it to the Federal Tax Service at your place of permanent residence and a month later pick up a notice of the right to a deduction there to receive it from your employer already in the current year (p 8 Article 220 of the Tax Code of the Russian Federation). The form of this notification was approved by order of the Federal Tax Service of Russia dated January 14, 2015 No. ММВ-7-11/ [email protected] It is intended for issuance to a specific employer, whom the taxpayer will indicate in the application.
Wait until the end of the year in which the right to deduction arose and submit a set of documents on it to the Federal Tax Service along with the 3-NDFL declaration for the corresponding year (clause 7 of Article 220 of the Tax Code of the Russian Federation). After checking the documents and declaration, the Federal Tax Service will return the tax accrued on it as a refund, and for the remaining amount, if desired, the taxpayer will give a notification of the right to a deduction for its use at the place of work. The declaration is submitted together with 2-NDFL certificates from all employers. Its verification will take 3 months (clause 2 of Article 88 of the Tax Code of the Russian Federation), and another month will be spent on procedures for tax refund (clause 6 of Article 78 of the Tax Code of the Russian Federation) and issuing a notification of the right to deduction (clause 8 of Article 220 of the Tax Code RF).

For information on how to fill out the declaration correctly, read the article “Sample of filling out the 3-NDFL tax return.”

Thus, the deduction begins to be applied from the year the right to it appears and is used in subsequent years, provided that there is income in them from which personal income tax is withheld. The deduction will be applied for the number of years necessary for its full use for the entire amount of expenses confirmed by documents (clause 9 of Article 220 of the Tax Code of the Russian Federation).

For pensioners, it is possible to use the deduction for 3 years preceding the year the right to it became available (clause 10 of Article 220 of the Tax Code of the Russian Federation). If in the year the right to deduction arose there was no income subject to personal income tax, then the deduction can be applied for in subsequent years (without limiting their number), but no later than 3 years from the end of the years for which the tax must be returned (letter from the Ministry of Finance of Russia dated June 11, 2014 No. 03-04-05/28218).

An employer who has received a notice of the right to a deduction will begin to use it from the month of receipt, but in relation to income for the entire year (letter of the Ministry of Finance of Russia dated September 25, 2015 No. 03-04-05/55051). If at the time of providing the notification for the current year, the tax has already been withheld and it is not possible to return the excess withheld amount at the place of work from the accrued tax for the year (the amount of deduction exceeds the amount of accruals), its refund will be carried out by the Federal Tax Service (letter of the Ministry of Finance of Russia dated July 15, 2014 No. 03 -04-05/34402).

Regardless of the method by which the deduction is applied, the right to use its balance (if the deduction is to be used for several years) must be annually confirmed with the Federal Tax Service in one of the following ways:

Receive a notification for your place of work at the beginning of the year - upon application for the issuance of such a notification (clause 8 of Article 220 of the Tax Code of the Russian Federation).
Submit a declaration to the Federal Tax Service and return the tax through it - according to the application for the return of personal income tax (clause 6 of Article 78 of the Tax Code of the Russian Federation), which indicates the account details for the tax refund. Submitting an application for the application of a property deduction is not necessary (letter of the Ministry of Finance of Russia dated November 26, 2012 No. 03-04-08/7-413). Its role is played by the declaration itself.

Since 2022, a simplified procedure for obtaining a deduction has been in effect. You can read more about this in the article.

Distribution of the mortgage deduction for joint ownership by spouses

Article 220 of the Tax Code, which regulates the application of the property deduction, states that spouses can divide it in any proportion by agreement. Only one person is allowed to use the benefit.

The deduction provided for the main expenses for the purchase and sale of housing is distributed based on the application of the spouses only once. Then you cannot change it. As for percentages, you can change the proportions every year.

If the property was purchased before 2014, then the interest deduction is distributed in the same proportion as the benefit on basic costs. When purchasing an apartment or house later, there is no such requirement. The maximum amount of interest deduction is 3 million rubles.

In order to return the interest paid, you must provide a 3-NDFL declaration and write a statement on the distribution of expenses.

Application to the tax office

The application along with the declaration is submitted to the tax office. The structure and procedure for filling out these documents is regulated by letter of the Federal Tax Service of the Russian Federation No. ED-4-3/19630 dated November 22, 2012. The application is drawn up as follows:

indicate the name of the Federal Tax Service in the header;
This is followed by information about the applicants (full name, tax identification number, passport details, address, contact telephone numbers);
the main part, which indicates how the mortgage interest is divided (indicating the address of the property, full names of the property owners and the size of the shares in percentages and rubles);
date of drawing up the document and signatures of the parties.

If the application is submitted for the first time, then the attachments are indicated in it. This is an extract from the Unified State Register and a marriage certificate.

We do not recommend completing the documents yourself. Save time - contact our lawyers by phone:

8 (800) 302-76-94Moscow

You can find out how to correctly write an application for a deduction and what documents are needed for this in this article.

Calculation example

The couple got married in 2015, and in 2016 purchased an apartment worth 2.7 million rubles. The amount of interest paid for the year amounted to 347 thousand rubles. It was decided to divide the deduction by percentage as follows: 60% for the husband, 40% for the wife. After submitting documents and a desk check, they were provided with deductions:

husband: (345,000 * 60%) * 13% = 26,910 rubles;
wife: (345,000 * 40%) * 13% = 17,940 rub.

When the question arises about the distribution of deductions

A taxpayer may have several jobs or change jobs during the period of application of the deduction.

If a person works in several places at the time of issuing a notification of the right to a deduction, you can request several such notifications from the Federal Tax Service, distributing the amount of the deduction between all places of work (clause 8 of Article 220 of the Tax Code of the Russian Federation). Information about employers and deduction amounts related to each of them may be indicated in one application.

When changing jobs, a deduction for a new place will be possible only after notification of the right to it is provided, addressed to the new employer. At the same time, the Federal Tax Service Inspectorate has the opportunity to check the data on the refund already made by receiving a 3-NDFL declaration from the taxpayer for the year of job change (clause 7 of Article 220 of the Tax Code of the Russian Federation). The information reflected in the declaration will need to be confirmed with 2-NDFL certificates from all places of work for the year. 4 months after filing the return, the excess tax withheld for the year will be returned and the necessary notification will be provided.

To learn about receiving 2-NDFL from a former employer, read the article “Where can I get (get) a 2-NDFL certificate?”

The question of distribution of deductions may also arise when purchasing housing in joint ownership, if the total amount of costs for it is insufficient for all owners to use the deductions in full. They can take advantage of the opportunity to allow one of them to apply the deduction in full, redistributing it according to an application to the Federal Tax Service. Other owners in this situation use the deduction only partially or transfer it to other properties.

For details, see the material “Each spouse can receive a deduction for the purchase of property.”

How to get a deduction if a child’s property is purchased? You can find a detailed answer to this question in the analysis of the situation in the ConsultantPlus system. To do this, simply sign up for a free trial.

When do you need to write for redistribution without allocating shares?

When purchasing an apartment in joint ownership without allocating shares, it is recognized by default that the spouses equally own the acquired property.

By default, it is considered that the deduction is distributed between spouses in equal parts - 50/50 , however, if you wish, you can redistribute these parts at your discretion.

This is convenient, since it is possible that the benefit has already been used by these individuals in full or in part.

Each spouse has the right to a refund of income tax; initially, the amount of the deduction is the same for everyone - 2 million rubles. in relation to the costs of paying for the cost of the apartment. It is possible that this is not the first apartment for this family, and the benefit has been used previously. Then the spouses can redistribute their balances at their discretion.

The application must be written to the tax office in order to show exactly how the spouses want to divide the right to property benefits.

Depending on the distribution, a personal income tax refund will be made on the costs of purchasing an apartment.

An application for redistribution need not be submitted if the spouses have not previously returned income tax on real estate, and the cost of the current purchase is 4 million rubles or more. In this case, there is no point in notifying the Federal Tax Service about anything; the tax authorities will automatically, without an application, provide each spouse with the full amount of benefits of 2 million rubles. for everyone.

Shared ownership

If the apartment is purchased as a joint property, then each spouse is allocated a specific share.
Previously, the deduction was distributed in accordance with this share; in 2018, redistribution is made in two ways:

At the request of the spouses, based on the submitted application, if the apartment was fully paid for by one of the owners , or there is no documentary evidence of who exactly paid for the living space.
In accordance with housing costs, if both spouses participated in the purchase of housing.

Sample application to the tax office

The application for the right to apply a property tax deduction has a specific form recommended for use by the Federal Tax Service of Russia. The form is contained in the order of the Federal Tax Service of Russia dated August 17, 2021 No. ED-7-11/ [email protected]

On our website you will find a sample application for receiving notification of the right to a property deduction (through the employer), completed on a valid form:

A sample application for the return of overpaid personal income tax, submitted with the 3-NDFL declaration, can be downloaded here.

Property tax deduction for the purchase of housing by spouses in common joint ownership

In accordance with the RF IC, the regime of common joint ownership of property applies by default between persons who have entered into marriage, unless otherwise established by agreement between them. This means that everything acquired during the marriage, with some reservations, belongs to them equally, regardless of whose name it is registered in. This provision also applies to real estate.

IMPORTANT!

The decision made on distribution can be changed only before the start of the procedure for returning overpaid personal income tax (Letter of the Ministry of Finance of Russia dated October 31, 2017 No. 03-04-07/71600).

Each of the spouses has the right to return the personal income tax paid in an amount that depends on the expenses for the purchase of residential premises, regardless of which of them is in the name of which ownership of this real estate and payment documents are registered (Article 220 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated December 14, 2020 No. 03-04-07/109293). But the maximum amount with which a refund is calculated is two million for each. By default, the distribution is 50 to 50, but by applying for the distribution of property deductions between spouses, the husband and wife have the right to change this. If one of them does not have personal income tax income, it is impossible to transfer the right to use the deduction due to him to another. But the law allows you to take advantage of compensation in subsequent calendar years, provided that you receive the appropriate taxable income (Article 216, paragraph 9 of Article 220 of the Tax Code of the Russian Federation) or in the application for the distribution of shares in a property deduction, provide it only for the other spouse.

Example 1. The Voronovs bought an apartment for 3,000,000 rubles. As a general rule, each person is entitled to a deduction in the amount of 1,500,000 (return of 195,000 rubles). But the husband receives more, so the decision was made to apply for the redistribution of shares to the tax return in order to redistribute expenses in the proportion of 2/3 to Voronov (2 million) and 1/3 to Voronova (1 million). Thus, 260,000 rubles will be returned to Voronov, and 195,000 rubles will be returned to his wife. The remaining part is 1 million rubles. Voronova has the right to use it when purchasing another home.
Example 2. The Smirnovs bought an apartment for two million. But the wife does not officially work. They issued tax documents in the name of Smirnov, and there will be 260,000 rubles due for refund.

Results

The right to apply a property deduction for personal income tax arises when acquiring housing through its purchase or construction. The scope of the deduction includes all actual costs incurred in connection with the emergence of the corresponding object, and interest costs on the loan taken for the purchase (construction).

The deduction becomes applicable after acquiring ownership of the property and completing the investment in it. The Federal Tax Service must be notified of the emergence of the right to it either in the year of its occurrence or upon its completion. In the first case, you can start receiving the deduction at your place of work immediately, in the second, its amount attributable to the past year will be returned by the tax authority.

Since the amount of the deduction usually exceeds the employee's annual income, the tax refund in connection with it is carried out over several years. In this regard, an application for the use of a deduction is submitted several times until it is fully used. To fill out an application, the Federal Tax Service of Russia has developed a recommended form.

Sources:

Tax Code of the Russian Federation
Order of the Federal Tax Service of Russia dated August 17, 2021 No. ED-7-11/ [email protected]

You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

How to get a refund of interest: procedure

The procedure for requesting a tax deduction consists of several stages.

Collection of documents.
For shared ownership, an application for dividing the property into shares is attached. For living space purchased before 2014, the interest deduction is provided in the same proportions as the main one, and later - at the discretion of the shareholders.
The completed documents are submitted to the Federal Tax Service in person or sent by registered mail. You can register on the inspection website and submit papers through your personal account.
The desk audit takes 3 months. If the decision is positive, the funds will be transferred to the accounts of the homeowners within 30 days.

Reference! When spouses enter into a marriage contract, the deduction is provided according to the information from this document. An application for division of deductions is not made.

Read more about how and when you can get a tax deduction for mortgage interest here.

What documents are required depending on the situation?

In any case, the following documents will be required:

Borrowers’ passports (photocopies);
application for a deduction indicating the distribution of benefits;
declaration 3-NDFL;
income certificates 2-NFDL;
mortgage agreement with payment schedule;
a certificate from the bank indicating the exact amount of interest paid and confirmation of the absence of arrears on the loan.

If you purchased housing as shared ownership before 2014, you do not need to indicate the proportions in the application, because it is provided in the same way as a deduction for basic expenses.

Read more helpful articles from our experts about tax refunds on mortgage interest. Learn how to get interest back when refinancing and paying off your mortgage early, as well as how to get a deduction through your employer and tax authorities.