Tax deductions

According to the Tax Code, mortgage borrower has the right to  property tax deduction in the amount spent on construction or purchase of flats (houses) on the territory of the Russian Federation. Deduction is granted provided that the citizen has the income subject to income tax at a rate of 13%. In doing so  tax deduction includes the amount spent on the purchase (construction) and the amount of interest on mortgage loans.

In the construction or purchase of residential houses in  tax deduction may include:

• Cost of developing the project estimates;
• Cost of construction and decorative materials;
• Cost of residential homes, including unfinished;
• Costs associated with works or services for the construction and decoration;
• Costs to connect to networks or the creation of autonomous sources of electricity, water, gas and sewage.

When purchasing an apartment to the tax deduction may be included:

• Costs for the acquisition of rights to an apartment or an apartment house in construction;
• Cost of finishing materials;
• Expenditure on works related to the finishing flats.

Adoption deduction to the cost of completion of the finish and acquired an apartment or house may, if a sales contract stated acquisition that is unfinished construction of a house or apartment without decoration.

As property tax deduction can provide cost to buy (construction) of housing within 1 000 000 rubles. The amount of interest on mortgage loans that can be presented as a tax deduction, the legislation is not limited.

For property tax deduction should write a statement and attach to it: 

• Documents proving ownership of the apartment (home);
• Contract on purchase of flats (home) or rights of an apartment house in construction;
• Act of receiving the transfer of apartment-buyer;
• Payment documents evidencing payment of expenses included in  tax deduction (receipts to the receipt warrants, the seller’s apartments receipts, bank statements on the transfer of funds in repayment of a mortgage loan, cash and cashier’s checks, acts for the procurement of materials and other documents);
• Credit agreement.

Should keep in mind that no documents confirming ownership of housing, it is impossible to obtain a tax deduction. That is, if purchased in the apartment house construction, in order to obtain a tax deduction must await the moment when the hands will be a certificate of ownership or an act of reception-transmission. In addition, to confirm the amount of interest paid on mortgage loans, must annually creditor banks to receive payments from a statement made by them in the amount of principal debt and the amount paid per cent. If the mortgage loan was issued in foreign currencies, the tax deduction in the calculation of all payments on the loan converted into rubles at the rate of CB at the date of payment.

At the end of the year prepared a package of documents supplied with the tax declarations to the tax authorities of the place of residence. Tax inspector is considering a declaration in a period of up to 3 months, and provides an answer on the possibility of obtaining a tax deduction. If the answer is positive, you should write a statement requesting the transfer sum deduction for personal bank account. During the month, tax authorities are implementing a payment on the statement.

Or you can, without waiting for the end of the year to apply for a tax deduction employer. But in this case must be obtained from the tax authorities a document confirming the right to  property tax deduction , — notice, which indicates the name of the employer, which would not retain the income tax from wages, thus realizing the right staff member to receive a tax deduction. Now, if a worker to change jobs, we have to keep in mind that tax authority issued a notice for the current fiscal period (year) only once. That is, after the transition to new employment, the balance of income tax for the current year will be available only through the tax inspectorate. With the beginning of the new year to obtain the deduction from the new employer must again take notice of tax inspection.

Tax deduction on mortgage interest is granted as they pay the bank, for the deduction of interest must submit annually to the tax authority the entire package of documents to complete exhaustion of deducting the amount due.

Of limitations for filing applications for property tax deduction not. If the flat was purchased more than 3 years ago, the deduction can be obtained with the proceeds received in the last past three years by filing a declaration in the tax inspectorate for those periods.

If annual salary does not cover the amount owed tax deductions, they can be moved for next year.

Unfortunately, property tax deduction , associated with the acquisition of housing, granted to citizens only once in their lives. In doing so, the right to tax deduction does not arise if the transaction is the sale was conducted between interdependent parties — relatives (the concept of «family» is interpreted in terms of the Family Code), colleagues, consisting of relations «Chief — subordinate», etc. In addition, if re borrower loses the right to deduction of interest on new loans because it is not arranged for the purchase of housing, and to repay earlier loans.

If mortgage housing from owning more persons (for example, spouses), the amount of tax deduction is divided between owners, depending on how formalized housing — in common or joint ownership of shared property. If the joint property, the tax deduction and relies on an all owners, by default — in equal shares. You can redistribute share deduction statement to the tax authority, down to the fact that any of the owners can get the full deduction for themselves. For example, if one spouse’s income is high and the other spouse has no income (or they are unofficial), it is advisable to make a statement that the full amount of tax deduction would receive high-income spouse in order to more quickly obtain property deduction. In doing so, both spouses are considered to exercise their right to tax deduction, and none of them will not be able to use it again if the acquisition of other apartments or houses — that is the position ozvuchennaya regulations in the Ministry of Finance. But practitioners have a different view — they believe that the spouse to allocate its share of the deduction of 100% the other spouse retains the right deduction, which can be used when buying another home. Probably, that to date there is such a practice, and should clarify the specific conditions in the tax authorities on the ground.

If housing executed in shared property, the deduction should receive every owner independently and in an amount proportional to its share. For example, if the flat framed po1 / 2 shares for each spouse, each is entitled to a deduction from property ½ cost housing (but not more than 500 000 rubles) and ½ per cent paid on mortgages. Send the right of deduction in the case can not be shared property. If the share of property designed for a minor child, with this share will be able to get a tax deduction for only the child reaches adulthood, and subject them to obtain their own income.

I shared with and under the joint ownership of any of the owners can exercise their right to deduction in the amount owed him share, or abstain from it, while preserving the right of deduction in case of acquiring other real estate.

It is important to remember that to get the tax deduction on mortgage interest requires that payment documents were finalized in fact owner who draws up a deduction. Either from the recipient’s tax deduction should be formalized at a power of attorney of the owner who actually carries out payments on mortgage loans. And the power of attorney must be formalized in writing to the moment of making money.

calculating the tax deduction at mortgage

Priobretaetsya flat worth 2 200 000 rubles.
Paid by credit — 1 100 000 rubles.
Term Credit — 10 years.
The aggregate amount of interest on the loan — 550 000 rubles.
Amount by which you can get a tax deduction — 1550 000 rubles (1000 000 rubles. — The maximum amount of the cost of housing, which can be present to the deduction, and 550 000 rubles. — The full amount per cent).
Amount of tax deduction — 201 500 rubles (13% of 1 550 000 rubles.). In doing so, the amount
130 000 rubles. (13% of 1 000 000) can be obtained at once, regardless of whether any of the funds (to property or borrowed) was paid 1 000 000 rubles, and provided that the borrower’s income during the year provided a sufficient amount of income tax from which and implemented deduction. The amount of interest deduction is available only to the extent the payment of their creditor banks, that is within 10 years of lending.