Income tax per apartment per year

Last updated February 2019

On January 1, 2016, new rules for taxing income from the sale of real estate came into force (changes introduced by Federal Law No. 382-FZ of November 29, 2014). Later in this article, we will look at the key changes, as well as the question of who will and will not be affected by these changes.

Increased minimum tenure for sales without tax

Prior to January 1, 2016, the minimum tenure for tax-free real estate sales in all situations was three years. According to the new regulations (valid for real estate acquired after January 1, 2016), the minimum period of 3 years applies only for certain cases:

• if the housing was acquired by inheritance / as a gift from a family member or close relative;
• if the ownership of housing was obtained as a result of privatization;
• if the housing was purchased under a dependency agreement with a lifetime maintenance.

In all other cases (for example, if you purchased an apartment under a sales contract), the minimum tenure for a tax-free sale is 5 years.

More detailed information with examples is presented in our article: How much do you need to own an apartment to sell it without tax? .

Now, when calculating the tax, the cadastral value of the property is taken into account

Until January 1, 2016, for tax purposes, income received from the sale of real estate was considered based on the value specified in the contract. From January 1, 2016, if you sell real estate at a cost below 70% of the cadastral price, then for tax purposes, 70% of the cadastral value is recognized as income received from the sale of this property.

You can find more detailed information with examples in our article: Tax on the sale of housing and cadastral value.

The new rules apply only to properties purchased after January 1, 2016

According to paragraph 3 of Article 4 No. 328-FZ of November 29, 2014, the new rules that we have discussed above apply only to real estate acquired in ownership after January 1, 2016. For real estate purchased before January 1, 2016, the old tax rules apply: the minimum tenure is 3 years, the cadastral value of the property is not taken into account when calculating personal income tax.

Example: in 2015 Filin F.N. inherited an apartment from his grandfather with a cadastral value of 5 million rubles. He sold this apartment in 2016 for 1.5 million rubles. Applying the standard deduction for the sale of real estate in the amount of 1 million rubles, Filin will have to pay a tax of 65,000 rubles. = (1,500,000 - 1,000,000) x 13%. Since the apartment has been owned by Filin since 2015, when it is sold in 2016, the cadastral value of the object is not taken into account

Example: in 2018 Schukin I.I. received an apartment as a gift. In the same year, he sold it for 2 million rubles, the cadastral value of the apartment is 5 million rubles. Since Shchukin became the owner of the property in 2018, when selling it, the tax will be calculated taking into account the cadastral value. The property was sold for less than 70% of its cadastral value (2 million euros).< 5 млн. х 0,7), поэтому налог с дохода от продажи составит 325 000 руб. ((5 000 000 кадастровая стоимость х 0,7 понижающий коэффициент) - 1 000 000 стандартный вычет) х 13% ставка налога).

In 2016. From this article you will learn the procedure for paying tax, ways to reduce it and much more.

Tax deduction when selling an apartment in 2016

At the moment, its size is set by the state and equals 1,000,000 rubles. Thus, when owning a living space for less than 3 years, you can count on a tax reduction in the following way:

Ivanov Ivan sells an apartment for 4,000,000 rubles. He could pay tax on the sale of an apartment in 2016 equal to: 4,000,000 * 13% = 520,000 rubles. However, having received a deduction of 1,000,000 rubles from the sale price, he will now pay (4,000,000-3,000,000) * 13% = 3,000,000 * 13% = 390,000 rubles. Thus, the actual amount of tax, regardless of the cost of the apartment, is reduced by 130,000 rubles.

It follows that with a housing price of a million or less, when using the deduction, you will not have to pay at all. In other words, the cost of the apartment is equal to or lower than the amount of the deduction, which means that the estimated amount with which the tax must be paid is 0 rubles, which means that the tax is 0 rubles.

It is worth mentioning that a system is quite common when the seller artificially underestimates the value of real estate, setting it below a million in order not to pay tax on the sale of an apartment in 2016. this will not pass. And the rest of the amount the buyer transfers to him by agreement.

However, changes in the law that apply to real estate purchased after 01/01/2016 unequivocally state that the cost of an apartment during the sale cannot be underestimated, and it is calculated at the cadastral value. The actual value of the apartment cannot be less than 70% of the cadastral value. Although, individual regions can set their own mark, for example, 50%.

Attention! The new value formation principle affects ANY property purchased after 01/01/2016 and regulates taxation.

Sale of an apartment in shared ownership

When a property is jointly owned and sold in its entirety, and the sellers want to receive a tax deduction, the amount will be divided between the owners in proportion to the size of their shares.

However, if the shares are sold separately, that is, each owner sells his share, then each of them ends up with a full deduction. Example:

Sidorov and Petrov are selling housing that is in shared ownership. Suppose each of them owns exactly half of the apartment.

The total amount is 3,000,000 rubles, the share of each of them is 1,500,000 rubles. When selling all real estate, everyone can count on a deduction of 500,000 rubles (the total deduction of 1,000,000 rubles is divided in half). Then everyone will pay a tax in the amount of (1,500,000-500,000) * 13% = 1,000,000 * 13% = 130,000 rubles.

And if they sell shares separately, then the deduction amount for each will be completely 1,000,000 rubles. And you will have to pay (1500000-1000000) * 13% = 500000 * 13% = 65000 rubles. In other words, selling shares separately is more profitable in terms of taxation.

Expenses deduction

The taxpayer has the right to deduct from the value of the property the amount that he spent on its acquisition. Such expenses must be documented.

Ivanov sells housing for 5,000,000 rubles. But he has documents in his hands confirming that he spent 3,000,000 rubles on the purchase of this apartment, which means that the total tax amount is (5,000,000-3,000,000) * 13% = 2,000,000 * 13% = 260,000 rubles.

If Ivanov decides to sell the apartment for 3,000,000 or less, he will not have to pay taxes on the sale of the apartment in 2016 at all, since the deduction will fully cover the cost of housing.

Filing a tax return

the tax office is not required if you own real estate for more than 3 years(5 years if purchased after January 1, 2016). Actually - there are no taxes, so there is no need to report.

But when taxing, you need to file a declaration in ANY case. Even if your tax is 0r. If you do not file a declaration, you risk getting a fine (the minimum amount is 1000 rubles).

Related videos

In this video you will find out the expert's opinion on taxes on the sale of an apartment since 2016:

conclusions

Summarizing the above, we can briefly describe the situation as follows. If you have owned a home for more than 3 (5) years, you do not need to pay tax on it, nor do you need to file a declaration. When using the deduction, you can reduce the cost of taxes down to zero, but you still have to file an income tax return.

From January 1, 2016, the rules for taxation of personal income received from the sale of real estate will change.

New law on taxes on the sale of an apartment less than 5 years old

In order to reduce the number of speculations in the secondary market and partially prevent the concealment of taxes during the sale, from January 1, 2016, amendments to the Tax Code will come into force. They will affect personal income tax in the amount of 13%, which had to be paid upon sale if the property (apartment) had to be owned for less than 3 years. Now the term will increase by 2 years and will be 5 years.

Who will be exempt from sales tax

Currently, income from the sale of real estate owned by a taxpayer-citizen on the right of ownership for 3 years or more is exempt from tax.

Under the new law, this three-year provision is retained only in the following cases.

• Sale of an apartment received as a gift from close relatives (first degree of kinship) or by inheritance;
• A privatized apartment (the property was owned due to privatization);
• Acquisition of property by the rent payer (for life maintenance contracts including dependents).

For residents of the Russian Federation, the tax rate is 13%.

How will the tax be calculated

When determining the taxable base (Article 210 of the Tax Code of the Russian Federation) for the payment of personal income tax on the sale of real estate, its cadastral value multiplied by a factor of 0.7 will be taken into account. If the transaction amount is less than this value, then the cadastral value of the property multiplied by the specified coefficient will be taken as income.

For example, if the cadastral value of such an apartment is 9 million rubles, then despite the cost of the apartment specified by the parties in the contract, the income subject to personal income tax will be 6.3 million rubles (9,000,000 * 0.7).

The new rules apply only to those real estate objects that were acquired by citizens in their ownership starting from January 1, 2016. If the property was acquired earlier, then the old taxation procedure is retained in relation to the income from its sale.

Tax deduction for the sale and purchase of a new apartment

There are several ways to significantly reduce the amount of tax you pay. This is a tax deduction or payment not from income from the sale of an apartment, but from the difference between the income from the sale itself and the purchase costs.

The latter method requires strictly documented confirmations. That is, additional costs for the acquisition may include:

• development of design estimates;
• expenses for construction materials and the construction itself, repair work;
• connection to water supply networks, electricity and gas supply and other engineering networks;
• finishing and other repairs.

In order for these conditions to be used, for this, the contract of sale and numerous supporting documents must contain real facts and amounts.

For example, for compensation for finishing, the contract should have indicated that the apartment is being sold without it. The same applies to connection to engineering networks.

How the tax deduction is calculated

To reduce the amount of personal income tax when selling an apartment less than 3 years old, a deduction of 1 million rubles is applied. It is deducted from the total value of the property. Tax is paid on the balance.

For example, if the cost of the object is 2 million rubles. Personal income tax will be calculated from the amount of 1 million rubles.

When selling several properties during the year, this deduction is used in aggregate.
If the purchase and sale of an apartment (less than 3 years of ownership) was carried out in the same tax period, then you can use two deductions:

The first is for apartment sellers, that is, 1 million rubles.

The second is provided to buyers, and its amount does not exceed 2 million rubles.

For non-residential premises, the tax deduction is less - only 250 thousand rubles.

Sale of a privatized or donated apartment

For these cases, it is possible to use a tax deduction or confirmation of acquisition costs. The tax deduction applies to real estate only more expensive than 1 million rubles.

If the value is less, then it cannot be used. Here you will have to present proof of expenses in order to pay tax on the difference between the income from the sale and the costs of putting the apartment in order. Privatization may also be included in these costs, if it was not free and required significant changes in the documentation.

What will the new rules bring?

Under the new rules, it becomes possible to sell without paying tax after the expiration of a three-year period for a number of cases (inheritance/donation, rent, privatization). The terms of the tax deduction and tax reduction due to documented acquisition costs remain unaffected.

Also, innovations will affect tax calculations and tightening in relation to understating the transaction amount.

The amendment emphasizes that the tax will be levied on the cadastral value multiplied by a reduction factor (0.7). In cases where the income from the transaction is declared below the "cadastre by 0.7", more insistent requirements will be put forward to indicate the real value of the apartment.

What are the taxes in case of assignment of property rights?

Assignment of rights can be made only until the moment of registration of property rights. After receiving the certificate, such a transaction is impossible.

Assignments are usually resorted to in 2 cases:

• if you do not want to live in an apartment that was bought from the developer;
• when investing to reduce costs.

In the case when the apartment was acquired through shared construction, the developer's permission for the assignment and registration of the contract with Rosreestr is required.

If the apartment is from a housing cooperative, then you need to carefully read the contract, specifying whether there is a clause on the assignment of rights.

It is possible to make an assignment with the transfer of a debt or a fine, but without taking into account subsidies. This applies to maternity capital and other benefits that were used when joining a housing cooperative or shared construction. The assignment can then be interpreted as cashing out maternity capital.

On January 1 of the current year, the amendments made on 29/11/14 to the Tax Code (note - Federal Law No. 382) on the sale of real estate came into force. The new rules for calculating taxes are aimed at combating speculative transactions.

What will these changes bring to ordinary people?

Changing the minimum tenure of property for tax exemption

Until 2016, there was only one rule for all owners: housing owned for more than 3 years - you do not need to pay tax. According to the new rule, which ONLY applies to real estate that has been bought AFTER JANUARY 1, 2016, the period of 3 years is increased to 5 years.

When selling a home purchased BEFORE 01/01/16, the OLD RULES apply!

So what you need to know...

Firstly, it is still possible to sell an apartment with a 3-year ownership period. True, only in a few cases.

For example, if she...

1. Got it by inheritance.
2. It was donated by one of the close relatives (note - Article 14 of the Family Code).
3. It was transferred under an annuity agreement (note - for life / dependent maintenance).
4. The property was obtained through the privatization procedure.

In these cases, the tax will not have to be paid, regardless of the selling price of the apartment.

In all other cases, before selling a home, you will have to wait until 5 years have passed (not calendar years, but 5 years of continuous ownership of an apartment) after receiving a document of ownership. An earlier sale of an apartment obliges the owner to pay tax on the sale of housing, equal to (note - for residents) 13 percent.

Selling price of the home

This is another innovation.

Previously, prior to 01/01/16, taxable income from the sale of housing was equal to the amount in the purchase / sale agreement. That is, it is written in the contract - “2,000,000 rubles”, which means that tax is charged from them. And regardless of the cadastral and market value. This “gap” in the Law has been successfully and for a long time used by sellers who want to evade taxes. About 20-30 percent of transactions were carried out according to this scheme: the contract simply indicated an underestimated amount (usually very much underestimated - by 2-4 million) - up to 1 million rubles, and the second contract (for example, the sale and purchase is inseparable / improvements) lay with the buyer (for insurance).

What now?

And now the income from the sale of housing that requires a declaration is:

1. Negotiated apartment price (note - provided that it is higher than the cadastral value multiplied by the reduction factor).
2. Or cadastral value (note - as of 1/01 of the year of sale), multiplied by 0.7, provided that it is greater than the contract value.

For example:

1. The apartment has been in your property for 2.5 years. The size of the sale value (note - in the purchase / sale agreement) - 4 million rubles, and the cadastral - 6.7 million rubles. The cadastral value, multiplied by the reduction / coefficient, is 4 million 690 thousand rubles. In this case, the contract price will be lower, which means that the tax will have to be paid on the cadastral value.
2. Apartment in your property for 2.5 years. The sales price is 4.3 million rubles, and the cadastral price is 6.3 million rubles. Multiplying the cadastral price by the lower / coefficient, we get 4,410,000 million rubles. Since this amount is less than the contractual amount, the tax must be paid on the amount specified in the contract - from 4.3 million rubles.

RosReestr is responsible for determining the cadastral price. In the case when this price is not determined in a particular region, only the contractual cost of housing is involved in the calculations.

How real estate tax is calculated from January 1, 2016 - calculation examples

If you are selling a home that was purchased BEFORE 01/01/16 and your title is more than 3 years old, you are exempt from tax. If the apartment was bought AFTER the specified date, and the amount in the contract is higher than 70 percent of the cadastral price of housing on January 1 of the year of sale, then the tax will be calculated according to the formula A (sales price of housing) minus B (purchase price).

You can reduce the tax to zero by specifying in the contract the amount for which you bought and this price is MORE THAN or equal to 70% of the cadastral value of the property.

Example:

Having bought a house in 2016 for 3 million rubles, you sell it in 2018 for 5 million rubles. The cadastral price for 2018 is 3.5 million rubles. And 70 percent of 3.5 million is 2,450,000 rubles. The price in the contract is more than this amount. Accordingly, the sale value of your home is above 70 percent of the cadastre/value. The amount you need to pay tax on is 5 million - 3 million = 2 million rubles.

Can this tax be reduced to zero? Can. The contract should indicate not 5 million rubles, but 3 million rubles. This amount will not exceed 70 percent of the inventory / price (that is, 2,450,000 rubles), which means you do not receive income and may not pay tax.

Property tax deduction for the sale of an apartment in 2016

You sold the apartment for more than you bought it. This means that they have received income and, accordingly, are obliged to file a declaration and pay tax to the state. But there is good news: income in the future calculation of the tax can be reduced. And the property deduction will help in this, which, oddly enough, not everyone knows about.

The deduction is 1 million rubles / year (note - Article 220, paragraph 1, paragraph 1 and paragraph 1, paragraph 2 of the Tax Code). That is, when selling housing, the price of which (approx. - contractual or cadastral) is less than or equal to 1 million rubles, you are exempt from tax. But from the amount that exceeds this 1 million rubles, you will have to pay 13 percent to the state / treasury.

For example:

1. You have owned the apartment for 2.5 years. When selling, the price in the contract is 3.3 million rubles. and it is higher inventory/value. This means that your income, from which you will have to pay tax, is 2.3 million rubles. (3.3 million - 1 million "deductions"). From this amount you will pay tax, which will be (2.3 million x 13%) 299,000 rubles.
2. You have owned the apartment for 2.5 years. When selling, the price in the contract is 970,000 rubles, and it is higher than the inventory / cost. This means that your income, from which you will have to pay tax, is 0 rubles (970 thousand - 1 million "deductions"). If the income is less than it / deduction, then it is equal to zero, and you are exempt from tax. The situation is the same if the income is equal to the deduction itself.

On a note!

Regardless of whether you need to pay tax or not, you MUST submit an income declaration to the tax authorities if you have owned the sold housing for less than 3-5 years. Otherwise, you will be fined.

What to expect from changes in taxation on the sale of real estate - a forecast of lawyers

Advantages of innovations:

1. Unscrupulous transactions with apartments will be a multiple less.
2. The possible prospect of a declining market or stagnation increases the likelihood that your costs will equal or even exceed the income from selling a home. This means you don't have to pay taxes.

Disadvantages of innovation:

1. The minimum limit period for housing ownership for obtaining the right to a property deduction is 3 years and is valid in cases of privatization of an apartment, inheritance, gift or purchase under a life/rent agreement. In all other situations, you need to wait 5 years. This means that the seller of an apartment purchased under a debt/construction agreement after 01/01/16 will lose the right to a deduction if his/her home is sold earlier than 5 years have passed since the issuance of a property certificate.
2. It is not known what the size of the cadastral value will be in a few years. It can be more or less than the market value. And you still need to try to find a buyer who would agree to a lower price in the contract.

Predictions:

1. If the ruble becomes much cheaper, and housing will have to be sold earlier than the deadline indicated by law, then the amount of income can be very significant if the price of an apartment in rubles rises.
2. Sellers, for whom the purchase of apartments is a business, will offset their tax expenses at the expense of buyers. That can, in turn, significantly change the situation in the real estate market.
3. Given the high mortgage rates, the real estate rental market will develop. The tax costs of the owners will be repaid by renting out the property.

1. If you are likely to sell the apartment you bought, pay special attention to its current cadastral price, as well as the period of ownership. If possible, wait for a period that allows you to be exempt from tax on legal terms.
2. The hardest thing will now be for those sellers who took apartments at a lower cost before 01/01/16, and now, earlier than the deadline indicated by law, they are forced to sell them. They are definitely advised to wait for the moment when they can be exempt from the tax.