Sale of an apartment up to 3 years of ownership: benefits, taxes

According to the Tax Code of the Russian Federation, any income is taxed unless otherwise regulated by additional conditions. Cash received from the sale of a home is also considered income and is subject to taxation if the property has been owned for less than 3 years.

How is sales tax calculated?

If you sell a house that you have owned for less than 3 years, you will need to pay income taxes. In 2017, this period applies to the following cases:

• the property was registered before 2016;
• real estate was inherited by will or as a gift;
• ownership is secured by a life annuity agreement;
• the property was registered after privatization.

In other cases, personal income tax is paid if the period of ownership of the real estate is less than 5 years. To avoid paying tax at all, the property must be owned for at least three years or, in some cases, five years.

The law states that the maximum amount from which tax deductions are not made is 1,000,000 rubles. That is, if the house is more expensive, then you will have to pay money.

Let's figure out how the tax is calculated when selling a house that has been owned for less than 3 years. The amount of 1 million rubles is not subject to taxation. Thus, if the property is more expensive, then 1 million is deducted from this cost. Let's say the house is valued at 4 million rubles: 4,000,000 - 1,000,000 = 3,000,000 rubles. This is the amount that is taxed.

In recent years, significant changes have been made to the Tax Code to prevent personal income tax evasion when official sales agreements establish an extremely low value, for example, less than 1 million rubles. According to them, 13% is calculated not from the amount for which the house was actually sold, but from 70% of its cadastral value, if the cadastral value exceeds the sale price.

Is it possible to reduce the amount of income tax? Yes, if you prove to the tax office that large sums of money were spent on this property before the sale. It can be:

1. Purchase expenses. Let's say you bought real estate, and six months later you decided to sell it. The amount of expenses is deducted from the amount of income. Confirmed by the purchase and sale agreement.
2. Repair expenses. Checks, receipts, agreements with construction companies are provided.
3. If the property was purchased with a mortgage - interest on the loan. Confirmed by the loan agreement.

If the real estate is in shared ownership, then each of the owners has the right to receive a benefit of 1,000,000 rubles. from the money from the sale, proportional to his share.

Tax on unfinished house

Taxation is calculated differently if the house is not completed. If in the case of residential real estate the deduction amount is 1 million rubles, then for unfinished real estate this amount is only 250 thousand rubles.

For example, the owner began to build a cottage, but at the beginning of construction he decided to sell it and set an amount of 800,000 rubles. Let us subtract 250 thousand rubles from here. and we get 550,000 rubles. From this figure 13% will be calculated.

Is there any way to change the deduction upward? Yes, recognize the unfinished building as residential. This can be done if the following conditions are met:

• communications have been carried out (water supply, gas supply, electricity);
• The premises are separated for housing.

In this case, the unfinished property is registered in the cadastral register and is recognized as residential. The deduction rises to the standard 1 million rubles.

Tax on a house with a plot of land

The cost of the house is summed up with the price of the land and from this amount 13% is calculated minus 1 million rubles. The funds from which the calculation is made are called the tax base. In this case, this is the total cost of real estate with land.

Personal income tax payment procedure

In order not to violate the law, the payment procedure must be carried out in a timely manner and, most importantly, correctly. Stages of mutual settlement:

1. Registration of the sale of a house by concluding a purchase and sale agreement with the buyer.
2. Filling out a tax return indicating the transaction completed.
3. Receive a receipt from the Federal Tax Service with payment details.
4. Direct payment itself.
5. Confirmation of the fact of depositing funds into the Federal Tax Service.

You can calculate how much you need to deposit yourself, but in order not to make a mistake, you can contact lawyers who will help you take into account all the nuances of the transaction and suggest the amount of tax.

The declaration can be completed in different ways. One of them is filling it out manually at the regional office of the Federal Tax Service. The second option is in electronic form on the official website of the Federal Tax Service.

The exact deadlines are specified in the Tax Code of the Russian Federation. The declaration must be submitted by the end of April of the year following the one in which the transaction was made. Payment of personal income tax on the sale of a house is required before June 15 of that year. For example, the owner sold the property on May 26, 2017, he must submit a declaration by April 30, 2023, and 13% must be paid by June 15, 2023.

Taxes and tax deductions in real estate

Last update: 06/10/2022

“Pay your taxes and sleep well,” adamant representatives of the fiscal authorities convince us. Arguing with them is more expensive for yourself. But knowing the rules for calculating taxes and tax deductions when buying or selling an apartment will help us save significant funds.

Below we will only talk about taxes and tax benefits that arise when making transactions with apartments . We will leave the tax on the ownership of property of individuals (including real estate), levied annually on each owner, behind the scenes, since it has nothing to do with transactions (for more information about it, see the link).

As you know, when you receive income , you need to pay tax to the state. Receiving money for a sold apartment is income . And in relation to it, in the general case, the personal income tax rate (personal income tax) = 13% (Article 224 of the Tax Code of the Russian Federation) applies.

But to the delight of these same individuals (both Sellers and Buyers), and to stimulate the real estate market, the state has provided a number of benefits in the form of tax deductions , which significantly reduce the tax base for the purchase and sale of apartments, or even reduce it to zero.

A tax deduction is the amount that is deducted from the tax base before tax (13%) . In essence, a deduction is a tax benefit that encourages citizens to more actively resolve their housing issues.

Tax deductions are “standard” (Article 218 of the Tax Code of the Russian Federation), “social” (Article 219 of the Tax Code of the Russian Federation), “property” (Article 220 of the Tax Code of the Russian Federation), and “professional” (Article 221 of the Tax Code of the Russian Federation). “Property deductions” apply directly to transactions for the purchase and sale of apartments .

When selling an apartment , the Seller incurs both taxes (on the income received from the sale of his apartment) and tax deductions (reduction of the amount subject to taxation).

When purchasing an apartment , the Buyer only has tax deductions (i.e. benefits when paying 13% personal income tax on his salary, for example).

Let's consider the cases of selling and buying an apartment one by one.

Consultations on taxes and tax deductions in real estate can be obtained HERE (SERVICES).

Apartment fraud. Instructive stories with practical examples. SPECIAL SECTION.

Tax and tax deductions when selling an apartment

From what amount is the 13% personal income tax for the Seller when selling an apartment that was his property?

tax base was calculated from the amount specified in the Apartment Purchase and Sale Agreement (APA). Now, to pay tax on the sale of an apartment, they began to take into account its cadastral value , which today is as close as possible to the market value.

Since January 2016, the taxable base for the sale of an apartment is the amount that turns out to be greater - either the price indicated in the DCT , or the cadastral value of the apartment, multiplied by a factor of 0.7 (clause 5, article 217.1 of the Tax Code of the Russian Federation). But (an important point!) this rule applies to the sale of only those apartments

Tax on apartment sales in 2023

Because of this, citizens have a lot of questions: is it always necessary to declare income from the sale of housing, on what amount is tax exempt when selling an apartment in 2023, are there benefits and other legal methods to reduce the amount payable to the budget. We will try to explain the main points using specific examples.

In what case will a transaction for the sale of an apartment be taxable for the seller?

According to the law, the sale of housing is perceived as the receipt of income by the seller. That is, he enters into a purchase and sale agreement with the buyer, transfers his living space into his ownership, and receives a sum of money for it.

Due to rising prices in the real estate market, this amount often turns out to be more than the price for which the property was purchased. This means that the former owner makes a profit.

Personal income tax must be paid on it, the rate of which in 2023 remains unchanged - 13%.

However, some citizens have reasons to sell their apartment tax-free in 2023, even if the transaction amount exceeds the cost of its acquisition. We are talking about the minimum tenure established by Art. 217.

1 Tax Code of the Russian Federation. In some situations it may be three years and in others it may be five years. If the property being sold is owned for longer than this period, the seller is exempt from tax and filing a 3-NDFL declaration.

Please note: Federal Law No. 424-FZ of November 27, 2018, from January 1, 2023, equalizes the rights of residents and non-residents to sell property without tax if it has been owned for 3 or 5 years. Otherwise, nothing has changed for non-residents: they will not be able to receive a deduction; they pay a tax of 30 percent if they sell the property before the minimum period of ownership.

To correctly calculate the minimum tenure, you need to count not full years, but the number of months: 3 years is 36 months, and 5 years is 60.

The start date of ownership can be found in an extract from the Unified State Register, or older versions of this title document (certificate of state registration of rights or an extract from the Unified State Register).

In accordance with recent changes to the law, a five-year minimum tenure period applies to residential property transferred into ownership after January 1, 2016. For objects purchased before this date, the old period of 36 months applies.

Example 1. Citizen Levchenko G.P. sold in April 2018 the apartment that he bought in March 2014.

Will he owe the state? In this case, the seller owned the property for less than the legally established five-year period, but the determining role is played by the fact that the property was purchased before the beginning of 2016.

This means that the previously established tenure period of 3 years (36 months) will apply. Levchenko was considered the owner for 48 months, so he is exempt from payment.

Example 2. Citizen Semchenko M.B. I bought an apartment in May 2016. From what year can she sell it in such a way as not to pay tax on the sale of the apartment? Since the living space was purchased after 01/01/2016, the owner will not be able to sell it without paying tax until June 2021.

The three-year minimum holding period for subsequent tax-free sale still applies if the property was acquired as a result of:

• inheritance;
• receiving deeds of gift from people related by family ties;
• transfer to private ownership under privatization programs;
• on the terms of a life annuity and maintenance of a dependent.

Apartments obtained using one of these methods, even if the date of their acquisition is after 01/01/2016, can be sold after 36 months of continuous ownership. At the same time, the tax on the sale of an apartment less than 5 years of ownership in 2023 does not need to be paid into the budget.

People of retirement age are often interested in whether they have to pay tax when selling an apartment and how much. Since pensions are not income subject to the 13% state tax, it may appear that pensioners are entitled to benefits. Is it really?

Example 3. Pensioner Petina M.I. I inherited an apartment from my deceased spouse in June 2016. In December 2018, she decides to sell it.

Will she be able to do this without paying tax on the sale of an apartment in 2023 that has been owned for less than 3 years? The 36-month period has not yet passed, so the pensioner will have to pay the required fee in 2023; no benefits have been established for these categories of citizens.

How is the amount of tax on the sale of an apartment calculated?

Another innovation in the law is the dependence of the amount of tax on the sale of real estate on the cadastral value. It is no secret that sellers, in order to reduce personal income tax, underestimate the cost of the object being sold in the contract. Because of this, the authorities had to once and for all resolve the issue of how much tax will be paid on the sale of an apartment in 2023.

If the contract value turns out to be artificially low, the fee will be calculated as 70% of the cadastral value of the property at the beginning of the year of the transaction.

As already noted, tax on the sale of an apartment in 2023 for individuals is charged if the sales amount exceeds the purchase price. For example, an apartment was bought for 2 million rubles, and a year later the owner sells it for 3.5 million rubles.

Using example 3, we will consider how the tax on the sale of an apartment in 2023 is calculated for individuals from pensioner M.I. Petina, who received an inheritance. Since she did not buy an apartment, tax will be paid not on the sale-purchase difference, but on the entire transaction amount.

Let’s say the cost of the apartment under the contract was 2 million rubles, and the cadastral value as of 01/01/2018 was 3.5 million rubles. The contractual amount is underestimated, since 0.7 * 3,500,000 = 2,450,000 rubles, so the tax will be calculated according to cadastral data using a property deduction:

• 0.7 * 3,500,000 -1,000,000 = 1,450,000 rubles (tax calculation base);
• 1,450,000 * 0.13 = 188,500 rubles – the amount of tax payable.

Only tax residents have the right to receive a deduction in the amount of 1 million rubles. These are Russian citizens, foreigners and stateless persons, provided they stay in Russia for most of the year in a row (183 days). An exception is the use of the sold object for business purposes.

A deduction of 1 million rubles is permissible for any residential property (rooms, apartments, houses), this also includes dachas and plots of land. For other non-residential properties (garages, sheds) a maximum deduction of 250 thousand rubles is provided.

So, taxpayers have only two ways to reduce personal income tax costs for the sale of housing:

1. apply a deduction of 1 million rubles;
2. take into account the costs associated with its acquisition.

Such expenses will include not only the amount of the initial purchase, but also the interest paid if there was a loan or mortgage, as well as the cost of the services of a realtor. All expenses must be supported by documents; the seller must have all receipts, contracts, etc. on hand.

Example 4. Yakovlev M.G. took out a mortgage on the house in August 2016 for 3 million rubles. In February 2018, he sold it for 3.4 million rubles. In the process of paying off the mortgage, interest in the amount of 150 thousand rubles was paid, and the help of a realtor cost Yakovlev 20 thousand rubles. Sales tax calculation:

• 3,400,000 - (3,000,000 + 150,000 + 20,000) = 230,000 rubles (tax calculation base);
• 230,000 * 0.13 = 29,900 rubles payable.

In practice, a property deduction is used when real estate is sold that was not obtained at the expense of the acquirer (inheritance, donation, privatization, rent, maternity capital). For those who bought an apartment with their own money, using a deduction of 1 million rubles instead of the “income-expenses” benefit option will increase the tax amount significantly.

Example 5. Dolgova E.P. I bought an apartment in a new building for cash in May 2016. She kept the documents in her hands: a receipt from the seller for receiving 1.7 million rubles and a bank payment order for this amount. In August 2018, she sold the apartment for 2.1 million rubles. Tax can be calculated in two ways:

1. Taking into account the deduction of 1 million rubles: (2,200,000 - 1,000,000) * 0.13 = 156,000 rubles.
2. Taking into account the costs of purchasing an apartment: (2,200,000 -1,700,000) * 0.13 = 65,000 rubles.

Obviously, the second method is preferable.

List of documents for payment of sales tax

Every taxpayer should know that along with the obligation to pay personal income tax from a real estate transaction, he has the obligation to fill out and submit a 3-NDFL declaration at the end of the year of sale.

The taxpayer in this report calculates the tax on the sale of real estate for himself in 2023 based on the income received from the sale. Moreover, the declaration is always submitted before payment.

Federal Tax Service inspectors are obliged to check it within the established time frame and identify errors and violations.

The declaration is verified based on the documents submitted, so the real estate seller must attach copies or scanned samples of:

• passports;
• purchase and sale agreement (new and old, if the apartment has been owned for less than 3 years, sales tax 2023 must be paid on the difference between “sale and purchase”);
• documents on the right (extract from the Unified State Register, Unified State Register or certificate of registration of the right);
• certificates of inheritance, privatization agreements or deeds of gift (as appropriate);
• receipts from the previous seller, new buyer, bank orders, checks, and other documents to confirm the transfer of money.

Note! From 2023, a new form of declaration 3-NDFL will be in force, approved by order of the Federal Tax Service dated October 3, 2018 No. ММВ-7-11/569@.

Unlike the old form, the new declaration is shortened and simplified; only the Title and both sections will have to be filled out, and the calculation will be entered in the Appendix.

As before, the most convenient way for taxpayers to submit reports is a personal account on the Federal Tax Service website, where you can fill out the declaration both online and download software with its current forms.

How not to miss deadlines

After calculating what tax the seller must pay on the sale of an apartment owned for more than 3 years in 2023, it is important to comply with the deadlines. For those who participated in real estate transactions in 2018, it is necessary to declare the income received by the end of April 2023. The payment deadline for the calculated tax amount is July 15, 2023.

The height of the declaration campaign in tax offices occurs in March and April. There is always a rush here at this time, so submitting reports should not be put off until the last few days.

Moreover, for late declaration there is a fine of 1,000 rubles to 30% of the tax debt.

Thus, taxation when selling an apartment in 2023 does not arise in all transactions. The length of time a property is owned plays a huge role. For those who want to sell their home tax-free, sometimes they just need to wait a minimum period.

Dear users, in the comments to articles, answers will only be published on questions related to the text of the article itself. If you would like an answer to a question about your specific situation or need help calculating taxes, please contact us for a consultation.

How to sell an apartment owned for less than 3 years without tax

According to tax legislation, every citizen of Russia is required to pay taxes on income, including those received from real estate transactions. However, there are cases when it is not necessary to pay tax on the sale of an apartment by law. This applies precisely to those moments when the residential space has been owned for less than 3 years.

It is important to know! What tax must an individual pay on the sale of an apartment in 2023?

How to avoid paying tax on a sold apartment?

If the apartment was purchased before January 1, 2016 and the seller owned it for more than 3 years, then he is completely exempt from paying tax. This rule was in effect for quite a long time. But amendments to the Tax Code have made their own adjustments, and now it takes more than 5 years to own residential real estate acquired after January 1, 2016 (Article 217.1 of the Tax Code of the Russian Federation).

But there are exceptions here. You can reduce the minimum period from five to three years if the apartment:

How to avoid taxation or reduce tax expenses when selling an apartment that has been owned for less than three years, we will discuss further.

Property deduction when selling an apartment owned for less than 3 years

You can reduce the base that is subject to taxation in the event of a home sale by using a property deduction. This is a fixed amount determined by law.

In 2023, it has not changed and is 1 million rubles.

This method of reducing tax on an apartment transaction is very convenient and effective when the seller cannot confirm the purchase with documents. The same is true with the construction of a private house and its sale, when it has been in possession for less than 3 years, and there is no way to prove the expenses incurred for construction.

But it should be taken into account that such a benefit is valid in one tax period, i.e. can be used once a year. If you sold one residential property, you will receive a property deduction. They wanted to sell the second one in the same year - the benefits no longer apply to it.

In the regions there is housing, the cost of which does not always reach 1 million rubles, but the property deduction is applied, regardless of the location of such a residential property. Accordingly, if the apartment was sold for a lesser amount, then there is nothing to calculate the tax on. Although here everything is not clear.

An example of filling out a declaration in form 3-NDFL.

Benefit when confirming the amount of expenses for an apartment

When selling an apartment or residential building that has been owned for less than 3 years or 5 years, you can reduce the tax base by the amount of expenses for its acquisition. In other words, from the amount of the transaction for the sale of an apartment, you can subtract the amount of the transaction for its purchase. The difference will be subject to personal income tax.

If both amounts - sales and purchases - coincide, then there is nothing to pay tax on, the tax is zero. This is used by some people who want to avoid taxation of the transaction.

They often deliberately inflate the purchase price or, conversely, understate the sale price, so as not to show the income received as a result of the sale when the property was owned for less than a minimum period.

It is important to know! Even if the tax amount is “0” and is not paid, the obligation to report remains by submitting a 3-NDFL declaration to the tax authority.

NB = Apartment sale amount - Purchase amount - mortgage interest.

To calculate the tax, the total will be taken and 13% will be charged from it. Accordingly, if the total turns out to be zero, then the citizen is exempt from paying tax, but is required to file a zero return.

How to use the benefit?

The tax office must be notified. Having sold real estate that has been owned for less than 3 years, the owner is required to submit a declaration by April 30 of the year following the transaction. If the property was sold during 2023, then you need to report until April 30, 2020. Along with the declaration, an application in the prescribed form for a tax deduction is drawn up.

The declaration is accompanied by a package of documents confirming the sale of the apartment, as well as the purchase, if you want to receive a benefit for the difference.

Minimum housing cost

• Until recently, the tax code did not limit the value of residential real estate sold, and this was taken advantage of by both realtors, who sell it documented at clearly reduced prices, and other dishonest parties to the transaction.
• Since 2017, a procedure has been introduced for determining the minimum price of residential property for sale - it cannot be lower than 70% of the cadastral value of the property, which is established at the beginning of the year of the transaction.
• In the absence of official information about the exact cadastral value of the apartment, such requirements cannot be applied.

When selling an apartment or residential building that has been owned for less than 3 years, you should know that you can take advantage of a tax break in the amount of the costs incurred for the acquisition or construction, as well as interest on the mortgage. All income and expenses from the transaction must be documented. If there are no documents for purchase and construction, the benefit may amount to 1 million rubles.

The benefit for calculating the income tax of an individual who sold an apartment can be applied repeatedly, but in different years and only for one property per year. Simply put, one transaction per year has a benefit.

Now the minimum period for which an apartment must be owned has increased significantly and is 5 years.

Read also : How to get 13% back from buying an apartment?

How to avoid paying tax on the sale of an apartment?

The video tells with examples how to sell real estate within the minimum required period with tips and secrets for reducing taxes.

Tax on apartment sales for pensioners in 2023 - new law

• Many people of retirement age who do not have a permanent place of work and decide to sell some of the real estate they own are wondering: how is the tax on the sale of an apartment for pensioners calculated in 2023, does the new law provide for any benefits for them? or not.
• This issue is important to consider, because for many pensioners, accrued pensions are the only source of income, and often for many, paying additional contributions, including taxes, is a heavy burden.
• Let’s try to figure out how income tax is calculated from the real estate they sell, and whether pensioners pay tax on the sale of an apartment.

Tax subtleties after the sale of an apartment by persons of retirement age

The current tax legislation guarantees no tax assessment for pensioners who own an apartment for the minimum required period; in all other situations, the profit received from the sale of real estate will be taxed at a set interest rate of 13%.

How can taxes be reduced when selling an apartment in 2023, what changes have appeared for pensioners?

1. Period of ownership of an apartment before its sale

The most important point that determines whether a pensioner needs to pay tax when selling an apartment is the minimum period during which the citizen owned this property. According to current legislation, for housing purchased before 2016, this period is 3 years, for apartments purchased since 2016 - five years.

If the minimum period is observed, the pensioner and any other citizen are exempt from making tax payments and filing a 3-NDFL declaration with the tax authority.

From 2023, exceptions for compliance with the minimum period - not 5 years, but 3 years - remain for apartments that the pensioner initially received:

• After registering an inheritance or deed of gift from close relatives.
• Under an annuity agreement with lifetime maintenance of a dependent.
• After privatization of the property in accordance with the established procedure.

2. Taking into account the cadastral value of an object when calculating the amount of future tax

In order to reduce the percentage of transactions with an artificially low cost of an apartment in the contract, a new rule was laid down for calculating the tax on the sale of an apartment by pensioners and other categories of citizens.

Now the tax office will take into account not only the cost of the apartment specified in the purchase and sale agreement. Tax authorities will make their own calculation - they will multiply the cadastral value of the object by a factor of 0.7, and if the amount received is higher than indicated in the tax return, the cost will be calculated based on the result obtained, and not on the one indicated by the citizen.

For example, the cadastral value of an apartment is 2.6 million rubles, and a pensioner sold the apartment for 1.5 million. When calculating the tax payment, the inspector will multiply the cadastral value of 2.7 million by a coefficient of 0.7, resulting in an amount of 1,820,000 rubles, which is slightly higher than what the citizen indicated in the transaction. This means that tax will be charged on the amount of 1,820,000 rubles, and a citizen or buyer may be suspected of implementing a fraudulent scheme.

3. Application of property deduction

If a pensioner is faced with the question of whether he or she must pay tax when selling an apartment in 2023 and how much it will cost if the minimum period of ownership of the property is not met, it is quite possible to use a fixed property deduction to reduce the amount. In 2023 it is still 1 million rubles.

This deduction can only be used once per tax period. If shares of real estate are sold, the deduction is applied in proportion to the shares.

For example , a citizen sells an apartment for 2.5 million, which belongs to him and his wife in equal shares. They must submit a declaration separately, and the deduction will be applied to each of them, but not in the amount of 1 million for each, but in proportion to the shares, if the shares are equal, then 1,000,000/2=500,000 rubles will be deducted from each person’s income when calculating the tax .

4. Accounting for expenses incurred on the object being sold

If a pensioner sells an apartment that has been owned for less than three or five years, he can attach when filling out a tax return the original real estate purchase and sale agreement, a loan agreement, if there was one, invoice receipts and acts for repair and design work.

The amount received in total for all supporting documents is deducted from the income received from the sale of the apartment. The citizen will be required to pay tax on the remaining amount. If the difference is 0 rubles or comes with a minus sign, the tax office will not charge tax payments, but the pensioner is required to document the expenses.

If in the same year a citizen acquires ownership of another apartment, regardless of its cost, area and location, the amount spent on its acquisition can also be deducted from the amount of income received.

Video on taxation of income from the sale of property in 2023:

Important point

A citizen of retirement age must strictly adhere to the deadlines for filing a tax return and paying tax payments:

• Information about the income that the pensioner received after the sale of the apartment is transferred to the tax authority no later than April 30 of the year following the sale of the property.
• The tax payment is made no later than July 15 of the year of filing the declaration.

What is the income tax on the sale of an apartment?

The amount received from the sale of residential property or its share is subject to personal income tax. Income tax is paid by residents - persons permanently staying in the territory of the Russian Federation for more than 183 days during the year and non-residents, homeowners.

The obligation to tax income does not depend on the method of acquiring the property being sold.

In this article we will look at the income tax on the sale of an apartment owned for less than 3 years and more than 3 years, received by inheritance and for pensioners.

Tax base size

The taxable amount of income is determined by the purchase and sale agreement for residential real estate. The rule applies to cases where the specified amount is higher than the cadastral amount, which is equal to the market value of housing. A reduction in the tax base is prohibited by law.

If the contract specifies the value of the item of sale that does not correspond to the market price of the region, the tax base is determined by the cadastral valuation.

The cost of the apartment being sold is calculated with a reduction factor of 0.7. Regional authorities are given the right to reduce the adjustment indicator.

The provision applies to the cost of objects acquired after 2016.

Procedure for paying income tax

Income received from the sale of an apartment by residents is taxed at a rate of 13%. The rate for non-residents is 30%. If there is an agreement between the countries - the Russian Federation and which granted citizenship to the owner of the apartment, the person may be exempt from tax in his own country. An agreement between states allows you to get rid of double taxation.

The legislation does not contain a list of persons exempt from paying tax. Equal responsibilities are available to:

• Citizens of working age.
• Filed from other countries.
• Disabled persons and dependents.
• Non-working pensioners with only pension income
• Minor children.

If the apartment is registered in the name of a child and the guardianship authorities allow the sale of property without infringing on rights, the obligation to pay tax arises on the parents or guardians.

Declaration of income when selling an apartment

Payment of amounts to the budget is made until mid-July of the year following the sale period. If the property does not fall under the non-taxable (preferential) category, the amount of income received must be reported to the Federal Tax Service by filing a 3-NDFL declaration.

Reporting is submitted after the year of receipt of income no later than the last day of April. The form is designed to confirm income received, benefits used and the amount of tax.

You begin filling out the report form from the calculation sheets located at the end of the declaration.

Declaration feature:

• The tax amount is calculated independently. If an error is detected, corrected data may be submitted. If the tax was underestimated, you will need to additionally pay the arrears and penalties and then submit a return.
• The reporting form that is current in the period is used as part of the sheets intended for declaration.
• When selling an apartment in 2016 that has been owned for more than 3 years, no declaration is made in 2017 .
• If, after declaring the benefit, the amount of tax payable is zero and the period of ownership is less than 3 years, the declaration is made on a general basis .

When selling an apartment after the expiration of the 3-year ownership period, there is no need to submit a declaration and supporting documents. At the same time, the person does not notify the Federal Tax Service about the absence of debt to the budget.

Providing a tax benefit depending on the period of ownership

When determining tax payment obligations, an important indicator is the period of ownership of the property. Current legislation determines the possibility of applying a tax benefit when selling an apartment owned for more than a certain number of years. The benefit is expressed in the absence of the obligation to pay tax.

Year of purchase of the apartment	Period of ownership	Obligation to pay tax
Until 2016	More than 3 years	Not available
Less than 3 years	Arises
After 01/01/2016	More than 5 years	Not available
Less than 5 years	Arises

The procedure for applying the benefit has been changed since 2016 and applies to transactions carried out after the specified period. Previously, the tax abolition benefit applied to all residential property owned for more than 3 years. The changes affected apartments, shares and other housing purchased under sales and purchase agreements and their varieties, for example, exchange agreements.

Calculation of the period for applying the benefit

The period of ownership of an apartment is calculated from the registration date indicated in the Certificate (currently in the extract from the Register). The date means the receipt of ownership rights upon purchase, receipt or privatization of housing. The period of ownership of property that has undergone redevelopment without external changes (for example, annexation) is also determined from the day the apartment was purchased.

Example #1. Citizen Smirnov K. purchased an apartment, the registration of the right to which was made in December 2015. In January 2016, the owner made a redevelopment and received a new cadastral passport.

Based on the document, an entry was made in the register changing the area. The tax-free period will be calculated from December 2015 and determined after 3 years.

If the owner of the apartment received a new certificate (extract) after redevelopment, the calculation is made based on the date of entry into ownership.

The period of ownership of an apartment purchased in a new building is determined from the date of receipt of the property from the developer, confirmed by the act.

Situations for which the previous taxation procedure has been retained

The minimum period of ownership has been retained for a number of cases. The provision applies to the sale of property acquired in ownership since 2016. Sale without taxation after the expiration of the three-year period of ownership of the apartment remains for the following situations:

• Receiving property by right of inheritance.
• Transfer under a gift agreement drawn up from close relatives.
• Receipts under a lifelong maintenance agreement.
• After privatization.

There is a peculiarity in calculating the period of ownership of an apartment when inheriting housing. The right to property arises not on the day of registration of property, but on the day of opening of the inheritance. If the date of death of the testator is determined by a court decision, the right to inheritance arises from the day specified in the document.

The procedure for determining the period depends on the grounds for receiving the property.

Reason for receipt	Beginning of the tenure period
Contract of sale	Date of entry into the register
Barter agreement
Donation agreement
Inheritance	Date of opening of inheritance
Joining a cooperative	Date of payment of the last share amount

Example #2. The Sidorov spouses have owned an apartment since 2004, registered in equal shares. In 2015, the husband transferred his share to his wife based on a gift agreement. In 2016, Sidorova, who owns 100% of the shares, sold the apartment. Since the portion received from the spouse is transferred as a gift, no tax liability arises.

Tax reduction by applying property deduction

The amount of tax declared by the seller of the apartment can be reduced by a property deduction. The possibility of obtaining a deduction arises after contacting the Federal Tax Service. You have the right to choose one of 2 types of benefits:

• A deduction using a benefit amount limited by law in the amount of 1 million rubles. For example, if an apartment is sold for 3.5 million rubles, 2.5 million rubles must be taxed after applying the benefit.
• Deduction in the amount of expenses incurred. The benefit takes into account the purchase amount, mortgage costs and other expenses that form the cost of the apartment. Costs are supported by documents - copies of forms if the originals are available, presented at the request of the inspector.

The list of supporting documents is individual in each case and is regulated, if necessary, by the inspector. At the same time, there is a general list of forms confirming the right to benefits.

Purpose of documentary forms	Document
Identification	Passport of the owner and other persons, if necessary
Confirmation of ownership	Sales and purchase agreements, exchanges, transfer deeds and other forms
Making a payment	Checks, receipts, receipts, other forms of payment
Construction costs for current repairs	Invoices, orders, contracts, acts
Forms of mortgage lending	Agreement, additional agreements, account statements

Both benefits for the same property are not provided at the same time.

The taxpayer chooses the most profitable option or benefit in a fixed amount in the absence of documents to confirm the costs.

The benefit is not provided for the sale of real estate previously received through inheritance or privatization. The refusal to deduct is based on the absence of expenses incurred by a person when purchasing real estate.

Sanctions for evading obligations

It is not possible to avoid taxation. Electronic data exchange has been established between cadastre structures and tax inspectorates.

If obligations are ignored, the individual (income recipient) will have to pay tax, penalties and fines. For example, if the tax is erroneously understated, the fine will be 20% of the arrears.

Sanctions are applied both in case of non-payment and in cases of failure to submit a declaration within the period established by law.

5 current questions and answers about income tax when selling an apartment

The main question that arises when selling an apartment is aimed at reducing the amount of income tax liabilities. List of the most frequently asked questions:

Question No. 1. After the sale of the share in the apartment, the need to pay tax arose. What amount of deduction can be applied in the absence of documents confirming expenses?

If the shared ownership was sold under a separate agreement, the owner has the right to apply the benefit of 1 million rubles in full. When selling an apartment under a single agreement for the object, the amount of the benefit is distributed among the owners.

Question No. 2. The sale of the apartment and the purchase of new housing were carried out in the same period. Is it possible to indicate both transactions in one declaration and claim 2 deductions?

A person has the right to apply property deductions when selling and buying an apartment. The types of benefits are not related to each other and are applied separately. If both types of deductions relate to the same tax period, the person has the right to simultaneously apply deductions indicating the data in one declaration.

Question No. 3. I am an individual entrepreneur. Having owned an apartment for 2 years, I plan to sell the property. How will taxation be done?

Property owned by an individual entrepreneur is also subject to tax upon sale.

If the entrepreneur does not use the apartment to generate income, taxation is carried out in accordance with the general procedure. Otherwise, the tax is paid depending on the tax system used by the individual entrepreneur.

Question No. 4. What sanctions can be applied if a person refuses to provide a deduction for the amount of expenses incurred when purchasing an apartment?

It is possible to use the second type of benefit - a deduction in the amount of 1 million rubles. It is necessary to submit an updated declaration, having previously paid the arrears and penalties. A fine in the amount of 20% of the arrears may be assessed by the inspector depending on the period of delay and interpretation of the situation.

Question No. 5. Is it possible to reduce the tax rate by specifying in the contract a reduced amount for the sale of an apartment?

Schemes in which tax is deliberately understated can cause trouble for the seller. If the contract is terminated by the buyer, a refund is made in the amount established in the document. The risk is not justified and has no basis in the form of special necessity.

Important nuances: how to sell an apartment owned for less than 3 (5) years? When can you not pay tax?

For individuals in the Russian Federation, income tax is set at 13%. Selling an apartment is also a way to generate income. However, in this case there are exceptions.

If the period of ownership of the property is longer than a certain period, the seller is exempt from tax. Let's figure out what this period is and how taxation occurs in the Russian Federation when buying and selling an apartment.

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When is the minimum period of ownership of residential space more than 3 years?

1. When purchasing a home before January 1, 2016, the rules that were adopted at that time apply.

   Was it necessary to pay sales tax if the apartment was owned for more than 3 years? In this case, the citizen was exempt from this tax.

   When purchasing a home after January 1, 2016, the situation has changed. A minimum period of 3 years became possible only as an exception. What are these cases:

   • The property was inherited from a close relative.
   • The property was received as a gift from a close relative.

   Is it necessary to pay sales tax in the listed cases? Is residential space donated by a close relative subject to tax if the period of ownership of the apartment is less than 3 years? Yes, in such a situation it is impossible to avoid paying the Federal Tax Service.

   Both rules apply only to close relatives (who are so named by law), and not to relatives in general.

   Article 14 of the RF IC classifies as close relatives parents, children, grandparents, grandchildren, brothers and sisters (those who have both common parents or only one). Point 18.

   1 of Article 217 of the Tax Code of the Russian Federation refers to this article. In addition, he considers adoptive parents and adopted children to be close relatives.

   The answer to the question “do I have to pay for the sale of an apartment inherited from an uncle if the period of ownership is more than 5 years” is no, but if it is less than 3 years, then the tax is paid.

2. Housing was privatized.
3. The housing was obtained under a lifelong maintenance agreement with dependents.

In what cases is it more than 5 years?

Federal Law No. 382-FZ came into force on January 1, 2016. The period of ownership of an apartment for sale without paying tax has become 5 years. This is how it is installed if:

• The property was purchased after January 1, 2016.
• The method of obtaining real estate does not fall within the above exceptions.

Reference! In general, the period of ownership of real estate is calculated from the date of registration in the Unified State Register of Real Estate. When receiving housing as an inheritance, the period of ownership is considered from the date of death of the testator. For members of the cooperative, the period is counted from the day the last share is paid or the apartment acceptance certificate is signed.

1. The income tax for residents of the Russian Federation is set at 13%, for non-residents - 30% (more details about the tax on the purchase and sale of housing for non-residents can be found here).
2. To ensure that citizens do not evade paying taxes by indicating in the contract a price lower than in reality, the minimum amount from which the tax base is calculated was accepted as 70% of the cadastral value of the apartment.

   If the price in the contract is greater than this value, tax is taken from it.

3. When selling real estate that has been owned for more than a minimum period, its owner is also exempt from filling out a tax return.
4. In case of joint ownership of housing, the tax upon sale is divided proportionally. Each owner fills out his own declaration.
5. Regional authorities may reduce the minimum period of ownership of an apartment, which allows you to avoid paying taxes.

The tax is taken from the tax base, i.e. from the income that the seller received from the sale of his property. Initially, this is the price that is included in the purchase and sale agreement. The tax base can be reduced using deductions.

Read our article about how tax is calculated when selling an apartment and its share.

Property deduction

1,000,000 rubles are deducted from the current tax base. This deduction can be used only once a year. When selling a second apartment in the same tax period, this deduction no longer applies.

Example 1.

Andrey inherited the apartment. After 2 years, he sold it at a price of 2,400,000 rubles. He was the owner for less than 3 years, therefore he is not exempt from paying tax. Andrey can take advantage of the property deduction.

• 2,400,000 – 1,000,000 = 1,400,000 (the new tax base from which the tax will be taken).
• 1,400,000 * 0.13 = 182,000 (the amount that Andrey must pay).

The difference between the amount for which a property was sold and the cost of buying a new one

Example 2.

Olga bought an apartment in 2017 for 2,200,000 rubles. Then in 2018 she sold it for 2,400,000 rubles. The period of ownership of the apartment is less than the minimum, therefore, Olga must pay tax. Olga took advantage of the deduction.

• 2,400,000 – 2,200,000 = 200,000 (new tax base for Olga).
• 200,000 * 0.13 = 26,000 (the amount Olga must pay).

Important! Of these two deductions, only one can be used. Those. you should choose which one is more appropriate.

Example 3.

In 2017, Anna sold her apartment, which she received as a gift in 2015, for 2,300,000 rubles. In the same year, she bought herself a home for 1,900,000 rubles. Anna took advantage of the property deduction.

• 2,300,000 – 1,000,000 = 1,300,000 (Anna’s tax base).
• 1,300,000 * 0.13 = 169,000 (Anna's tax before the tax deduction for the purchase of a home).
• 1,900,000 * 0.13 = 247,000 (tax deduction that Anna can claim for the purchase of housing).
• 169,000 – 247,000 = (-78,000) (Anna's new tax).

Thus, Anna not only does not pay tax on the sale of housing, but also has the right to a deduction in the amount of 78,000 rubles.

More information about tax deductions for the purchase and sale of an apartment can be found here.

Let's figure out how to sell an apartment owned for less than 3 (5) years and not pay tax. This is possible if:

1. The property was sold for less than it was purchased (or at the same price). However, this amount must be more than 70% of its cadastral value.
2. The property costs less than a million.

Now you know how to sell an apartment that has been owned for less than five or three years without paying tax.

Features of filling out the declaration

Filling out the document for an apartment less than 3 years old and less than 5 years old in ownership is similar. What is to be filled out in the tax return:

1. Front page.
2. Section 1 and 2. The taxpayer calculates the tax base and the total tax amount.
3. Sheet A is a reflection of income from the sale of an apartment. The source of income is the buyer of the apartment. The income code in line 020 is set to 01 if it is determined from the contract value.
4. Sheet D2 – calculation of tax deductions. There are points there for selling a share of an apartment.

More details about filling out a declaration after buying or selling an apartment can be found here.

Attention! The declaration must be submitted by April 30 of the year following the year in which the apartment was sold. The tax (if any) is paid by July 15 of the same year.

Thus, if the apartment was owned for more than a minimum period, the citizen is exempt from tax and does not submit a declaration. If the period was shorter, then you can take advantage of various deductions that will significantly reduce the tax or eliminate it altogether. However, even if the tax is zero, the seller must still file a tax return.

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