When should I submit a declaration? How to do it? How can you reduce your tax amount? Tax consultant Natalya Penkova helped us answer these questions. Together with her, we will calculate the tax, take into account the nuances and fill out the tax return.

When selling real estate (apartment, house, garage, land), the former owner is required to pay income tax (NDFL) if the property is owned for less than the minimum period of ownership. As a general rule, it is five years. After this period, the citizen must neither pay tax on the sale of real estate nor file a tax return. But if you sell the property earlier, you will need to pay personal income tax.

FOR REFERENCE

Personal income tax, or personal income tax, is one of the main taxes paid to the budget by Russians and foreigners who receive income in the Russian Federation. The tax rate for Russian citizens in most cases is 13%.

But there are other situations:

• 9% will need to be paid to the state from income on mortgage bonds issued before 01/01/2007.
• 15% will have to be paid by those Russians whose income exceeds 5 million rubles per year. The same tax is charged to non-residents for idends from Russian companies.
• 30% will be taken from any other income of non-residents, including from the sale of an apartment.
• 35% is the amount of tax on winnings in lotteries and competitions (over 4 thousand rubles), as well as on profits from deposits in credit consumer cooperatives.

So, when selling an apartment by a tax resident of the Russian Federation, the tax rate is 13% of the amount specified in the sales contract, and in the case of a non-resident – 30%. Typically, the period of ownership of an object is counted from the moment of state registration of real estate in the Unified State Register of Real Estate.

However, there are exceptions to every rule. Next, we’ll tell you when you don’t need to pay personal income tax, for whom benefits and deductions are provided, when the return should be submitted, how to fill it out correctly and how to reduce the amount of tax.

Three, not five: when tenure decreases

If the property was received as a gift from a close relative, inherited, transferred under a lifelong maintenance agreement with dependents, was privatized, or is the seller’s only home, then the minimum tenure is reduced to three years (Clause 3 of Article 217.1 of the Tax Code of the Russian Federation).

Also, in some cases, families with children are exempt from the need to wait for the minimum period of ownership to expire, which we will discuss below.

Which housing is recognized as the only one?

If at the time of sale a citizen owns only one residential premises, then it is recognized as the only one. It is important that this can be not only an apartment, but also a communal apartment, a room, a house, or even a share in the property.

IMPORTANT

Apartments do not fall under this definition, since they do not have the status of residential premises.

Thus, if a citizen owns an apartment and a room, then when selling, for example, an apartment, he will have to pay tax, since it is not the only property. But there are exceptions here: if the second property was purchased a maximum of 90 days before the sale of the first, you will not have to pay tax.

EXAMPLE

Sergey bought the apartment in September 2019 and sold it in October 2022, when the three years of the minimum ownership period had already passed. But even before the sale, in September 2022, he bought a house where he plans to move.

In this case, there is no need to pay tax on the sale of an apartment, since the sold property was still considered the only one according to the “90-day rule”.

It is important that the period of 90 days between the purchase and sale of an apartment is calculated not from the dates on which the purchase and sale agreement was concluded, payment was made, or an act of acceptance and transfer of the object was drawn up, but according to the date of registration of the transaction in Rosreestr.

The only home jointly owned by spouses

If housing is jointly owned by spouses, then when determining the only housing, real estate that is in the personal ownership of each of them is not taken into account.

Real estate is not jointly owned if:

• acquired before marriage;
• received by inheritance, as a gift or after privatization (regardless of whether this happened before or after marriage).

EXAMPLE

In December 2022, the couple decided to sell the apartment acquired during marriage in September 2019. At the same time, the wife also owns a room purchased before marriage.

In this case, the spouses will not need to pay tax on the sale of the apartment, since the jointly acquired property is the only one, and the period of ownership has already exceeded three years.

Two or more children – no tax

From 2021, families with two or more children do not pay tax on the sale of real estate, but for this the following conditions must be met at the same time:

1. The family must have two or more children under 18 years of age (24 years if the child is a full-time student). Adopted children are also taken into account.
2. To replace the sold property, it is necessary to purchase another one within the same year in which the transaction occurred, or before April 30 of the following year.
3. New housing must be larger in area or its cadastral value must be higher.
4. The cadastral value of the sold housing should not exceed 50 million rubles.
5. At the time of the transaction, the seller and his family members should not own in total more than 50% of other housing, the total area of ​​which is larger than that of the purchased one.

If all these conditions are met, a family with children does not need to comply with a minimum period of ownership of real estate and no period at all. That is, you can buy real estate today, sell it in a week, and there will be no tax.

Benefits for shareholders

From 2020, when selling a new building, the minimum tenure period is counted from the date of full payment of the DDU. It doesn’t matter whether you paid for additional meters when accepting housing or not. From then on, three or five years should be counted not as before, from the date of registration of property rights, but after full payment under the contract.

The innovation applies to apartments purchased under contracts:

• equity participation (DDU);
• assignment of the right to claim under the DDU;
• participation in a housing construction cooperative.

This usually happens on the day of the transaction or within several months (if installments are provided). In the latter case, the full settlement period is counted from the last payment, and not from the first. The changes apply to transactions carried out since 2019.

IMPORTANT

1. If a citizen already owns a share in a real estate property and he acquires another share in it or the same object becomes his full property, then the minimum period of ownership for him is calculated from the moment of acquisition of the first share.

2. If you:

a) sold the apartment in 2019, before amendments were made to the law,

b) paid the tax,

c) at that time owned the apartment longer than the minimum period according to the new rules of reference, –

you have the right to contact the tax office and get your money back.

Sale of an apartment received as a result of renovation

For apartments received by Moscow residents under the renovation program, the minimum period of ownership includes the time during which the owner owned the apartment in the old building.

For example, an apartment in a building that was undergoing renovation was purchased in 2014, and in November 2022 the owner received a new home and sold it a month later. In this case, the tenure period will be counted from 2014 and will be eight years. Thus, you will not have to pay personal income tax for a new apartment.

IMPORTANT

From 2022, when selling real estate before the minimum period of ownership, there is no need to submit a tax return if the transaction value does not exceed 1 million rubles, i.e. the size of the standard tax deduction.

In this case, the income is covered by the deduction, personal income tax is not charged, and there is no need for a declaration. For movable property and non-residential premises, the cost of sale without filing a declaration should not exceed the amount of 250 thousand rubles.

Do I need to submit a declaration if the minimum period of ownership has already expired?

If the property has been owned for more than the minimum period of ownership, there is no requirement to file a tax return after it is sold. But when the seller takes advantage of a benefit, such as a three-year ownership period, the tax office does not automatically see that the property is eligible for the benefit and calculates the tax as if it were not there. In addition, a fine may be charged for failure to submit a return on time.

In this case, the former owner is recommended to send an explanation to the Federal Tax Service before the deadline for filing the declaration, attach documents confirming the benefit and wait for confirmation that the data has been accepted. It’s better to take these steps early rather than fight claims and fines later.

Details about what to do if you have been charged extra taxes or calculated them incorrectly

When should the declaration be submitted?

If the object does not fall under any of the exemption conditions, you will have to pay tax and fill out a tax return in Form 3-NDFL.

The declaration is submitted by April 30 of the following year, and the tax is paid by July 15. For example, if an apartment was sold in 2023, then a declaration must be submitted by April 30, 2024, and the accrued tax must be paid by July 15, 2024.

How to calculate the tax amount and reduce the tax base

Let us remind you that for tax residents of the Russian Federation the tax amount is 13% of the amount specified in the purchase and sale agreement, for non-residents – 30%.

Then, when a resident sells an apartment for 3 million rubles, the personal income tax will be 3 million × 0.13 = 390 thousand rubles.

To reduce the tax base (in this case, the cost of the object), you can use two options:

1. Take advantage of the tax deduction (clause 2.1 of Article 220 of the Tax Code of the Russian Federation). It allows you to reduce the amount on which tax is paid by 1 million rubles when selling an apartment, room, share, house, land plot or by 250 thousand rubles when selling non-residential premises or a garage.

EXAMPLE

Sergei inherited the apartment and immediately sold it for 4 million rubles. He will be able to pay 13% personal income tax not on the full amount, but only on 3 million rubles, if he attaches an application for a deduction to his tax return.

2. Take into account the costs of the purchase and reduce the tax base at their expense. You can use this method if the apartment was purchased and not received as a gift or inheritance.

EXAMPLE

Ivan bought an apartment for 3 million rubles, and two years later sold it for 4 million. When filing a tax return, he attached documents confirming the fact of purchase, which allowed him to reduce the tax base from 4 to 1 million rubles and reduce the tax from 520 thousand to 130 thousand rubles.

That is, the tax in this option is actually charged only on the profit received from resale.

We know what you’re thinking right now! However, it is impossible to take advantage of two types of benefits at the same time, that is, to take into account the purchase costs and apply a tax deduction. You should calculate everything in advance and decide which benefit is more profitable to use, and also check the availability of supporting documents.

When selling two or more residential properties by one owner within one calendar year, the deduction limit of 1 million rubles applies in total for both properties, and not for each separately.

In some cases, you can also add to the purchase price the costs of finishing (and drawing up a finishing project) of housing, if it was carried out immediately after its acquisition (clause 3.3 of Article 220 of the Tax Code of the Russian Federation for private houses, clause 3.4 for apartments).

When selling a private house, it must be taken into account that the period of ownership is calculated from the moment the title documents are drawn up, that is, when the housing is built and registered, and not when construction begins.

IMPORTANT

If a land plot is sold together with an unfinished building, then such a house does not belong to residential properties and a deduction of 1 million rubles is not applied to it, but the owner can take advantage of a deduction of 250 thousand rubles.

It should also be taken into account that when selling two objects in one calendar year, it is not allowed for the owner to use a deduction of 1 million rubles for one of them, and confirmed expenses for the other.

To select the most optimal option, it is convenient to use an online calculator .

Tax deduction for real estate: what, to whom and how much is due

We take into account the cadastral value

When selling a home, you should clarify its cadastral value – this parameter affects the amount of tax.

If the cadastral value, for example, of an apartment is higher than the one for which the housing was sold, personal income tax is calculated according to the cadastre using a reduction factor. Most often it is 0.7.

EXAMPLE

The apartment was sold for 2 million rubles, and its cadastral value at the beginning of the year was 2.8 million rubles.

1. The amount on which you will have to pay tax: 2,800,000 × 0.7 = 1,960,000 rubles.
2. When calculating tax according to the cadastre, a citizen also has the right to use a tax deduction of 1 million rubles: 1,960,000 – 1,000,000 = 960,000 rubles.
3. The tax amount will be: 960,000 × 0.13=124,800 rubles.

The cadastral value is taken to be the value established by Rosreestr on January 1 of the year in which the transaction took place.

You can clarify the cadastral value of an object using an extract from the Unified State Register or in your personal account on the Rosreestr website, in the “Reference information on real estate” section:

To receive data, you need to indicate the address or cadastral number of the object. To obtain data, you need to indicate the address or cadastral number of the object.

We fill out the declaration and do not forget about supporting documents

The most convenient way to submit a tax return is through the taxpayer’s personal account: section “Income and Deductions” → Submit a declaration → Submit a 3-NDFL declaration. Then you can either fill it out online directly on the website, or attach a ready-made version filled out in a special program. Both of these options include automatic tax calculation and error checking.

IMPORTANT

To send documents to the Federal Tax Service through your personal account, you need to create an electronic signature and wait for confirmation of its release. This is done in your personal account, in the Profile Settings → Electronic signature section. Release usually takes up to 24 hours.

You can also submit a declaration in paper form by contacting the territorial tax authority or MFC. The form can be downloaded from the Federal Tax Service website and filled out by hand in capital block letters.

The personal income tax return includes a cover page and 15 pages. Not everything needs to be filled out; the composition of the prepared report depends on the reason for filing 3-NDFL with the tax authority.

In particular, when selling an apartment the following must be filled out:

1. Title page:

2. Section 1 – the amount of tax payable (or its zero value):

3. Section 2 – calculation of the tax base and tax:

4. Appendix 1 – the income received from the sale of housing is recorded:

5. Appendix 6 – information about the selected property deduction:

6. Calculation to Appendix 1 – the calculation of income from the purchase and sale transaction is provided:

When filling out a declaration using automated means, you need to:

1. Select the year in which the income was received, indicate information about the version of the declaration (initial or adjustment) and information about the presence of tax residency in the Russian Federation – owners who stay in the country for at least 183 days within one year become residents.

Fill out information about the declarant (when filling out online, this information and income data are loaded automatically; if necessary, the information can be supplemented).

2. Enter information about income. All sources of income have a specific code designation, for example, income from the sale of residential real estate (code 1510), income from the sale of other property (code 1512), wages (code 2000), etc.

Also at this stage, you must correctly indicate the organization or inidual from whom the income was received. In particular, when selling an apartment – the buyer’s full name or the name of the legal entity.

IMPORTANT

You should enter information about all income received during the year – for example, salaries from all places of work, income from the sale of real estate, from renting out an apartment.

Documents confirming income will need to be attached to the declaration (2-NDFL certificate, lease agreement, checks, receipts for receipt of money, etc.).

3. Select tax deduction options. In the case of the sale of real estate – a property tax deduction or a reduction in the tax base by taking into account the costs of the purchase.

4. Attach documents confirming your application. For example, a purchase and sale agreement; a receipt or bank statement confirming the money transfer; extract from the Unified State Register of Real Estate; other documents confirming the fact of purchase of the apartment being sold or the right to other benefits that allow you to reduce the amount of tax.

5. Check the completed data, sign the declaration with an electronic signature and send it to the Federal Tax Service.

6. After checking the documents, the Federal Tax Service will assess tax, which can be paid through the taxpayer’s personal account or through any bank.

What happens if you don’t pay tax?

The penalty for failure to submit a return on time will be 5% of the amount of tax that must be paid for each month of delay.

In this case, the penalty cannot be:

• more than 30% of the tax amount;
• less than 1000 rubles.

If you filed the return correctly and on time, but did not pay the tax within the specified period, then penalties will be charged on the debt, but there will be no fine.

Let us remind you that the declaration for payment of taxes on the sale of property is submitted until April 30 of the year following the year of receipt of income, and the deadline for paying personal income tax is until July 15.

Property tax: who should pay, how much and when