Deduction for mortgage interest on two apartments: what the Ministry of Finance said

Is it possible to issue a personal income tax refund a second time?

Article 220 of the Tax Code of the Russian Federation establishes the right of citizens to reduce their tax expenses through deductions. There is also a tax deduction when purchasing an apartment or house.

It is aimed at supporting Russians who have made expensive real estate transactions. Using a deduction, you can return income tax (up to 13%) from the cost of a residential property; the maximum amount of such a deduction is 2 million rubles.

The right to a property deduction for the second time is granted to citizens if:

The right to a tax deduction (TD) was not used.
Work according to the work book.
Non-participation in government assistance programs for purchasing a home.
Purchasing an apartment not from a close relative.
Having Russian citizenship.

How many times can you get a tax deduction when buying an apartment? Paragraph 3 of Article 220 of the Tax Code of the Russian Federation states that a property deduction can be provided more than once . It is noteworthy that this amendment was introduced into the legislative act in 2014 and is valid for apartments acquired in ownership after January 1, 2014.

If the property for which a citizen wants to receive an IC was registered in his ownership before January 1, 2014, the IC is applied according to the old rules - and only once in the citizen’s life.

Is it possible to legally get compensation a second time? According to paragraph 27 of subparagraph 2 of paragraph 1 of Article 220 of the Tax Code of the Russian Federation as amended until January 1, 2014, a citizen who received only partial compensation - less than 13 percent of the maximum amount (2,000,000 x 13% = 260,000 rubles) does not have the right receive an additional deduction. Whether a citizen will be able to issue a personal income tax refund a second time, the question of the date of purchase of housing for which the benefit was previously applied becomes a fundamental question.

What is a tax deduction

Before we figure out whether it is always possible to get a tax deduction the second time when buying a second apartment, let us remind you that a deduction is an expense that reduces the tax base . In the case of an individual, the taxable base is his official income, taxed at 13% personal income tax (). Usually this is a salary.

Having received a tax deduction of 1 million, we are exempt from paying 130 thousand to the budget. The right to a tax deduction of 2 million allows you to return 260 thousand in your hands, and of 3 million – 390 thousand.

Conditions

The version of the Tax Code in force from January 2014 to this day provides for the possibility of multiple deductions when purchasing housing. The NV, recorded in subparagraph 3 of paragraph 1 of Article 220 of the Tax Code, is provided more than once. Reasons for receiving a tax deduction :

All objects for which the applicant wants to receive compensation were purchased and registered in Rosreestr under the new owner after January 2014.
The payer used NV less than its maximum amount - in this case, the balance can be taken into account when receiving a property deduction for new housing.

The maximum amount of property tax deduction is equal to the amount in force in the reporting period in which the taxpayer first acquired the right to receive a property tax deduction.

It is the balance formed at that moment that is transferred to the citizen’s next NV when purchasing a home.

What factors play a role in receiving benefits?

Due to the fact that changes were made to the procedure for obtaining benefits at the legislative level, a little legal confusion arose. To clarify this issue, we offer you two illustrative situations, using examples of which you can understand what factors play a role when receiving a deduction once or repeatedly.

Is it possible to receive additional payment by using it earlier for housing purchased before January 1, 2014?

Example for housing purchased before January 1, 2014:

A Russian citizen took advantage of the compensation when purchasing an apartment in 2013. He purchased housing for 500,000 rubles, and with the help of NV he returned 65,000 rubles of personal income tax paid.

Since the maximum NV allows you to receive 260,000 rubles, the Russian wanted to use the Tax Deduction when purchasing a second apartment in 2020, when the new rules were already in effect.

Will he be able to do it? It's worth paying attention to the two factors we mentioned above: Was the deduction used in full? If not, when did the individual receive part of it?

The situation of our citizen fits the description - in 2013 he was not able to receive the maximum amount, only 65,000 rubles. However, the transaction was carried out in 2013, during the validity of the law, which allows you to receive a deduction only once in your life.

A citizen will not be able to receive an additional deduction when purchasing another apartment if he received the deduction for the first time before January 1, 2014. All transactions during this period are subject to the legislation of the Russian Federation in force at that time.

After this date

Can I use the benefit twice after this date? Since 2014, more flexible tax refund rules have been in effect for citizens when purchasing an apartment - they can be used a second time, the only limitation being the maximum amount of tax return.

Example of calculation for housing purchased after January 1, 2014:

Suppose in 2020 a citizen received a deduction for an apartment purchased in Moscow for 1 million rubles in the amount of 130,000 rubles. In 2018, he buys another property and decides to receive an additional tax deduction for the remaining 1 million (another 130,000 rubles).

Do such citizens receive the right again? Yes, since in 2015 a new edition of the Tax Code was already in force - it removed the restriction on the one-time use of non-resident income.

Second apartment - what is the maximum deduction

To find out how much tax deduction you can get for a second apartment:

Subtract the cost of the first home for which you filed a declaration from 2 million.
Compare the result with the cost of the second apartment.
The smaller of the two figures is the tax deduction for the apartment for the second time of registration.

In most cases, two apartments are enough to completely exhaust the 2 million limit.

How to find out the remaining tax deduction when buying an apartment for the second time? It is enough to add the unused deduction from the first apartment with the deduction from the second.

If an apartment is purchased with a mortgage, and you have not previously claimed interest as a deduction, then you can additionally present up to 3 million in expenses paid to repay interest on the loan.

The legislator may revise the limit amounts. The applicant is subject to the limit that was relevant during the initial application minus the deduction.

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Does a child lose his right if a parent has already received a NV for him?

Since 2014, another rule has been in force in the Russian Federation - parents and guardians can use their children’s income tax if they acquire property in their ownership , paragraph 6 of Article 220 of the Tax Code.

So, for example, a parent who buys real estate as shared ownership for himself and a child can use the NV in full.

Despite the fact that only ½ of the apartment will be registered for the child, the size of his NV will be the standard 2 million rubles.

The same conditions for receiving a deduction apply to transactions in which parents register an apartment solely for the child or, while married, for common ownership.

Since a deduction for expenses can be received one time or no more than two million rubles throughout life, parents often have a question: does the child lose his right to NV after his guardians use the option? Answer: no, an imperfect child does not lose such a right, since NV is granted to the parents, and not to the child himself. This position was supported by the Ministry of Finance of Russia; the mechanism is discussed in the letter of the financial department dated September 3, 2020 N 03-04-05/50743, the letter of the financial department dated August 29, 2014 N 03-04-05/43425 and some others.

Procedure and methods of obtaining

The traditional way is to visit the tax office in person. Over the past few years, users have been actively switching to remote service through their personal tax office account.

You can gain access by visiting the Federal Tax Service with your passport and taking your login/password. Do not confuse with government services and MFC! It's not the same thing!

Your personal account has an intuitive menu that allows you to fill out declarations online and sign them with an enhanced electronic signature. You can apply for it for free, without leaving your couch.

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The basis for the return is the 3-NDFL declaration. If you submit it only to receive a deduction, then you can do this throughout the entire year following the reporting year. has a section that allows you to report on income received without the participation of other tax agents (for example, for renting out the same apartment). Income must be reported within the time limits established by law.

3-NDFL is filled out independently using the program on the Federal Tax Service website or at a firm providing accounting/legal services.

Online

Scanned documents confirming expenses for deduction are attached to the declaration completed through your personal account. After this, you need to click the send button. You can track the progress of the verification on the website. When it is completed, submit a return application. To do this, select the appropriate menu button and indicate in the application the bank account details for depositing money.

Personally

Take 3-NDFL on paper to the Federal Tax Service in 2 copies. Submit copies of supporting documents. On one copy of the declaration you will be given a mark indicating receipt of the documents. The method of informing you about the progress of the inspection will be agreed upon.

In practice, often the taxpayer, after 3 months allotted for the audit, calls himself and finds out the result. When the verification is successfully completed, you need to submit a return application. Visit the department and fill out the appropriate form. If by this time you have a personal account, this can be done remotely. Have your bank account details ready.

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Tax deduction for mortgage interest

Is compensation provided if real estate is purchased with a mortgage?

Is it possible to get a credit tax refund if you have already received a property tax? If housing is purchased with a mortgage, then in addition to the main deduction, the citizen receives the right to return money from the paid loan interest. With a mortgage, a refund of 13% of the transferred interest is possible . Note that this NV does not include the principal debt, however, an additional deduction arises along with the property debt.

A citizen can only apply for return of interest that has already been transferred to the bank - further calendar payments are not taken into account.

This formulation motivates Russians to apply for interest relief not immediately, but after several years, when the amount of interest paid increases, and with it the amount of compensation increases.

It happens that citizens, due to ignorance of their rights or for other reasons, do not use the additional IC on interest, but receive the main deduction. A natural question arises: is it possible to apply for a tax refund on interest later? The decision by the authorities was not made immediately, the controlling structures argued for a long time, but the letter of the Federal Tax Service dated May 21, 2015, mandatory for use by the tax authorities, put an end to this matter.

Does it make sense to apply twice? By using NV before January 1, 2014, you can receive compensation according to standard rules .

The only difference in the process of obtaining a deduction depending on the date is the presence of a maximum compensation threshold (applied to transactions concluded in 2014 and later) and its absence (for loan agreements signed before 2014).

When can't I return it again?

The procedure for applying the deduction is determined by the year in which the right to receive the benefit arose. Until 2014, the version of the code was in force, according to which, regardless of the amount of compensation, 13 percent are returned only once when purchasing an apartment.

If a citizen received a deduction before 2014, he will not be able to apply for additional receipt of NV . The remaining funds will be burned. The opportunity to submit documents several times until the maximum benefit amount of 260,000 rubles is reached is available to people who spent money on purchasing apartments after January 1, 2014, when the new version of the law came into force.

As you can see, these days in Russia, a property deduction when purchasing an apartment can be provided more than once. Unfortunately, citizens who previously at least partially used the NV when purchasing an apartment before 2014 lose the right to receive additional compensation. For transactions after 2014, there is a rule that allows you to use a deduction until the maximum limit of 260,000 rubles is completely exhausted.