When can you return 13 percent of your mortgage? For which purchases is a personal income tax refund issued? Which method is more beneficial to the payer?

The topic of obtaining a property deduction is extensive, but one of the most popular issues in it is the return of 13 percent on mortgage interest.

The reality is that buying an apartment on your own is often impossible; you have to resort to the help of banks, so it’s worth considering the specifics of this situation.

And in this article we will find out:

• what is a mortgage tax deduction;
• what amount and how many times can be returned;
• what documents will be required.

A property tax deduction can be obtained if you are lucky enough to purchase a house or apartment (finished or under construction), as well as a plot for a house. But this is not enough.

The main condition is that the new resident must pay personal income tax at a rate of 13% to the budget - it is from these taxes that the procedure for processing a refund is based. More details about how the personal income tax amount for a refund is formed are explained in.

Determining the amount to be refunded if you pay for the purchase with your own funds does not cause problems - 13% of the total cost of housing, but not more than 2,000,000 rubles. Maternity capital or other benefits are not taken into account if they paid for the apartment. After all, these funds are not subject to personal income tax. And since income tax is not withheld, it means that nothing can be returned.

The situation becomes more interesting when property is purchased using bank funds. In this case, in addition to interest on the cost of housing on general terms, it is possible to return interest on the overpayment on the loan.

It is immediately necessary to clarify that claiming a deduction for bank interest is possible only with a targeted loan, that is, the agreement with the bank must clearly indicate that the funds are intended for the purchase of housing.

You cannot issue an income tax refund on any consumer loan.

Repeated deductions from 2014

Oh, a lot of noise and chaos in the minds of citizens of the Russian Federation was caused by the law on the possibility of obtaining a repeated property deduction, which came into force in January 2014. Before this period, everything was much simpler: one apartment and one loan for it. It was in this combination that one could return income taxes, and once in a lifetime.

The fundamental difference between the two options is that a deduction from the cost of housing can be provided for several purchases (apartments) until the maximum amount for return has been accumulated. The deduction from mortgage interest is issued only once and only from one property. If the tax refund is less than the maximum amount, the remainder is forfeited.

You can watch this video tutorial or continue reading the article.

Since the owner has the right to both types of property deduction, registration always begins with the main one - a refund of 13% of the cost of housing. Only after this amount has been received in full can you apply for a “mortgage” deduction.

Maximum amount to be refunded

So, you purchased an apartment with a mortgage. Legally, the property is pledged to the bank, and you pay the loan amount and interest to the lender. The taxpayer can issue a refund on the interest that goes to the bank in excess of the principal debt.

Starting from January 1, 2014, a limit on the maximum amount for calculation was introduced - 3,000,000 rubles; you can receive up to 390 thousand rubles in your hands. In the regions of our huge country, housing prices vary greatly, so it is difficult to say whether the bar is set high.

But if you took out a mortgage before 2014 and want to return income tax on the interest paid, then the maximum refund amount is not limited: if you paid interest for 5 or 10 million rubles, then you have every right to return 13% of this amount fully.

Example. In Nizhny Novgorod, a two-room apartment can be purchased for 3 million rubles. If you take out a mortgage with a down payment of 600–700 thousand rubles. for 20 years, then the total amount of overpayment will be more than 4.5 million rubles. Thus, starting from 2014, you will not even be able to apply for a full deduction for all interest, and you will only be able to return 13% of RUB 3,000,000. = 390,000 rub.

But if this event happened before 2014, it would be possible to return the tax on all interest, regardless of the amount.

Another limitation on the maximum possible payment is related to the amount of income tax paid by the owner during a certain period. So, if we submit documents for a 13% refund for 2015, in fact we will receive no more than we paid personal income tax on wages for the specified year. For this reason, it is more profitable to apply for deductions for the cost of housing and for mortgage interest in different tax periods.

In order to make the most of the right of property deduction, you can order an individual consultation or fill out a 3-NDFL declaration. The prices are fabulous, the results are real.

Registration procedure

Tax refunds are made only after actual payment of interest to the bank.

Let's assume you are purchasing an apartment with a mortgage in 2014. You will be able to submit documents to deduct mortgage interest no earlier than 2015, and will only claim last year’s actual overpayment.

In 2016, you will resubmit the documents, applying for a deduction for interest paid in 2015. This will happen until the amount reaches the maximum 3,000,000 rubles. In order not to contact the tax office every year, you can wait time and submit documents for deduction of interest for several years at once - the deadlines are not limited by law.

Example. Let someone Ipotekov P.V. I bought an apartment on credit in 2012 and have already received a property deduction for it: 13% of the price paid. And since 2012, he has been paying interest on the mortgage of 50,000 rubles annually. In this case, Ipotekov can return 6,500 rubles each year. = 50,000 * 13%.

But you can do it differently. If today, for example, is 2016, then over the past 4 years (2012, 2013, 2014, 2015) interest on a mortgage loan of 200,000 rubles was paid. = 50,000 rub. * 4 years. And our Ipotekov can submit one 3-NDFL declaration for 2015, which will include all last year’s payments. In this case, he will receive a one-time return of 26,000 rubles. = 200,000 rub. * 13%.

So you have a choice: either receive annual mortgage interest payments, or accumulate a certain amount over several years, and only then return it through the tax office. The amounts paid on the mortgage do not expire, that is, there are no restrictions on the timing of their repayment.

Comment. There is another possibility of tax refund not at once, but with the help of. After contacting the tax office, you receive a notice of the right to a property deduction indicating the amount awarded. This document is submitted at the place of work, and from the moment the application is written, income tax is not deducted from the salary until the required amount has accumulated. The only difference in the documents is that there is no need to submit a 3-NDFL declaration.

To apply for a property deduction, you need to contact the tax office at your place of registration with a standard package of documents: an apartment purchase and sale agreement and an act of acceptance and transfer of property, receipts for payment for the purchase, a certificate of taxes paid.

A 13% refund on overpayments under a mortgage agreement can be a big help for new homeowners. These loans are taken out for large amounts and for a long period of time, and tax legislation offers financial support.

If you have any questions, feel free to write them below in the comments. We respond quickly and with pleasure. 🙂

When purchasing an apartment with a mortgage, a return of 13 percent of its cost is regulated by law. To receive a tax deduction, you must meet a number of conditions and also know the nuances of the purpose of the refund.

How to get tax deductions from your mortgage

A refund of 13 percent from the purchase of an apartment on a mortgage is due only to citizens of the Russian Federation or foreign ones who are legally employed and pay income tax on their wages. Refunds are also due to individual entrepreneurs, as they make payments to the budget. Persons who are not officially employed are not entitled to payments.

Who is entitled to an income tax refund?

A 13% refund is possible upon registration. If the loan funds were spent on a purchase and an inappropriate consumer lending program was used, a refund is not due. So, today deductions are calculated in the following situations:

• Buying an apartment, room, share with a mortgage;
• Mortgage loan for the construction of a residential building.

Both spouses can count on receiving the money if they were married at the time of purchase. Also, all persons in whose name the mortgaged property is registered have equal rights to compensation. If parents purchased an apartment in the name of their children with a mortgage, they receive a return of 13%, even if they are not nominally the owners of the property.

The cost of an apartment purchased from a relative cannot be used as a calculation for refund. Also, legal entities and individual entrepreneurs who purchased real estate for use in commercial activities will not be able to return part of the costs.

Features of accrual of 13% from the purchase of an apartment

A refund is allowed in the amount of 13 percent of the purchase price of an apartment with a mortgage. At the same time, the maximum price of an apartment is legally limited. It amounts to 2 million rubles. In this case, two scenarios are possible:

• If the purchase price is less than the limit, interest is calculated based on its full value;
• If the price is higher, then only from 2 million rubles.

For the first case, the citizen has the right to use this opportunity again within the maximum amount. For example, when purchasing an apartment for 1.5 million rubles with a mortgage, he receives a return of 13% of its entire cost. Afterwards, he has the right to take out a mortgage on a new property and receive a refund of another 0.5 million, regardless of the price of the property.

It is worth recalling that until 2014 this rule did not work. If a citizen purchased an apartment with a mortgage before this period for a lesser amount and received a return of 13%, then the difference was burned. That is, the owner no longer has the opportunity to reuse the deduction.

But the return occurs according to certain rules.

A citizen will not be able to receive more in a year than he paid in salary taxes for this period. Thus, the return of 13% may take several years.

It will be paid in the amount of taxes paid by an individual on his income for each year.

But there are no restrictions on the time period during which deductions occur. Therefore, even with a minimum salary, a person will receive all the money due, but over a long period of time. To speed up the process, you can request a refund for both spouses. In this case, for each payment will correspond to personal annual tax contributions.

If a citizen does not submit an application for a 13% refund in a timely manner, and several years have passed since the purchase of the apartment on a mortgage, he will be able to receive money only for the last three years, for which he needs to provide information about income for all this time.

Return on mortgage interest

The second option for a mortgage borrower is the right. In this case, the following rules apply:

• The maximum amount of interest from which recalculation occurs: 3 million rubles.
• The borrower has the right to return only 13% of the interest actually paid.
• If the interest is less than the limit, the client receives a refund of 13% of the actual amount. The remainder is burned. In a subsequent transaction to purchase an apartment with a mortgage, the 13% refund is no longer provided.

You can submit applications for a refund of paid interest as they are paid, i.e. while the mortgage is still in effect. Also, the duration of the return is not limited, and can last for several years if the owner’s income and, accordingly, paid taxes are less than the amount of deductions.

Documents for registration

The process of applying for a refund requires collecting documents and submitting them to the local tax authority. Payments can be requested from both the fiscal service and the employer.

The following documents will be required for a refund of 13 percent from the purchase of an apartment with a mortgage:

• Apartment owner's passport;
• Personal income tax certificate-2;
• Personal Income Tax Declaration-3, if there are other incomes from which mandatory fees have been paid;
• Documents explaining the expenses incurred: checks, receipts, act of transfer of housing, etc.;
• Mortgage agreement;
• A certificate from the bank confirming the amount of interest paid.

If a return is ordered from an apartment purchased for children, you must provide proof of relationship (birth registration certificates).

Consideration of a submitted application takes 2-4 months. The inspectorate recalculates it once, according to the amount of taxes paid for a given employee for the year. If the amount is less than the required one, in the next period you will need to submit the application again with a similar list of documents.

If you want the employer to make a refund of 13%, the fiscal authority issues a notice in his name. You will need to submit it to the accounting department along with the application for the deduction. Other supporting documents are usually not required.

After which the employer does not pay 13% of your salary to the budget, but credits it to you. This happens until payments exceed the due amount. If this takes a long time, you will need to submit an application to the accounting department annually.

Conclusion

Each owner of an apartment or house purchased with a mortgage has the right to compensate part of the costs. He receives a refund of part of the mortgage interest paid and a 13 percent refund from the purchase of an apartment. Documents and applications are submitted to the fiscal service, which assigns a one-time payment. You can also receive 13% of each salary from your employer. The procedure is repeated annually until the entire due amount is returned.

The deduction is due to the person who executed the mortgage agreement. If this is housing that is purchased after marriage, then the spouse can receive a deduction, since this property is already joint. In the case of shared ownership, the amount that can be returned is distributed according to the size of each owner's share. When parents buy an apartment or house for minor children, then even if the ownership is registered in the latter’s hands, but the parents make payments, the latter can issue a refund for part of the interest from their income tax.

Foreigners who work in our country and pay tax on their income here can also claim a deduction.

In what case can you partially refund the interest paid on your mortgage?

In order to return the interest paid to the bank when receiving a mortgage loan, the following conditions must be met:

• the income must be official, since the state is ready to partially refund taxes only on those incomes that are indicated in the official tax return;
• The amount that can be refunded must not exceed the total amount of taxes you paid to the government. For example, you paid the bank 2 million rubles in interest and intend to return 13% of this amount - 260 thousand rubles. However, if during the specified period you paid the state only 200 thousand personal income tax rubles, then you can only claim a refund of this amount. To receive the remaining 60 thousand rubles, you will have to contact the tax office later, when you transfer the required corresponding amount of personal income tax to the state;
• the mortgage loan agreement must indicate the purpose of obtaining and specify the specific property for the purchase of which money is given;
• the borrower should not have tax debts to the state;
• the person receiving the deduction cannot be a pensioner without work or a woman on maternity leave or leave to care for a child (after returning to work, she will be able to return personal income tax on interest on the mortgage).

Another condition for receiving a deduction from mortgage interest is that this right can only be used once.

How can I get a deduction?

Refund of income tax on mortgage interest is carried out in the following ways:

• receive the refundable amount from the tax office at the end of the year in which the interest was transferred or at the beginning of the next one;
• throughout the year, deduct the amount of interest from the base for calculating personal income tax.

In the first case, at the time of submitting the income tax return for the previous year (or after his employer reports for the employee), the tax service is provided with all the papers confirming the conclusion of the mortgage loan agreement and the transfer of a certain amount of interest last year. After checking the information provided, the Federal Tax Service will transfer the entire amount due for refund to the account of the recipient of the deduction, the details of which must be left along with the rest of the documents.

The second option is for the employer to provide documents on mortgage interest paid. He will reduce the amount of wages accrued during the year by the amount of interest paid. Thus, the amount of personal income tax that will be withheld from wages will decrease, and the amount of earnings that the employee will receive in person or into a bank account during the year will increase.

What is the maximum deduction amount?

According to current legislation, the maximum size of the base for calculating the deduction for interest paid is 3 million rubles. That is, you can claim a refund of mortgage interest of no more than 390 thousand rubles - 13% of 3 million rubles. If the interest on the loan exceeds this amount, then it will not be possible to return the remaining amount.

If the interest on the loan is a smaller amount, and then another loan is taken out to purchase the same property, then only the amounts paid under the first mortgage agreement can be returned.

It is important to remember that the amount of the resulting refund should not be more than the tax due on the transfer from the entire salary. For example, if the amount of interest paid on a mortgage for a year is 100 thousand rubles, then the amount to be returned will be 13 thousand rubles. Moreover, if during the calculation period you paid the state only 10 thousand rubles in taxes, then the amount of interest to be returned will be similar. The remaining 3 thousand rubles of deduction will be carried over to the next year. Hence the simple conclusion: the lower the official salary of the recipient of the deduction, the longer it will take to return the mortgage interest.

How long can it take to receive a tax deduction for mortgage interest?

The number of years during which you can receive this deduction is not limited by law. That is, if the loan has already been paid in full along with interest, and payments on the return of mortgage interest have not yet been completed, then receiving the deduction can be continued. The 13 percent refund on mortgage interest will continue until the amount to be transferred to the applicant reaches RUB 390,000. However, you cannot repay more than the legal maximum amount for mortgage interest.

What is the procedure for obtaining a mortgage interest deduction?

The law allows you to apply for a refund of mortgage interest within a period not exceeding three years after the property is finally purchased.

To get a tax refund, you need to do the following:

1. prepare papers and their photocopies, which confirm the fact of concluding a transaction for the purchase of housing, a mortgage agreement with the bank, documents on the payment of interest on the mortgage;
2. submit all collected papers to the Federal Tax Service to obtain a positive decision on granting a deduction;
3. choose the method of making a tax refund - through the employer or the Federal Tax Service; in the latter case, provide your bank account details to the tax inspector.

The list of documents that are submitted to the inspection, in most cases, is as follows:

• passport of the person who applied for a refund of mortgage interest payments;
• 2-NDFL certificate issued at work (if he is employed somewhere and does not work independently (income in this case is reflected in the 3-NDFL declaration));
• declaration 3-NDFL - it is filled out by the applicant himself, it indicates all income and amounts subject to deduction, the amount of tax, the required refund based on the results of calculations;
• papers evidencing the right to deduction: agreements with the bank, with the seller, acts of acceptance and transfer of the purchased property, payment orders, receipts, other documents for the transfer of mortgage interest;
• account details if the money will be returned through the inspection.

Having a complete package of documents increases the chances of a quick resolution of the issue with the tax office.

One of the most effective and easily accessible ways to save on purchasing a personal home is to figure out how to return 13 percent of the total cost of real estate if you buy an apartment with a mortgage. This saving option is available to all citizens who receive official income with mandatory deduction of income tax to the state.

Basics

The economic system of the state is based on the financial relations of the state with citizens and foreigners who temporarily or permanently reside in the territory of the Russian Federation. In particular, this applies to tax deductions for making profits while staying in the country. So, this year, the tax amount was 13% for all types of income. These are the so-called personal income tax deductions. If a citizen has made regular contributions to the treasury for a long time, then he has a chance to save on the purchase of personal real estate.

But this method has a number of significant features, therefore, before you begin to initiate a refund, you need to figure out how to apply for a tax deduction when buying an apartment with a mortgage.

So, in order to get a chance to return the money spent on purchasing housing through the tax office, you need official employment. In particular, the categories of persons who can count on consideration of the application include:

• citizens who are officially employed on the territory of the state (including both citizens and residents);
• persons who have reached retirement age but continue to work;
• private entrepreneurs;
• guardians and parents of minor children who make contributions for their children.

It is also necessary to include in a separate category of applicants those who cannot count on receiving the service:

• persons who do not have any taxable income;
• those entrepreneurs who, due to their activities, are subject to a different taxation procedure.

It is also not allowed to receive tax compensation for housing that was purchased from a close relative. Regardless of whether you took a targeted loan or a consumer one.

The basic rule for how you can get your mortgage interest back is that you can only get a tax refund for the people who bought the home. Other types of lending cannot be compensated in this way, so it is important to indicate when applying for a loan that the funds are intended to be used for the purchase of real estate. A tax refund is possible in the following situations:

• to buy an apartment or a private house;
• acquisition of land for development;
• preparation of documents necessary for the construction of a residential building;
• carrying out major repairs in existing housing.

Read also Documents required for obtaining a mortgage

A tax deduction when purchasing an apartment in 2019 can be obtained several times, that is, multiple applications by the taxpayer are allowed to cover the loan from the purchase of an apartment. But, the total amount of the contribution made from all real estate properties cannot exceed 2 million rubles. The maximum deduction from bank mortgage interest is also set separately. It is also possible to receive only 13% of the total overpayment amount, but the interest should not exceed 3 million rubles.

Peculiarities

In addition to the fact that multiple applications to the Federal Tax Service are possible, reimbursement of loan funds is allowed in one of the following ways:

• one-time (if the purpose of the tax deduction when purchasing an apartment with a mortgage is to repay part of the main loan);
• when you receive regular, reusable compensation until the established limit is exhausted (this is how a tax deduction on interest is collected).

Important! The mechanism for a borrower to receive a tax deduction for a mortgage on an apartment does not provide for the transfer of funds in favor of the bank from the state treasury. To return income tax, the tax office sends a corresponding order to the borrower’s employer, who begins to transfer the necessary benefits automatically in favor of the banking institution, so the recipient of the loan funds must be officially employed.

There is an exception to the above rule, which applies only to those persons who have stopped official work involuntarily. These are pensioners and disabled people. For these categories of citizens, there are separate principles on how to obtain a tax deduction when purchasing an apartment. Namely, the last three years that preceded the submission of the request are taken into account whether it is possible to return part of the payments to the 13% tax.

Algorithm

The sequence of actions to obtain a deduction for interest, or for the principal amount of a loan from a mortgage, involves first contacting the bank. Employees of a financial institution must prepare the remaining payments for interest on an apartment mortgage, as well as calculate the amount of overpayments at the interest rate, which affects the limit amount of returned funds.

Afterwards, you need to collect the basic papers that will be required to submit your application. The list of documents includes:

• civil passport of the borrower;
• original loan agreement;
• calculation of the interest payment or the remaining principal amount (depending on which group of financial obligations the tax compensation is directed to);
• income certificate;
• income declaration, which is filled out annually by all tax payers;
• a document confirming ownership of the apartment that is the subject of the loan.

In addition, if, in addition to mortgage payments, there were additional costs associated with repairing, improving or registering the home, then the debtor can provide receipts for their expenses, on the basis of which compensation can also be obtained.

Read also About the possibility of changing an apartment with a mortgage to another

All of the above documents are sent to the local tax office and supported by the citizen’s personal application for a tax deduction when purchasing an apartment. The petition is written in one’s own hand according to the template established by the Law and in two copies, one of which remains with the applicant.

Registration of the required order for the return of 13 percent of the purchase of an apartment on a mortgage takes about three calendar months, which are allotted to ensure that there is enough time to verify all the data displayed in the papers. After the specified period, the completed order is sent to the employer, and he, in turn, will gradually return the funds to the bank.

Principles

As stated above, you can return 13 percent of the required payment on the mortgage loan, but maximum limits are set:

• 2 million regarding the total price of real estate (that is, no more than 260 thousand);
• 3 million in relation to the interest rate (does not exceed 390 thousand).

For a mortgage in 2019, based on the specified restrictions, each citizen buying an apartment can return no more than 650 thousand rubles. But, if the applicant buys a second property, the refund will depend on whether tax compensation was previously issued and, if so, in what amount.

The limit amount of payments also depends on the citizen’s earnings, that is, when the amount of required compensation for a mortgage is 100 thousand rubles, and the citizen paid only 50 thousand in taxes this year, then only these 50,000 will be transferred to pay back the mortgage for the purchase real estate. But next year, when another 50 thousand tax deductions accumulate, they will also be returned to the taxpayer. That is, the entire amount is necessarily returned, but as the able-bodied citizen pays personal income tax.

A special category of acquisitions should include the registration of a joint mortgage between official spouses. Thus, an agreement is concluded between two persons who undertake to pay the loan in equal shares, and who will subsequently become the owners of equal parts of the purchased property. In this case, a logical question arises: is it possible to receive a tax refund for both spouses at the same time on one property. Of course you can.

The registration procedure involves submitting an application to the tax service from the husband and wife, and the state can return the money to each of them, but not in full, but in proportion to the rights of shared ownership. That is, if the wife owns 30% of the property, then when calculating compensation, the price of these 30% will be taken as the basis. The facts of early registration of deductions by each of the spouses are also taken into account.

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What's happened 13 percent refund on apartment purchase?

Refund of 13 percent from the purchase of an apartment is an income tax refund process. The income tax rate is 13 percent. Purchasing a home is a basis for returning income tax in a certain amount. Therefore, after purchasing a home, you can return 13% of its cost (but there is a certain limit), returning personal income tax (NDFL).

Tax explains:

This return process is more correctly called receiving a property tax deduction when purchasing a home. Property tax deductions are available in several situations. Buying a home (for example, an apartment) is one of these situations.

In such a situation, you are returning exactly the personal income tax (NDFL) that you previously paid, or that your employer (or other tax agent) previously withheld from you. As some people mistakenly think, such a deduction has nothing to do with property tax or VAT (value added tax).

The deduction limit is 2 million rubles. This means that one person can return no more than 13 percent of 2 million rubles. That is, no more than 260 thousand rubles. And, of course, no more than 13 percent of the cost of the apartment. When they say “a tax deduction of 2 million rubles has been provided,” they mean that the return in this situation is not 2 million rubles, but 260,000 rubles. That is, 13 percent of 2 million rubles.

How to return 13 percent from the purchase of an apartment?

To receive such a deduction (and get your 13 percent back), as a rule, you need to prepare certain documents and submit them to your tax office at your place of registration. It is your registration, and not the location of the home you purchased. Among these documents, as a rule, is a tax return for the year in which the taxes that you are going to return were paid. This is the so-called 3-NDFL tax return, a tax return for an individual. Millions of people file taxes every year, so don't be afraid of this process if you haven't done it before. This is a standard procedure for tax inspectorates.

You can return 13 percent of the mortgage interest, but not more than a certain amount - 390,000 rubles. This only applies to actual interest. But not to the expected (planned) ones. That is, the refund applies to the mortgage interest that has already actually been paid.

Our video

See how to get your taxes back when buying an apartment.