Tax deductions related to real estate purchase
printWhat tax deduction for real estate purchase is
A tax deduction is an item or expense subtracted from gross income to reduce the amount of income subject to tax. The most common deductible expenses are purchase of real estate, education and medical treatment expenses. In Russia, if you receive your income from your employer (as opposed to investments, self-employment), usually your employer withholds the income tax from your salary, in which case you receive your after tax income. If you are a tax resident and you are eligible for any of the tax deductions, you may return some of the income tax paid by applying for tax refund. One type of income tax deduction is a deduction of expenses, made to purchase real estate. This tax deduction can be received only once. Unlike other tax deductions, the deduction amount can be applied in the future years.
Limits of tax deduction for real estate purchase
The maximum deductible amount for expenses for the purchase of real estate is 2 million rubles. This amount is valid for expenses that happened in 2008 or later. For expenses that happened starting from the year 2002 and before 2008 the maximum deduction amount is 1 million rubles. Additionally there is no deduction limit for percent repayment for loans used to purchase the real estate (mortgages).
Tax deduction reduces the so-called taxable base; taxable base is the amount upon which the tax was levied. Thus, you will receive back no t the amount deduction, but 13% of the deduction amount. Besides you cannot get a refund for an amount greater that the amount of taxes you have paid. For example, 13 % of 2 million rubles equals 260 000 rubles. You can get a refund of 260 000 rubles only if you have paid 260 000 in income tax. If you have paid less, you can refund for a given year only the amount equal to or less than the amount you paid in taxes for the same year. The rest of deduction is transferred to the next (following) years. This opportunity to get deductions in the next years is unique for this type of deduction.
How to get deduction with Nalogia
In the section of our website "Useful" you can find the list of documents you need to receive tax deductions, application forms, forms of the tax returns, instructions and software to prepare all necessary documentation. Besides, you can order preparation of all necessary documentation to Nalogia's consultants. In case you order tax preparation, our consultants will carefully, fast and conveniently prepare everything for you. You will get the documents not leaving you apartment of office. You can find out more here.
Valid as of 18.05.2012
