The procedure for calculating and collecting real estate tax is declared by the relevant code. Laws change from year to year. At the same time, the rights and obligations of citizens in the field of taxation are changing. A fact that remains unchanged is the need to pay tax.
What is the tax on the sale of real estate?
The right of ownership of immovable property may belong to a private person, a private enterprise or a municipal authority. Types of real estate include different options: residential premises, commercial premises (commercial or office buildings), industrial premises, land and agricultural land. The owner may have the right to sole ownership or as part of a share. In all cases, if the transaction falls within the description of the taxable, property sales tax remains mandatory.
The control system is carried out by tax authorities and their territorial divisions. The fact of payment or non-payment of tax is reflected in the annual declaration submitted by citizens.
General principles
According to Russian law, any form of officially received profit is taxed. From this point of view, the alienation of real estate is considered to be in favor of the owner. Therefore, it is the seller who must pay the tax on the sale of real estate.
Article 224 of the Tax Code of the Russian Federation states that the amount of proceeds from the alienation of real estate must be taxed at a rate of 13%. However, this law is not applicable in all cases. Details will be discussed in this material.
Another law to which reference is made is Federal Law No. 382. It has been relevant since the beginning of 2016. According to the rules of this law, the tax on the sale of real estate in the legal field is based on the terms of ownership. This document considers two types of ownership by time:
- Transfer of ownership of real estate until 2016.
- Property owners whose rights are fixed after 01/01/2016.
The first category of citizens in the alienation of real estate is governed by the provisions of the law in force until the beginning of 2016. According to this law, tax is mandatory for all owners who alienate property within the first 3 years after the transfer of ownership. For the second category, a new procedure is in effect, according to which the marked tenure is 5 years.
Who can not pay?
If we consider the general procedure for collecting taxes, then the law provides for circumstances in which the tax on the sale of real estate for individuals loses relevance regardless of the tenure. In particular, a method of transferring ownership is considered. These are the following cases:
- When the property goes to the owner, subject to a lifetime dependency of the former owner.
- Inherited property.
- Alienation of real estate, the right to which arose as a result of privatization.
- The basis of ownership is a gift agreement.
If the title document falls into one of these categories, the transaction should not be classified as additional income and, accordingly, be taxed.
Features are also available by region. As you know, domestic laws are divided into federal and territorial. Local authorities have the right to adapt some federal laws without fundamental contradictions. In practice, in this way, circumstances are usually facilitated for a particular category of citizens. Tax on the sale of real estate is no exception.
For example, a law is in force for the Khanty-Mansiysk District, according to which income from the sale of real estate is not taxed even during the first 3 years of ownership. Similar rules apply in the Stavropol Territory: here the term of taxable transactions is reduced from 5 to 3 years. To find out what tax on the sale of real estate should be paid in a particular region, you need to monitor changes in territorial laws.
How to calculate?
Citizen S. A. sold a house bought 1.5 years ago for 6,300,000 rubles. His case in all respects fits the definition of the law. He is officially employed, and his work experience is more than 10 years. What will be the amount of tax when selling real estate for citizen S. A.
To prepare a declaration for the year, you need to take the following information:
6 300 000 - 1 000 000 = 5 300 000 - the amount of the tax base
Tax amount: (6,300,000 - 1,000,000) x 13% = 689,000 rubles
But long before the deadline for filing the declaration, S. A. collected documents for deduction and received confirmation from the tax service. The deduction was the maximum. Now the calculations look different:
(6,300,000 - 5,300,000) x 13% = 130,000 rubles actual amount of payment.
If citizen S. A. made a deal 5 years after the purchase, he would be included in the category of those released.
For individuals
The tax on the sale of real estate for individuals, its features and the procedure for payment is declared by Chapter 23 of the Tax Code of the Russian Federation. Thus, legal entities with rights to receive income in the territory of the Russian Federation are divided into three categories:
- A resident of a country is a citizen who has lived in Russia for the past year, but at least 183 days.
- Non-residents - persons who do not fall into the previous category.
- Conditional definition - currency residents are citizens of the Russian Federation who during the last year live in another country but visit Russia at least once a year.
When selling real estate by a non-resident, taxes and the procedure for their calculation are regulated by article 209 of the Tax Code. So, for them a separate collection of personal income tax is used.
For legal entities
When a legal entity alienates property on its own balance sheet, the procedure for calculating taxation is largely determined by the chosen tax system. But it is certain that selling a property, a legal entity receives income. Accordingly, this income should be reflected in the balance sheet of the company. We continue to consider the tax on the sale of real estate. How much and in what order should a legal entity pay it? It is necessary to consider belonging to one of the following tax regimes:
- UTII.
- Simplified system.
- Patent System.
The type of property is also noted. It can be residential, commercial, land or subsoil.
Factual information and the form of ownership are also relevant: does the company conduct business on the fact, are the founders residents or non-residents of the Russian Federation? To answer all these questions, you should be guided by article 23 of the Tax Code.
When selling a residential property by a legal entity, income is not subject to VAT, but income tax is mandatory. The income tax rate also depends on the civil status of the founders (resident or non-resident). If we are talking about the alienation of non-residential premises, which is on the balance sheet of the enterprise, then the amount of income is subject to both income tax and VAT. Moreover, income tax is not calculated on the amount of the transaction, but on the amount of net income.
An important nuance: the tax on the sale of commercial real estate does not take into account the number of years of ownership. Another nuance from the field of tax optimization says that the company has the right to lower the amount of income by the residual price of the object. If, after accounting, the difference between the transaction amount and the final amount is negative, then the figure is classified as an enterprise loss.
Should pensioners pay?
Does the tax on the sale of real estate by individuals - pensioners and other special categories of citizens? According to current laws, tax benefits or exemptions tied to the social status of citizens are not provided. Pensioners must pay tax if they fall under the general category of taxable persons.
It is important to distinguish property tax and personal income tax. Since 2014, property tax is not relevant for pensioners. An exception is when a pensioner uses real estate for profit. Otherwise, they obey the general order: a tax on the sale of real estate for 3 years will be mandatory for them.
But pensioners have the opportunity to significantly reduce the tax or even be exempted. To do this, they must resort to property deduction. Until 2012, the deduction did not apply to senior citizens. The adoption of Federal Law No. 330 granted them such a right.
Thanks to this law, pensioners can receive one of the following options for tax deduction after the sale of real estate:
- If the ownership right is fixed more than 3 years ago, then they are completely exempted on a common basis.
- If the tenure is less, and the value of the object does not exceed 1 million rubles, they can receive a reduction in the tax base to the amount that was spent on the acquisition of the object.
Deductions
Subjects of taxation are entitled to a property tax deduction. It applies to those citizens who are officially employed and from their income deduct income tax or personal income tax in the amount of 13%. There are three deduction options:
- Full release.
- Partial
- Taxation on the entire volume of revenue.
In this case, the maximum amount by which tax can be reduced is 1 million rubles.
Example: a citizen sells an apartment bought 2.5 years ago for 4,500,000 rubles. By the time the declaration was submitted, the citizen also prepared documents for deduction. He was entitled to a maximum deduction. As a result, the amount of the tax base amounted to 3,500,000 rubles for him, and taxes - 455,000 rubles.
When answering the question of what tax on the sale of real estate should be paid, it is important to mention the option of joint ownership. If the ownership of real estate extends to several people, then the obligation to pay tax is also distributed depending on the share of each of them. Or co-owners can agree among themselves and incur a tax liability in a different manner.
Citizens can use the deduction more than once, since it applies to each unit of the transaction. But within 1 year, only one deduction is allowed. Thanks to this relief, the amount of tax on the sale of real estate can be significantly reduced.
There are three methods for implementing the deduction:
- Issuance of cash in cash.
- Transfer to the beneficiary's bank account.
- Issuing a notice to the employer indicating the release of the citizen from the payment of personal income tax for the period during which the required amount has accumulated.
How to apply for a deduction?
The application for deduction is executed during the reporting period in which transactions are completed. The deduction can be obtained in two forms: a fixed amount or an amount equal to costs. The choice depends only on the applicant: first, he can calculate which option is more favorable to him, and apply for that particular type.
A deduction is appropriate when a citizen needs to prove the costs of a previous purchase of real estate that was sold in the reporting period. Therefore, these costs will have to be secured with copies of documents on them. For these purposes, copies of the following documents are submitted to the tax authority:
- The agreement on the acquisition of real estate (sale).
- A document proving the use of the services of real estate companies.
- The act of transfer of ownership.
- Documents from the seller about receiving money: a receipt (if the money was received in cash) and an extract from the bank (if the money was transferred to the account).
- Money orders.
- Other documents generated during the transaction and representing financial significance.
After confirming the tax deduction, the tax authority should again return to the issue of property sales tax. How much should I pay? The tax base will be significantly reduced. It is important to take into account that the deductible expenses do not include insurance payments and mortgage repayments.
Law Objectives and Practice
After citizens find out what tax is levied on the sale of real estate for a short time of ownership, and find out tax rates, they can unwittingly become interested in options for saving funds legally. For an answer, attention should be paid to the initial purpose of introducing this tax.
It was believed that the motive of the owners of the quick sale after the purchase is the desire to make money on the difference. Everyone remembers the pre-crisis times, when real estate prices rose dynamically, and the state had no direct leverage. From this point of view, this tax plays the role of an indirect tool for controlling the real estate market. And this is true, since with too high real estate prices, as a rule, only a certain social layer will always win at the expense of others.
But consider another case: citizen M.S. needs to expand housing, and is also not averse to moving closer to the central part of the city, but does not own his own funds. He finds a compromise option: to sell the only housing, temporarily live with his family with his grandparents and arrange a mortgage for a more suitable housing. Everything went according to plan, but here the crisis of recent years has made its adjustments. The owner was among those 20% who failed to return the funds. Despite the efforts of the borrower, refinancing in another bank did not take place.
The only right decision was to sell the property before the bank sells it at open auction. As a result, a citizen loses funds in the form of interest rates on a mortgage and pays the sales tax. If the cost of housing has changed, then perhaps he will not be able to buy an apartment. And this is not an isolated case.
At the stage of discussion of the bill, the possibility of releasing those persons whose only real estate is being sold was discussed. But the legislators had concerns that speculators could take advantage of this provision when they found out what tax is levied on the sale of real estate.
Can I not pay?
It is possible to optimize the amount of tax in addition to deduction. In addition to the cases considered by law, there are still options:
- Providing documentation of costs incurred. This provision is also officially authorized. For example, even if a person bought real estate for the purpose of further sale, the amount of his income is not equal to the entire value of the transaction. Income is recognized only the difference between the purchased and sold value.
Expenses are considered: the cost of the facility, expansion costs, repayment of existing debts for utilities, networks and permitted types of redevelopment, improvement of landscaping and other repair work.
- Application of double deduction. When wondering how much tax is levied on the sale of real estate, one should also take into account the legal status of the taxpayer: as part of the implementation of this type of taxation, he is both the seller and the buyer. Another important condition is the execution of two transactions (purchase and sale) during one calendar year. And finally, the third condition is if the purchase was made earlier than the sale. That is, only those who do not have the only housing have optimization opportunities. If the deduction was not claimed when buying the first apartment, then now the liability can be written off at his expense, regardless of what tax on the sale of real estate is to be paid to the budget.
- The use of a reduction factor. According to the conditions of Article 217 of the Tax Code of the Russian Federation, income is considered the amount equal to multiplying the decreasing coefficient by the cadastral value. In this case, it is even possible to reduce the tax base to zero.
If the status is a private entrepreneur?
If a private entrepreneur sold real estate before being officially registered as an individual entrepreneur, the transaction takes place with the tax authorities in the form of a regular personal income tax return. If at the time of the transaction the seller had the status of an entrepreneur, a logical question arises: what sizes will have to pay taxes when selling real estate IP?
It is important to consider whether the property is listed in the OKVED code list as the main means of commercial values that generate income or not. The second determining factor is the IP tax system. There are two types: USN - a simplified system and the method of "income minus expenses".
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