The tax deduction when buying an apartment for an individual entrepreneur is a topic that causes a lot of controversy and disagreement among the population. Some believe that entrepreneurs cannot claim income tax refunds, while others insist otherwise. How is the situation in reality? The answer to this question will be found below. We will try to provide all relevant information on property deductions and entrepreneurial activity upon return of personal income tax. All this will help to avoid a huge number of problems in the future.
Deduction determination
The tax deduction when buying an apartment for a private entrepreneur is a tempting offer. A deduction is the process of returning money for certain transactions against income tax.
In our case, part of the cost of buying an apartment can be returned back to the payer, but with some reservations. Not everyone can make a deduction. What does the legislation say on this issue?
How much can I refund
First you’ll have to figure out how much money is allowed to return as a deduction. The legislation of the Russian Federation indicates certain limits that are granted to a person for life.
In general, the deduction provides for a return of 13% of the amount of expenses in certain transactions. However, there are limitations.
In the case of property deduction, you will have to focus on the following information:
- You can not return more money than the amount transferred for a given period of time income taxes.
- Property deduction allows you to reimburse a total of 260 thousand rubles. After the exhaustion of this limit, the right to deduction is abolished.
- A citizen who has issued a mortgage can expect to return the transferred interest and the main loan. Mortgage deduction allows you to regain 390 000 rubles.
In fact, everything is simpler than it seems. It is enough to carefully study the current legislation to find out how the tax deduction is made out when buying an apartment for an individual entrepreneur and other recipients.
Limitation period
The second point worthy of attention is the period for applying for a tax refund when buying real estate. The statute of limitations for deductions is extremely important.
At the moment, it is 3 years. This means that a potential recipient can demand money both for a transaction made no more than 36 months ago, and for the entire three-year period (for example, when paying a mortgage).
Basic conditions for registration
Can an individual entrepreneur return 13 percent from buying an apartment? And if so, how can the corresponding procedure be carried out?
The thing is that not all citizens can count on the return of money for certain expenses to the personal income tax account. First, certain conditions must be met. There are not so many of them.
In order for a person to have the right to a tax type deduction, it is necessary:
- Presence of a permanent place of work.
- Transfer personal income tax in the amount of 13% of income to the state treasury. Interest rates above or below the specified value are not taken into account.
- Have Russian citizenship (or be a resident of the Russian Federation) and be capable of legal age as an adult.
- Make a deal on your own behalf.
In fact, everything is much simpler than it seems initially. If you prepare in advance for the procedure, it will be possible to minimize all upcoming chores, and even completely get rid of them. But what about entrepreneurs?
Law and business
Can an individual entrepreneur receive a tax deduction when buying an apartment? Unfortunately, giving a definite answer will not work. It depends on several factors.
Theoretically, the entrepreneur has the right to a tax deduction when buying property. In fact, such "bonuses" are extremely rare. And there are reasons for that. Which ones? We will tell about them below!
When can I demand money
Can an individual entrepreneur receive a tax deduction when buying an apartment and how? First of all, you need to make sure that the entrepreneur complies with the rules established by the legislation of the Russian Federation.
It is about paying personal income tax. Entrepreneurs who transfer taxes to the state treasury in the form of 13% of income have the right to a tax deduction. Only in this case, the IP will be able to claim a deduction.
Usually, in practice, entrepreneurs working under the general taxation system are able to issue a refund for purchasing real estate without problems. We will find out a little later how to act to achieve the desired goal. This is not too hard.
Special tax regimes
The tax deduction when buying an apartment for an individual entrepreneur is not always drawn up, but only under certain circumstances. In real life, this situation is becoming less common. What is the reason for this?
So that entrepreneurs try to work with special taxation regimes. They provide for special tax rates - above or below 13%. Accordingly, the right to deduction is abolished.
Where to go
How to quickly get a tax deduction when buying an apartment? To do this, you just have to adhere to a certain algorithm of actions. But before that, we will study several important nuances of the operation.
For example, where to apply for a tax deduction. Such applications are accepted:
- tax services;
- multifunctional centers.
No government services provide the studied “bonus” anymore. You have to contact at the place of registration of the IP.
Order of registration
Can an individual entrepreneur receive a tax deduction when buying an apartment? Suppose yes. In this case, you should not hesitate to contact the Federal Tax Service. Otherwise, the operation will take a lot of time and effort.
To issue a personal income tax return for the acquisition of real estate, a citizen must:
- Generate a package of certificates requested by government authorities. An entrepreneur may have problems with this step.
- Fill out an application for registration of income tax refund.
- Submit a petition to the Federal Tax Service.
- Wait for a response from the tax office.
- Get the money stipulated by the legislation of the Russian Federation.
It sounds easy and simple. The tax deduction when buying an apartment for an individual entrepreneur is not much more difficult than for an ordinary citizen. But at the stage of preparing the documentation for translating ideas into reality, entrepreneurs have difficulties. This is a normal occurrence.
Main papers
How to get a tax deduction when buying an apartment? First you have to make sure that the entrepreneur can exercise the appropriate right, and then prepare a certain package of certificates.
Without fail, it includes:
- certificate of registration of IP;
- income statements;
- tax return for the reporting period;
- USRN statement;
- contract of sale of real estate;
- checks confirming transaction costs.
That is far from all. Often, entrepreneurs have to prepare an additional package of references. It will change depending on the life situation.
Additional papers
Need to apply for a tax deduction when buying an apartment for an individual entrepreneur? Documents for submitting the application of the established form are prepared in advance. We have already familiarized ourselves with the main list of components.
According to the law, an entrepreneur can arrange housing in the property of a spouse or child. Then the IP will still be able to return part of the funds for the acquisition of real estate for their finances.
In this situation, the entrepreneur may need the following papers:
- birth certificate;
- certificates of adoption;
- extracts from the registration of the child in the registry office;
- marriage contract.
That should be enough. It is advisable to immediately attach copies of the listed securities to the application in the established form.
Mortgage and repayment
The calculation of the tax deduction when buying an apartment in a mortgage raises many questions. It is better to check it with the Federal Tax Service or use online calculators that allow you to quickly calculate the amount of personal income tax return depending on the payments made by a person.
So that an individual entrepreneur can apply for a deduction for a mortgage, he needs to prepare;
- loan repayment schedule;
- mortgage agreement;
- any payments indicating the fact of transferring money for interest and the main loan.
Of course, we must not forget about the mandatory list of documentation for deduction. Without it, it is impossible to recover the income tax paid to the state treasury.
Waiting time
How to get a tax deduction when buying an apartment? More such a question will not confuse the citizen. From now on, it is clear that entrepreneurs with OSNO can apply for personal income tax refunds.
How much money to wait? Making a deduction - the procedure is very long. On average, it takes 3-4 months. That is why it is recommended not to hesitate to contact the Federal Tax Service with a corresponding request.
As practice shows, a deduction application will be considered for about 2-3 months. In exceptional cases, the inspection period may be extended. Another month is needed to transfer money to the entrepreneur’s account. Sometimes transactions are faster.
Can refuse
We studied the tax deduction when buying an apartment for individual entrepreneurs. With proper preparation and certain conditions, the entrepreneur will be able to regain part of the taxes paid for the acquisition of real estate. But, as practice shows, such cases are becoming less common. IP is more profitable to work with special taxation regimes. They do not provide for deductions.
Can the applicant refuse to transfer money for the acquisition of real estate? Yes, but there must be reasons for this. Moreover, the answer of the Federal Tax Service is necessarily issued in writing.
Most often, refusals of tax deductions occur due to:
- incomplete package of documents attached to the application;
- missing deadlines for applying for money;
- the fact that the property is not issued for the spouse or child of the entrepreneur;
- use of fake documents;
- lack of rights of an individual entrepreneur to issue a deduction.
If the FTS did not give a written answer, you can complain to the prosecutor. If a decision is justified, it is allowed to correct the error within 1 month without re-contacting the registration authorities. For example, bring the missing documents to the Federal Tax Service.