That is how much the state withdraws in its favor from the income of every person in the state. 13% of salary, 13% of the cost of the apartment sold / bought, 13% of the paid mortgage interest. That is, a person pays the bank for taking a mortgage, and the state can take up to 13% to the treasury both from basic payments (for the cost of an apartment) and interest. And takes, but, truth, not always 13%. Sometimes less. But the return of interest on the mortgage is possible. Really return the money spent on this. More precisely, only 13% of them (this is the maximum). This action has a legislative basis. Namely – Article 220 of the Tax Code of the Russian Federation. What moments are worth emphasizing?
Ways to return the tax deduction from mortgage contributions
So, reimbursement of your money can be done in two ways. At the end of the year, an n-th sum consisting of returned tax deductions will be credited to a plastic bank card. How much will there be with a deduction for the principal loan, how much with interest – this must be clarified and solved individually, internally, in the tax office. Or you can agree with the employer that you will not have income tax from wages for the period of a partial return of money (or a smaller amount if the tax deduction for buying an apartment in a mortgage is, for example, 10%).
Consequently, the employee will simply receive a slightly higher salary each month. And it will continue until the borrower pays monthly installments, and until the returning money in the amount. An important point for co-borrowers and for those who pay for ATMs. The fact is that registration of tax refund can be arranged only for one person. Co-borrowers are not counted here.
Either documents are required confirming the equal or different ownership of the apartment taken on credit in order to be deducted appropriately among the participants. As for the ATMs, the payer’s name does not appear on their receipts. Because of this, it may be difficult to issue a refund. The fact of repayment of the mortgage is, but who extinguishes it? This is where a problem may arise.
Additional expenses subject to income tax
Therefore, in order to avoid such difficulties, it is recommended to personally visit the bank for 100% fixing of the borrower’s identity. It is possible that someone is not in the know, but the state tax is levied not only on payments for the basic cost and interest, but also on repair and construction costs. Provided that the borrower pays them from their personal funds. The apartment is in need of repair, the house is not fully furnished, the cottage is not completed. What expenses are obvious here?
- building materials;
- design estimates, which are experts;
- payment for services of repair and construction companies and movers;
- call specialists to connect the apartment / house to the system of public utilities, engineering systems (electricity, water, gas, Internet, telephone).
Cash costs for all these items can be very high. And their partial refund will not be superfluous. To do this, all such costs must be recorded in the documents (checks and contracts). Only one thing should be remembered. Money spent must be the borrower’s personal funds. If the maternity capital, some state subsidies, etc. the tax deduction will not be arranged.
Possible failure and procedure
The tax authorities may refuse to return the deduction at all if the loan was not targeted. That is, when the bank issues a certain amount of money to buy an apartment or a private house, and the borrower, and the bank itself, still do not know what kind of housing it is and where it is and how much it costs. Also the reason for the refusal will be tax arrears. However, in the event of its prompt liquidation, the National Assembly is likely to reconsider its decision. A very important point: you can use the right to return the tax deduction only once.
If a person has already taken the mortgage, paid it off and returned the state interest. tax, then repeat this again is no longer possible. In a sense, you can take a mortgage, but there will be no income tax return. Unemployed pensioners and women on maternity leave after birth have no right to return the deduction either (until the child’s age is one and a half years old or until the woman officially comes to work). So, as the final chord, it is worth streamlining the whole process in stages. The points:
- collection of all documents mentioned in the article and their photocopying;
- (in accordance with clause 6 of Article 78 of the RF Tax Code) together with the documents;
- determination of the method of returning interest, if the NA gave “good” (consideration period up to 3 calendar months);
- solving possible minor organizational issues with the employer;
- A specialist of the Federal Tax Service Inspectorate (IFSN) must obtain from his borrower a bank account number to which the money will be transferred.
There may be some additional issues solved individually. One way or another, but in this process there are usually a maximum of four participants: the borrower himself, the tax officer, the bank specialist and the borrower’s employer. Last question, even two questions. And when exactly can I apply for a refund of interest deduction? And can this be done after the mortgage has been repaid? Let’s say in 10 years.
The answer is that the borrower has the right to apply for tax reimbursement within 3 years from the moment of real estate purchase on credit. Actually, it is even desirable to wait for a year, so that a substantial amount of monthly tax deductions have accumulated. But trying to get a refund 10 years after the repayment of the mortgage hardly makes sense. This material, due to its relevance, is intended for a wide range of readers.
Legal issues are almost commonplace for this country, so material that fully or partially responds to them is always useful. In this case, the issue of the return of the tax deduction from mortgage contributions was concisely and succinctly studied. Since we have more than half of the country involved in the mortgage sector, and money is not superfluous, the potential utility of this material is not questioned.