Property sales tax

According to the laws of the Russian Federation, tax on the sale of property is paid by citizens if income was received as a result of the transaction. But there are other nuances of taxation when selling real estate that should be taken into account. For example, the amount of tax depends on the status of the citizen, the value and nature of the real estate being sold.

The main features of taxation

According to the latest amendments, the tax on the sale of property of individuals in 2017 is paid in the following cases:

• When selling an apartment that has been registered with the owner for less than three years;
• When selling vehicles that have been on the estate for less than three years;
• When selling a private house that has been owned for less than three years.

Real estate registered after 2016 can only be sold tax-free after 5 years - that is, the minimum threshold has been significantly increased in accordance with the changes for 2017.

The size of taxes and some features of payments

Property sales tax is payable at the following rates:

• For residents of Russia, the tax rate will be 13 percent of the taxes received;
• For non-residents of the Russian Federation, the tax rate is much higher - as much as thirty percent of the profit received.

It is important! Resident and non-resident status is determined not only by citizenship. Thus, a Russian citizen can be recognized as a non-resident if he has a residence permit in another country. Or in the event that a citizen has been living in another country for more than 6 months. In turn, a citizen who has a residence permit in the Russian Federation can be recognized as a resident.

Only income from the sale of real estate is taxed. That is, the tax is not necessarily levied on the amount for which the real estate is sold. In this case, profit is recognized as the difference between the selling price and the purchase price, but only if the purchase price has been documented. If the documents are not preserved, then the entire amount that the seller received will be recognized as profit, but it can also be reduced (this will be written in the continuation of the article).

This video covers the main points of immovable property tax payments on a sale:

How to avoid paying property tax on a sale?

The tax on the sale of property owned for less than 3 years is levied on all citizens who made a profit from the transaction. Payments can be avoided in the following cases:

• If the seller did not receive any profit as a result of the transaction. That is, the price for which the property was purchased is equal to or less than the selling price. In this case, you will not have to pay income tax, since no profit was received. But only on condition that the seller has a document that confirms the value of the car (apartment, house) at the time of purchase. In addition, the amount that the owner has invested in it can be added to the value of the property, also subject to the provision of the relevant documents;
• If the profit from the sale of the car was less than a quarter of a million, that is, less than 250 thousand rubles. In this case, the seller has the right to use the tax deduction in the amount of 250 thousand ... Only one tax deduction is allowed per year. When selling a private house or apartment, the tax deduction will already be 1 million rubles, which is very significant. The deduction may not allow you to completely avoid payments (if it is more than 250,000 or 1 million, respectively), but it will help to reduce the amount of payments;
• If the property has been owned for more than three years (in some cases, more than five - as described above). In this case, the profit from the sale is not subject to taxation.

Submitting tax returns and paying taxes

The citizen is obliged to declare the profit received as a result of the transaction no later than April 30 of that year, which follows the year of the transaction (but not earlier than January 1 of this year). All transactions in which property owned for less than 3 (or 5) years was sold are subject to mandatory declaration. Regardless of the need to pay taxes.

All documents that confirm the fact of exemption from tax are attached to the declaration, and the amount of tax deduction is also entered. If the property is older than three (or five) years, then it is not necessary to submit a declaration by law. Tax payments to the budget are accepted until July 15 (only after filing a declaration).

Examples of various deals

1. The car at the time of purchase by the owner was worth half a million. 4 years have passed since the conclusion of the purchase and sale agreement. Since more than three years have passed, there is no need to pay real estate tax and submit a declaration.
2. The apartment was sold for ten million rubles. Information about its value at the time of purchase by the seller was not preserved. Three years have not yet passed since the deal was concluded. In this case, the seller, upon payment of income tax, has the right to apply a tax deduction of one million. Due to the lack of documents on the value of the apartment, the entire amount (that is, ten million) is recognized as profit. Using the tax deduction of one million, the profit on which the tax is paid is 9 million. The tax is paid precisely from this amount in accordance with the status of a citizen.
3. The owner decided to sell the private house two years after the purchase. He has preserved documents according to which the house at the time of purchase was worth ten million. The owner also retained documents confirming that additional money was invested in the house (half a million). The owner decided to sell the house for 12 million. That is, his profit was 1.5 million. When using a tax deduction of one million, the amount from which income tax will be levied on the sale of property will be only 500,000 rubles.