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How to receive tax deduction upon purchase of the apartment in a mortgage

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Mortgage products gain popularity: rates on loans decrease, income grows, and it becomes on credit more and more profitable to acquire housing. Besides the state helps to return a part of the paid money. Tax deduction on a mortgage allows to compensate up to 13% of the total amount of percent paid for any given premises. Such payment is not restricted to periods and can become good addition of the family budget by means of the state.

What types of tax deductions exist, than they differ among themselves? How does compensation of money happen under different conditions? Let's understand for what diagrams the benefit amount what methods of its design exist on what bases the failure in providing similar service is possible is calculated.


 What tax deductions on a mortgage happen 


Property mortgage tax deduction – the amount reducing tax volume on the acquired real estate or compensating the interest paid by the borrower to bank lender. This service is provided to the citizens of Russia and also the foreign persons living and working in the Russian Federation officially and paying income tax.

of

 of the Type of tax refund on a mortgage. 


1.  The basic or main tax deduction  compensating to the borrower a part of the personal income tax retained during purchase of an inhabited real estate object.

2.  The property tax deduction  on mortgage percent representing resetting of a part of percent of a loan from the tax inspection.

 of   Difference between types of payments is given below:   

1. What is included by payment? Basic payment – refund of tax paid upon purchase of the real estate; payment for percent – compensation of a part of the percent paid on a mortgage.

2. Interest rate of a residue. Basic payment – 13%; payment on – 13%.

3. Possibility of reimbursing. Basic payment – at a time; payment for percent – annually or at a time.

4. The maximum amount under making of a residue. Basic payment – 2000000 rubles; payment – 3000000 rubles.

5. The maximum quantity of the returned means. Basic payment – 260000 rubles; payment – 390000 rubles.

6. Total number of the compensated means. For both – 650000 rubles.


Combination of these types makes the property residue given upon purchase of the real estate in a mortgage. Making of such payment is admissible if the person submitting application has the certificate on the real estate and documents confirming taking of the credit.

If the cost of a living space makes less than 2 million rubles, it is authorized to citizens to receive the remains of funds on basic reimbursing for other real estate object. These conditions do not extend to a percentage residue.

the Rate can be compensated on the following credit products:

• according to the mortgage agreement with creditor bank;

• on a loan for purchase or construction of housing.

the Main condition is existence in the contract of specifying that the received money will be allocated for acquisition or construction of any residential real estate. If such specifying is absent, will be refused reimbursing.

Tax deduction from percent on a mortgage in 2018 can be made out both with basic tax reimbursing, and on separateness, depending on the client's wishes.


 Return of tax deduction when refinancing a mortgage 


When refinancing a loan the citizen has the right to claim for resetting of the percent which are calculated in case of payment of a mortgage to acquisition of a living space. Regardless of whether payments by former bank lender were made already, the new bank undertakes to return up to 13% on a mortgage loan.

of   In addition to standard documentation will be required to provide the following document package in the tax inspection:  

1. The former contract of crediting together with the extract showing the payment schedule.

2. The help from initial bank lender containing information on extinction of the mortgage agreement.

3. The contract of refinancing of the credit with the extract containing the new payment schedule on a loan.

4. Help from new bank about refinancing of the former contract with specifying of attributes of the former contract if this information is not displayed in the contract of refinancing.


If the new contract contains information that purpose of a credit product – refinancing of a former loan, at the tax inspection shall not arise questions. The residue on a mortgage will be calculated in the normal mode.

is Also desirable that the contract comprised the address of the acquired living space.
 In case similar information is absent, or the refinanced loan is not a mortgage or the purpose-oriented loan intended for purchase or construction of housing can be refused payment. 


 Return of a personal income tax upon purchase of share property 


How to receive a residue from percent on the mortgage taken together with other person? If the living space is share cost, the residue will be distributed in proportion to the volume of a share of the real estate belonging to any given owner. So, if to the person belongs 60% of a living space, will pay him 60% of the general percent of reimbursing.

the Principle does not depend on a relationship level: it works for strangers, for parents and children, for spouses. Any owner of a living space, regardless of that on which of them payment of means is issued can submit the application for reimbursing. It is forbidden to make exchange of shares of reimbursing.

of   For spouses type of reimbursing depends on tenure type:

 
• in case of share property the rule compensating the amounts to the owner of the real estate depending on his share of a living space works;

• in case of a common property the residue is distributed between spouses in proportion to distribution of a basic residue.


If one of spouses already made out on himself compensation of percent on other real estate, the second spouse will be able to receive no more than a half of a residue on the current living space.

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 Tax deduction for the insurance on a mortgage 


the Property residue on the percent which are calculated on a mortgage can be also added by payment for life insurance when signing the contract. The amount spent for insurance of life and health upon purchase of housing can be returned in the form of a personal income tax.

of   to claim for such reimbursing, it is necessary to correspond to the following conditions:  

• the insurance contract shall be signed for a period of 5 years;

• the cost of the contract is paid by the borrower;

• the borrower – the citizen of the Russian Federation;

• the person is employed, pays income tax.
If all conditions are met by
, the borrower will be able to return himself a part of the means paid for insurance of life and health.



 As is calculated return of a personal income tax on a mortgage? 


How to calculate a residue on the interest accrued on a mortgage? Everything is very easy. The state is capable to return to the borrower to 13% of the total amount of percent which were paid for a loan for the application moment.

Thus if the borrower paid 200 thousand rubles in the form of percent, he will be able to receive 26 thousand rubles.

the Maximum allowed amount of interest to a residue since 2014 is 3 million rubles. Thus, the maximum amount of a residue on percent on a mortgage cannot exceed 390 thousand rubles.

 Payment can be made for unlimited period: if the contract of a mortgage is signed for 25 years, the borrower will be able annually to receive contribution of interest paid on the credit at the moment. 


 How to receive a residue on percent of mortgage lending


Explicitly we will understand how to issue a residue for percent on a mortgage. Sum can be lump if the loan was completely extinguished, or annual if the loan is still paid.

Regardless of payment type a rate is 13% of total amount of the % paid on a loan  . Period depends on duration of the contract of a mortgage signed with bank lender and has no top level.

Exists 2 main methods of receiving a refund:

1. Through Inspectorate of the Federal Tax Service: the amount which is 13% on the paid mortgage interest is compensated upon termination of a year for which holding was issued. For example, payment of a personal income tax for 2018 will be made in 2019.

2. Through the employer: the amount is paid for all year, monthly. The employer does not retain a personal income tax until its value does not reach necessary percent on a mortgage residue.
we Will consider

in more detail what document package is required for each type of design.


Documents for tax deduction for the apartment on a mortgage to receive the tax deduction compensating the paid interest on a mortgage in the end of the year will be required to submit to of

 to Inspectorate of the Federal Tax Service the following document list:

• reporting 2-NDFL and 3-NDFL;

• passport of the citizen of the Russian Federation;

• request for compensation of money;

• the mortgage agreement with the lender;

• purchase and sale agreement or individual share;

• delivery-acceptance certificate of premises;

• an extract with confirmation of payment of interest.

 the Last help is given by the bank lender providing a credit product for real estate acquisition. Depending on concrete bank it can be made out from 2–3 days to one month and also be assessed with an additional fee. 

of

 Design of a property residue through the employer 

it is possible to Compensate costs on the credit taken on purchase of the real estate on the current work location. The employer will calculate money monthly, selecting them from the amount leaving on payment of a personal income tax.

of   the Required documents for a residue on the interest accrued on a mortgage are as follows:

 
• the help certifying the right to reimbursing;

• certificate on ownership of premises;

• DKP or DDU on the real estate;

• request for compensation of money;

• banking mortgage agreement.

Documentation moves to the chief accountant of organization of times in 12 months. For payment it is necessary to take annually from the lender the help displaying necessary payment of interest and to hand over it in tax administration.

  If the employee works as  at the current place less than half a year, can refuse to it payment.    by


 to Whom did not put a residue for the apartment? 


  from percent on a mortgage it is impossible to claim For return of tax deduction in such cases:
 
1. Absence of official operation. The unemployed, receivers of "grey" salary, freelancers, workers treat group at home. They I do not pay a personal income tax from the salary and have no insurance experience therefore cannot require payment of interest.

2. An occupation business activity with the under taxation. Relevant for the individual entrepreneurs and legal entities which are engaged in small business.

3. Acquisition of a living space at the expense of government grants: maternity capital, a military mortgage within NIS, subsidies for young or large families, veterans and disabled people, orphan children aged up to 24 years.

4. Receiving in the legal property of the inhabited receiving paid by strangers: employers, friends, distant relatives, partners with whom do not consist in official spoilage.

5. Receiving a residue on the accrued credit interests on the same living space or on other inhabited object.

6. Existence of the closely related, dependent or official relations with people from whom the considered real estate was acquired. It can be family members, trustees, employers.

7. Finding is in the decree. An opportunity to issue a personal income tax residue on percent of a mortgage will appear when the citizen comes to work again.

8. Minor age. Instead of the persons which did not reach majority, parents or official trustees shall be engaged in document creation.

9. Performing refinancing without specifying of data on the former contract, change of type of crediting with mortgage on consumer with null information that the loan undertakes on acquisition of housing.

 In addition, will not be given a residue on the interest accrued on a mortgage when using of the acquired living space for commercial purposes. 

 Subtraction of mortgage percent – the convenient function provided by tax authorities. It allows to return a small amount of the money spent for payment of the loan taken for the purpose of acquisition of housing. Total amount is not so big, but in case of the long payments it will be excellent help for the borrower.
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