Declaration 3 of personal income tax for the return of mortgage interest: how to fill out correctly

What is a tax deduction

The legislation of the Russian Federation offers preferential conditions for the purchase of real estate - an apartment, house, room, land plot, as well as shares of this property.

The essence of the benefit is that after purchasing and completing the transaction, you have the right to a partial refund of the money spent.

In order to get a tax refund for a mortgage, you must contact the tax authorities and declare your right to receive a tax deduction: fill out a 3-NDFL declaration and attach the accompanying documents.

What does the property tax deduction consist of?

Every month your employer contributes 13% of your salary to the budget - income tax. If we switch to the language of tax legislation, your salary is a taxable base, which can be reduced by the amount of the tax deduction. Due to this, the amount of monthly contributions to the budget is also reduced.

After applying the deduction, you, as a taxpayer, will have a surplus on the personal income tax paid during the year. You can choose one of the forms of reimbursement - receive the excess into your account or exercise the right not to pay payroll tax until the entire refund amount has been exhausted.

Today, the tax deduction for the purchase of an apartment and other real estate is 2 million rubles .

This means that you can return 260 thousand rubles (13% x 2 million) from the taxes that you have already paid to the budget.

If your annual salary is less than 2 million rubles, the property tax deduction can be spread over several years.

It is important to understand that the amount of your refund cannot be greater than the tax you paid for the same period. And the total tax deduction cannot exceed the cost of the purchased housing.

Example:

During 2021, your salary amounted to 1.5 million rubles. During this period, you (your employer) paid 195 thousand rubles to the budget. (13% x 1.5 million). In 2021, you bought a room for 500 thousand rubles. This means that in 2021 you have the right to file a 3-NDFL declaration and apply for a deduction for the entire cost of the purchased housing.

The calculation looks like this:

from 1.5 million rubles (your salary or, in other words, the tax base) 500 thousand rubles are deducted. (the cost of the room you bought - and as we remember, the deduction is up to 2 million rubles, but not more than the purchase amount). As a result, the tax base decreases and becomes equal to 1 million rubles. (1.5 million – 500 thousand).

This means that it was on this amount that you had to pay tax in 2019: 13% x 1 million rubles. = 130 thousand rubles. But since the declaration is drawn up next year after receiving ownership rights (in 2020), then in fact in 2021 you have already paid 195 thousand rubles in taxes. The difference should be credited back to your account. In total, for purchasing a room you will receive a refund of 195 – 130 = 65 thousand rubles.

We told above that tax legislation allows you to return up to 13% of 2 million rubles, that is, 260 thousand. But your return in the example above was 65 thousand. How to be? Is the remaining money going to waste? Fortunately, no!

For housing purchased after 01/01/2014, there is the right to transfer the balance of the tax deduction to the housing that you buy in the future.

In order to qualify for a property tax deduction, you must have ownership documents. When purchasing housing under a shared participation agreement, this is the Transfer and Acceptance Certificate. For housing purchased under a purchase and sale agreement, an extract from the Unified State Register is required.

How does the tax deduction work when purchasing real estate?

By applying for a tax deduction when purchasing real estate, you can get back part of the previously paid personal income tax. A deduction can be issued only after taking ownership (signing a transfer agreement) and only for tax periods (calendar years) following the purchase of housing. That is, you will get back some of the income taxes you paid in the years after your purchase. You cannot take advantage of the deduction for periods preceding the purchase of real estate. An exception is left for pensioners, who can transfer the deduction to periods in which they received income subject to personal income tax, but for no more than three years.

The maximum amount of property deduction when purchasing real estate is 2 million rubles (13% of this amount will be returned to you). That is, if you, for example, bought an apartment worth 3 million rubles, you can only claim 2 million rubles as a deduction. If the property you purchased cost less than 2 million rubles, the remainder of the deduction can be transferred to another purchase.

In the case of interest on credits (loans), the maximum amount to which a tax deduction can be applied is 3 million rubles.

You can apply for both of these deductions at the same time. In this case, the amount to be refunded when providing a deduction cannot be more than the taxes you paid for the year. However, you can get a deduction over several years by filing returns and claims for the deduction for the periods in which you paid income taxes.

There is no statute of limitations for obtaining a property deduction. But you can only declare it for the last three years (that is, you will get back part of the taxes paid for the last three years). For example, in 2021, you can apply for a deduction for 2021, 2018 and 2021 (if the property was purchased before 2017).

What is the main tax deduction for a mortgage?

Mortgage lending in Russia is becoming increasingly popular. And this is justified. Real estate is not getting cheaper, and it can be difficult to save up the entire amount to buy the apartment you like. Using borrowed funds is a convenient way not to postpone the purchase for many years, but to become the owner of your own home right now.

We would like to please you - if you have decided to take such a responsible step as buying an apartment on credit, tax legislation has provided preferential conditions for this option: a tax refund on mortgage interest.

Tax deductions when buying a home with a mortgage are:

• on the purchase price (basic);
• on interest paid.

The main deduction includes funds spent on the purchase of an apartment, house, land and other residential real estate. At the same time, it includes both personal savings and credit savings.

Above, we talked about the basic principle of calculating the property tax deduction - it is the same for purchasing housing with your own money and for purchasing with a mortgage. More detailed information is presented in the article “Tax deduction when purchasing an apartment, house, plot of land.”

To summarize:

• You must have an official place of work, a “white” salary and monthly contributions to the budget of 13% personal income tax. Or you have other sources of income from which you pay personal income tax. This could be, for example, income from rental housing.
• The maximum amount of tax deduction that you can receive when purchasing an apartment, house, land plot and other real estate is 2 million rubles. 260 thousand rubles are returned to your account. – 13% of the deduction amount.
• Claiming a tax deduction is allowed only after receiving a document of ownership. As mentioned above, for shared construction this is an Acceptance and Transfer Certificate, and for housing purchased under a purchase and sale agreement, this is an extract from the Unified State Register of Real Estate.
• You can contact the Federal Tax Service with documents for a personal income tax refund the next year after receiving the right to deduct.

What is the mortgage interest deduction?

When purchasing an apartment with a mortgage, you have the right to a tax deduction on the interest paid to the bank. All actual repaid interest is taken into account, but not more than 3 million rubles . Of this amount, 13% is returned to your account, that is, 390 thousand rubles. (13% x 3 million rubles).

These terms came into force on 01/01/2014.

Before January 1, 2014, the tax refund on the loan had no upper limit. What does this mean for the taxpayer? If your home was purchased before 2014, and you have not previously exercised your right to return personal income tax on your mortgage, you can receive a deduction in the full amount of the interest actually paid.

Example:

In 2009, you took out a mortgage loan in the amount of 14 million rubles. and bought an apartment for 17 million. From 2009 to 2021. paid the bank 5 million rubles. percent. The transaction was officially completed before January 1, 2014, so you have the right to claim a deduction equal to the amount of interest actually paid. As a result, 650 thousand rubles will be credited to your account. (13% x 5 million rubles).

Important point! If the cost of the apartment under the contract is lower than the amount of funds taken on the mortgage, then the tax refund will be calculated based on the actual cost of the apartment.

Example:

In 2010, you took out a mortgage for 17 million rubles. and paid the bank 6 million rubles. percent. At the same time, you bought the apartment for 13 million rubles, which is noted in the purchase and sale agreement.

The transaction was officially completed before January 1, 2014, so you have the right to claim a tax refund on the loan equal to the amount of interest paid. But since the deduction is provided specifically for the purchase of an apartment, it will include interest on 13 million, and not on 17 million rubles, that is, on the amount actually spent on purchasing the apartment.

The interest that will be deducted is calculated in proportion to the amount under the mortgage agreement and the actual purchase amount specified in the agreement.

When does the right to a tax deduction on mortgage interest arise?

The interest deduction, like the main one, can be claimed only in the year following the year of registration of ownership of the housing. If you received a transfer acceptance certificate (or an extract from the Unified State Register) in 2021, you can submit a 3-NDFL declaration no earlier than 2021.

It often happens that a mortgage agreement is concluded before receiving documents for an apartment. This does not affect the amount of the tax deduction for mortgage interest - the entire amount of interest you paid from the very first payment is included in the deduction.

Example:

In 2014, you took out a mortgage for shared construction of a house. Payment of principal and interest began from the first month of the mortgage agreement. You received the acceptance certificate from the developer in 2015, which means that your right to receive a tax refund begins in 2021. All interest starting from 2014 will be included in the calculation.

It must be remembered that only interest actually paid for past periods is included in the deduction. If your annual salary and the amount of taxes transferred are sufficient, you can immediately receive the entire main deduction. But the mortgage interest deduction is made only based on the total of your payments to the bank - annually for the previous year.

We recommend that you first receive the main deduction, and only then claim the interest deduction. Then you can get money in just a few years.

Example:

In August 2021, you took out a mortgage and bought an apartment for 3 million rubles. How your 3-NDFL declarations will be generated:

• 2018 – if your income is sufficient, you have the right to claim a full deduction for the principal amount – 2 million rubles. and receive 260 thousand rubles to your account at a time. In addition, you indicate the mortgage interest you paid from August to December 2017.
• 2019 – indicates the interest paid to the bank during 2018.
• 2020 – indicates the interest paid to the bank during 2019 and so on until the entire amount is exhausted.

What can be included in the cost of purchasing real estate to receive a deduction?

Actual expenses for new construction or acquisition of a residential building or share(s) in it, which can be claimed for a property tax deduction, may include:

• costs for the development of design and estimate documentation;
• expenses for the purchase of construction and finishing materials;
• expenses for the acquisition of a residential building or share(s) in it, including if its construction is not completed;
• expenses associated with construction work or services (completion of a residential building or share(s) in it, if construction is not completed) and finishing;
• costs of connecting to electricity, water and gas supply and sewerage networks or creating autonomous sources of electricity, water and gas supply and sewerage.

The actual costs of purchasing an apartment, room or share(s) in them may include the following costs:

• expenses for the acquisition of an apartment, room or share(s) in them or rights to an apartment, room or share(s) in them in a house under construction;
• expenses for the purchase of finishing materials and work related to the finishing of an apartment, room or share(s) in them, as well as expenses for the development of design and estimate documentation for finishing work.

Expenses for the completion and finishing of an acquired residential building or share(s) in it or the finishing of an acquired apartment, room or share(s) in it will be deductible only if the agreement provides for the acquisition of a residential building, the construction of which is not completed, an apartment, rooms or share(s) in them without decoration.

How to get a refund

You can receive a property deduction in 2 ways:

1. In the form of a refund from the tax authority: it will go to the bank account.
2. Without paying tax on the required amount: for some time, the employer will not withhold tax from the citizen, paying him 100% of the salary.

Most buyers prefer to return their money in cash, so this example will be discussed in more detail below. If the second option was chosen, it is necessary to submit documents from the tax office to the employer with a request not to pay wage tax.

You may also be interested in an article on how to pay off a mortgage with capital. Read an article on how to sell an apartment with a mortgage here.

You may also find this article about social mortgages in Russia useful.

As soon as the entire amount is returned in this way, taxes will have to be paid again. It is important to note that persons with unofficial income or individual entrepreneurs are not entitled to a tax deduction: the former do not pay taxes, the latter have separate discounts.

Buying an apartment: how much money will be returned if you submit 3-NDFL?

An individual who has spent funds on the purchase of an apartment has the right to expect a return of part of the funds spent in the amount of personal income tax paid (Article 220 of the Tax Code of the Russian Federation). But there is a limitation - only those individuals who work officially and pay income tax can take advantage of this opportunity.

The amount of personal income tax refunded depends on:

• the amount of expenses for purchasing an apartment;
• income tax paid on income earned by an individual.

You can return up to 13% of the cost of the apartment, but not more than the amount calculated from the maximum deduction allowed by the Tax Code of the Russian Federation (2 million rubles). Thus, the buyer of the apartment, who spent 2 million rubles on its payment. and more, 260 thousand rubles will be returned from the budget. (RUB 2 million × 13%).

If the apartment was purchased with a mortgage, the buyer has an additional right to receive a deduction for the amount of interest paid (in addition, personal income tax is returned in the amount of up to 390 thousand rubles).

To receive this money, you will need to report to the tax authorities using the 3-NDFL declaration and a package of supporting documents (more on this in subsequent sections).

Features of 3-NDFL for obtaining a deduction for mortgage interest

Each year has its own 3-NDFL declaration form. When applying for a deduction for interest on loans, they can be submitted for several years at once. For example, only after full settlement of the debt to the bank. In this case, declarations for the three years preceding the filing of the application will be required. It is during this period that the borrower will receive a tax refund. If the required amount is not reached, it will be transferred to the next tax period.

If an interest deduction is issued, you can apply for it every year, rather than wait several years. For example, if a borrower paid a loan debt in 2021, he can apply to the Federal Tax Service for a refund of mortgage interest. Even if there are still several years ahead of the full end of payments.

Help fill out 3-NDFL: where to start compiling

You can fill out 3-NDFL in several ways:

• use the electronic program on the Federal Tax Service website - the program itself will calculate the personal income tax based on the input data and check the correctness of filling out the declaration;
• turn to the services of special consultants - in this situation, you will not have to enter information into the cells yourself and count nothing, you just need to collect and make available to the consultant all supporting documents, as well as pay for his services;
• independently prepare all the papers for the tax office - our material will help you cope with this process.

NOTE! The declaration for 2021 must be submitted using the new form from the Federal Tax Service order dated 10/07/2019 No. ММВ-7-11/ [email protected] you can here.

To confirm your right to a personal income tax refund when purchasing a home, you must fill out several sections in the 3-NDFL declaration:

• title page;
• 2 sections (1st - containing information about tax, 2nd - with calculation of the tax base and personal income tax);
• 3 sheets (Appendix 1 - information on income received, Appendix 5 and 7 - calculation of standard, social and property deductions).

Let's consider the scheme for filling out 3-NDFL when buying an apartment using the following example.

Example

Vasiliev Nikolay Antonovich in 2021 purchased an apartment for 2,750,000 rubles using accumulated funds. The 2-NDFL certificate received from his employer indicates taxable personal income tax (13%) income for 2021 in the amount of 484,000 rubles. (Personal income tax withheld by the employer - 57,720 rubles).

Let us dwell in detail on filling out the 3-NDFL declaration when purchasing an apartment using the example data in the following sections.

How to fill out 3-NDFL if housing was purchased using maternity capital? The answer to this question is in ConsultantPlus. If you do not yet have access to the system, get trial online access for free and proceed to the material.

Preparation of 3-NDFL declaration sheets for the purchase of an apartment

Filling out 3-NDFL begins with special sheets - appendices 1, 6 and 7. The data reflected in these sheets is for informational purposes only:

• sources of income of the taxpayer (Appendix 1);
• the amount of property deductions (Appendix 6 and 7).

Appendix 1 contains a number of identical blocks (lines 010–080). For Vasiliev N.A. from our example, it is enough to fill out only 1 block, since last year he received income from 1 employer. If the taxpayer received income from several sources, for each of them it would be necessary to fill out a separate block 010–080 of Appendix 1.

To fill out the sheet, all data is taken from the 2-NDFL certificate, but you need to enter one more code correctly:

Code “07” means income received under an employment contract, tax on which is withheld by the employer.

Filling out Appendix 7 begins by indicating the encoded information (in the table, the codes are given based on the conditions of the example):

Further filling out Appendix 7:

• pp. 032-033 - reflection of the cadastral number and address of the purchased apartment;
• subp. 1.4–1.6 - entering information about the date of the document (deed of transfer of the apartment, certificate of state registration of ownership of the property);
• subp. 1.7 - share in ownership;
• subp. 1.8 - when filling out this line, Vasiliev N.A. must keep in mind that the amount of his expenses for purchasing an apartment (2,750,000 rubles) exceeded the allowable tax deduction of the Russian Federation (2 million rubles), therefore, in the cells of this line he you must indicate the number 2,000,000.

Of all the subsequent subparagraphs of the application, Vasilyev N.A. filled out subparagraph. 2.5, 2.8 and 2.10 (see table below):

What documents should I attach to 3-NDFL?

The package of documentation attached to 3-NDFL includes the following documents:

1. Proof of identity (copies of passport pages with personal data and registration).

2. Containing data on income received (original 2-NDFL certificate received from the employer).

3. Of an application-informational nature (an application for a personal income tax refund, including the payment details of the applicant’s account, to which the inspectors will transfer the tax).

You can view and download a sample application for refund of overpayment of personal income tax when receiving a property deduction for the purchase of housing in ConsultantPlus, having received trial access to the system for free.

4. Certified copies confirming the fact of purchase of the apartment and payment of its cost:

• purchase and sale agreement (or equity participation in the construction of a house);
• act of acceptance and transfer of housing;
• certificates of state registration of ownership of the acquired property;
• bills, payment receipts or receipts.

What documents confirm the right to housing in different situations - see the diagram:

New form 3-NDFL in 2021

Important news: a new personal income tax return form has been developed for 2021 - the new form can be downloaded from exce below.

Before filling out 3-NDFL, it is important to make sure that the current form is taken, otherwise there is a risk that the tax service will not accept the report.

The new current form was approved by Order of the Federal Tax Service dated August 28, 2020 No. ED-7-11/ [email protected]

In the new form, the barcodes have changed, some pages have been updated. However, the changes will more affect individuals filing a declaration in connection with income from business activities.

Citizens who bought an apartment and want to take advantage of the property deduction will not notice the changes. However, it is necessary to fill out the current version of the declaration. If registration is carried out through the program or in the taxpayer’s personal account, then there is no need to think about it. If filling out is done manually or on a computer without using special programs, then you should check in the upper right corner which order approved the form.

How to fill out 3-NDFL for mortgage deduction in the Declaration 2020 program - step-by-step instructions.

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Procedure for filling out the declaration

To determine the procedure for filling out the declaration, first of all, it is important to understand how to calculate the amounts that must be transferred, since the owner does this independently.
The law sets the deduction limit at two million rubles. That is, if the apartment cost four million, then the deduction will be received only from two million, and from the remaining two you will have to pay income tax. If the amount is less than two million, then you can add to it the costs of repair and additional construction work, if any. If a property deduction is possible in connection with the purchase of an apartment under a mortgage agreement, then there are two options for determining the amount:

• from the cost of the apartment, which amounts to up to two million rubles;
• from the amount of interest that was transferred over fifteen years, if it amounts to two million rubles.

That is, the procedure will also be general, the declaration will be filled out according to the same scheme as when buying an apartment without a loan, but the possibility of receiving payments is expanded due to several options for determining the initial amount.

The tax return, which is submitted to receive the due deductions for the purchase of an apartment, must be filled out in only three parts; other fields should not be filled in, otherwise the documents will have to be redone and submitted again.

Those components that are included in the structure of the tax return and are filled out for property deductions include the following:

1. Title page. It must contain information about the applicant.
2. First section. It includes several sheets, but only some will be filled out. Sheet A, which indicates the profit that the applicant receives. Sheet G1, where information about the deduction itself is recorded. Sheet I, which includes information about the apartment and its price.
3. Sixth section. It must contain the total amounts, that is, deductions determined by the applicant independently, taking into account the cost of the apartment and the interest rate.

Despite the presence of nineteen sheets in the declaration of the form in question, the remaining sections will not be filled out, since they are not related to the property deduction.

Thus, the tax return that is submitted when purchasing an apartment is mandatory, since it is necessary to pay tax on income, but it also allows the person to return part of the money that was paid. However, the law does not establish any restrictions on filing deadlines, with the exception of the duration of ownership of the purchased property.

Sample of filling out 3-NDFL

You can find many examples of filling out the declaration on the Internet. It is important to remember that starting in 2021 they have a new form. But it is not suitable if the deduction is made for previous tax periods.

The Federal Tax Service “Declaration” program presents forms for several previous years. If they are mixed up, a tax refund will not be issued. The declaration will need to be reissued.