Risks for the buyer if the apartment has been owned for less than 3 years

The apartment was received by will

If the apartment has been owned for less than three years and was received by will or inheritance, there is a serious possibility that the other heirs will not agree that one of them took the entire apartment into his own ownership and did not share it with them.

As a result, they may sue and declare the distribution of the inheritance incorrect/invalid. As a result, the seller loses ownership of the home and, logically, the purchase and sale transaction is also considered illegal.

The buyer is obliged to return the apartment and can demand money from the seller. The general principles here are similar to the situation described above. Simply put, you will have to return the apartment anyway, but demanding money will be problematic.

The problem can be solved by making sure that all other heirs also received the property of the deceased in proportion to the seller’s apartment and do not have any claims to it. It’s even better if the seller is the only heir.

This is important to know: Claim for recognition of ownership of an apartment due to acquisitive prescription

Risks of buying an apartment less than 3 years old

In all such situations, the matter comes to court. It is rare that sellers, defrauded investors or buyers agree to resolve the issue peacefully. If in such cases the seller or other person making a claim agrees to a peaceful settlement of the issue, for example, by making an additional payment, then most likely this is the work of scammers. After all, most buyers do not want problems in court, considering this a useless action. Lack of legal knowledge of individuals forces them to become victims of scammers.

In any case, problems arise with a recently purchased apartment or claims are made by third parties, you must immediately go to court. Usually, this is the only way to retain your rights to an apartment or to return the money paid for it.

Undervaluation of housing

Despite the fact that the two above-mentioned problems are absolutely real, in practice they are much less common than understating the value of housing under a purchase and sale agreement. This may be relevant if, for example, the owner received an apartment as a gift from close relatives and wants to sell it in such a way as to minimize the amount of taxes or not pay them at all.

The fact is that when selling an apartment that has been owned for less than 3-5 years (depending on how the owner got it), you need to pay personal income tax in the amount of 13% of the sale amount minus the tax-free minimum (one million).

In order to avoid paying taxes or at least reduce their size, sellers deliberately underestimate the price of the apartment in the contract, but in fact the settlement between the seller and the buyer is made at the full cost.

Not only is such an operation itself quite dubious, but it also adds the risk that the seller will recognize the transaction as invalid. For example, on the grounds that he incorrectly valued the apartment or even sold the property without understanding its true value (being in an incapacitated state, and so on).

In such situations, the court most often sides with the seller. As a result, the buyer is obliged to return the property to the previous owner, and in return receives not the entire cost that he paid, but only 1 million specified in the contract.

There are practically no ways to solve the problem. A receipt will help in part, indicating the full amount of payment, but this document is given to the seller and is usually drawn up in one copy. It is logical that the seller can simply state that he did not receive any receipt.

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Has the apartment been owned for less than 3 years?

literally means that the owner registered ownership of the property less than 3 years ago. Those. from the date of issue of the Certificate of State Registration of Rights, a full 3 years have not yet passed.

“Fresh property” is an essential condition for the purchase and sale of real estate . The seller is subject to tax (personal income tax 13%), and the buyer may face unacceptable risks.

If the seller received property under a gratuitous agreement (for example, privatization, gift or inheritance), then he has the right to a tax deduction of 1 million rubles. If the property right is more than 3 years old, then the seller has the right to a tax deduction equal to the value of the property sold.

What can be dangerous about buying an apartment less than 3 years old: buyer’s risks

The real estate market is a large organized system with its own rules, laws and professional participants. An ordinary person, acting as a one-time buyer, is often assigned the role of a victim in various fraudulent transactions. How to avoid mistakes and how not to fall into the web of scammers and unscrupulous sellers? Read more about this.

Firstly, this procedure itself will take quite a long time.
Secondly, a dishonest seller is unlikely to immediately return the money, and debts in our country can take years to collect.
And thirdly, all these problems can be easily avoided by carefully checking the history of the property.

You refuse the deal if the owner is not able to provide you with a complete package of documents. This is a typical sign of a fraudulent scheme.
Try not to buy housing from third parties acting under a power of attorney. As a last resort, require the presence of the owner at the conclusion of the transaction.

What is the tax for ownership less than 3 (or 5) years?

The seller must pay personal income tax (NDFL) of 13%. The tax base is the difference between the costs of purchasing a property and the cost of its sale. If the property has been purchased, the seller may indicate the cost of the purchase agreement in the costs of purchasing the property and add the costs of the mortgage and the costs of improvements made. Expenses must be documented.

As you already understand, the situation where sellers expect to receive a 1 million tax deduction for each share is fundamentally incorrect and foreshadows conflict situations at the end of the tax year.

In Moscow, with a cost difference of 4 million rubles. the tax will be 520 thousand rubles. - a very significant amount for the seller. And very often, selling a property with “fresh ownership” involves various tricks. The main trick is to understate the cost of the apartment in the purchase and sale agreement to 1-2 million rubles. But apartments with reduced prices have low attractiveness in the eyes of the buyer, and can only be sold if the selling price is significantly reduced. On October 1, 2015, the Law “On Bankruptcy of Individuals” came into force, and the attractiveness of apartments with undervalued prices fell “to the plinth” .

The procedure for submitting documents to the tax authorities

In order to correctly process and pay income tax, it is necessary to draw up a tax return according to the model established by law (form-3NDFL). It indicates the basic registration data of the taxpayer, the amount of income received from the sale of the apartment and the amount of tax that must be paid. In this case, along with the declaration, you should collect and submit a package of documents that are necessary to verify the validity of tax payment. These include:

a copy of the passport of a citizen of the Russian Federation;
application for a property deduction (if this tax calculation option is used);
certificate for the apartment (certificate of ownership);
property purchase and sale agreement;
payment receipt or receipt from the buyer for receipt of funds;
copies of documents confirming expenses for the purchase of an apartment in the previous period (when using the “income-expenses” tax calculation method).

After checking all the documents and making a positive decision on the correctness of the declaration and calculation of the tax, the taxpayer needs to take the details to which the tax will be transferred. It is transferred only by non-cash method through any bank branch on the territory of the Russian Federation or branches of foreign banks located on the territory of the Russian Federation and having established powers. It will not be possible to pay personal income tax in cash, since such an action is prohibited for all taxpayers in the country.

In the case where the taxpayer is granted the right to be exempt from paying tax when selling an apartment (owned for more than three years or the tax is negative), he is not required to provide a tax return. This is indicated in paragraph 4 of Article 229 of the Tax Code of the Russian Federation, according to which income exempt from taxation may not be indicated by the taxpayer. But if an individual submits a package of documents, tax officials are obliged to accept and check it.

“Ownership less than 3 years old” literally means that the owner registered ownership of the property less than 3 years ago. Those. from the date of issue of the Certificate of State Registration of Rights, a full 3 years have not yet passed.

“Fresh property” is an essential condition for the purchase and sale of real estate

. The seller is subject to tax (personal income tax 13%), and the buyer may face unacceptable risks.

What are the risks of “ownership less than 3 years” for the buyer?

There are quite a lot of real estate properties with ownership less than 3 (or 5) years old on the market: these are all “yesterday’s new buildings” and houses in new neighborhoods, and these are apartments in the old housing stock. Moreover, if “yesterday’s new buildings” usually have a difference of up to 30% in cost, then for apartments of the old housing stock received as property free of charge (donation, privatization and inheritance), the difference in cost will be 70-95%.

The buyer's main risk when purchasing real estate is the recognition of the purchase and sale agreement as void . There is a “restitution” of the rights and obligations of the parties under the contract: the property is transferred back to the seller, and the seller is obliged to return the money received to the buyer. In addition, the party guilty of declaring the contract void shall reimburse the other party for the expenses incurred.

And if the property is returned to the seller, then in most cases a refund is impossible: the money has been spent, and the defendant’s income is minimal.

With the entry into force of the Law “On Bankruptcy of Individuals,” the risks when purchasing apartments with reduced prices have increased many times over. An additional circumstance that may arise within 1-3 years from the date of a real estate transaction is the possible bankruptcy of the seller , which, coupled with insolvency, greatly increases the financial risks of the buyer.

A more detailed discussion of the buyer’s risks and ways to minimize risks is discussed in the corresponding article - Risks when buying an apartment and minimizing them.

Risks when purchasing an apartment with a mortgage for less than three years of ownership

Good afternoon. My husband and I are planning to buy a two-room apartment with a down payment. We were approved for a mortgage and chose an apartment for RUB 1,830,000. The down payment is 600 thousand, the rest is for 10 years on a mortgage in Sberbank. The owner of the apartment says that the apartment has been owned for less than 3 years. I’ve been reading articles about buying such apartments and I just don’t understand what the risks and consequences are? Can you explain please!

According to Art. 2 of the Federal Law “On Mortgage (Pledge of Real Estate)” dated July 16, 1998 No. 102-FZ, a mortgage can be established to secure an obligation under a credit agreement, under a loan agreement or other obligation, including an obligation based on the purchase and sale.

Risks of purchasing an apartment less than 3 years old

The apartment has been owned for less than 3 years, the buyer’s risks when purchasing and how to reduce the risks when purchasing real estate, read the article!

Any sales and purchase transactions involving real estate that has been owned by the owner for less than three years are subject to a 13% tax on the income received by the seller.