When can parents receive a deduction for a child when buying an apartment?

28.05.2021

Parents (including adopted ones) have the right to a property tax deduction when purchasing real estate as their child's property. Adoptive parents, guardians or trustees also have the right to rely on it. This rule applies to any residential real estate: room, apartment, house or shares in them.

If you have already received a similar benefit, then you should not count on it a second time. After all, the deduction is “tied” to a specific person - the buyer. The fact that he spends money and registers an apartment in the name of another person (his child) does not matter.

There are exceptions to this rule. For example, if you did not fully use the deduction amount. In this situation, you have the right to receive it additionally. Moreover, the child retains the right to receive a property tax deduction in any case.

But before you start studying this material, we strongly advise you to read the article “What is a deduction and how is it used.” This will allow you to understand how the tax benefit mechanism itself works.

When is there a right to a deduction for a child?

First of all, find out whether you are directly entitled to the benefit. After all, as we said above, the deduction is “tied” to the one who receives it, that is, to you.

Here it is better to go from the opposite. That is, find out who does not have the right to use it. If you are not there, then you can get it for yourself, for the child, or for both yourself and the child.

So, you do not have if:

1. You have already used the deduction for residential real estate purchased before 2014.
2. You have already used the deduction for real estate purchased in 2014 and later, and you have completely used up its maximum amount - 2 million rubles.
3. The property you purchase is paid for entirely by a third party and you have no obligation to return any money spent. For example, if the apartment is paid for by the employer. Another option is full payment from state money (budget) or maternity capital. If the apartment is purchased using borrowed funds (for example, a mortgage), this point is not about you. You have an obligation to return the money to the bank.
4. The apartment was purchased from a person who is interdependent in relation to you. For example, the closest relative. The list of interdependent persons is in Article 105.1 (clause 2) of the Tax Code.

In all of the above cases, you do not have the right to a deduction. Therefore, you will not be able to get it for a child. If yours is not on this list of situations, then you have the right to count on it.

If you are married

Both spouses have the right to a deduction, so when buying an apartment, no matter who you register it for, claim two deductions. Both the wife and the husband can return 260 thousand rubles, since each has a limit of 2 million.

You can get 520 thousand rubles per family if your apartment costs 4 million rubles or more. If the apartment costs less than 4 million rubles, one of the spouses or both does not use the entire limit. Then you can return the balance when purchasing a new home.

There is an exception: if spouses purchased an apartment as shared ownership before 01/01/2014, then their right to deduction arose entirely from the property: the maximum payment will be 260 thousand per family. You cannot use the balance when purchasing a new home after receiving a deduction for such an apartment.

If you live in a common-law, unregistered marriage, you will not be able to get a double deduction.

Size and conditions of receipt

The procedure for obtaining a deduction for a child is prescribed in Article 220 (clause 6) of the Tax Code. As stated in this document:

6. The right to receive property tax deductions ... have taxpayers who are parents (adoptive parents, foster parents, guardians, trustees) and who carry out new construction or purchase on the territory of the Russian Federation at their own expense of a residential house, apartment, room or share (shares) in them, ... into the property of their children under the age of 18 (wards under the age of 18, children and wards recognized by the court as incompetent). The amount of property tax deductions in the case specified in this paragraph is determined based on the actual expenses incurred taking into account the restrictions established by paragraph 3 of this article.

Conclusions.

If the apartment is completely registered for the child, then the purchase costs are considered yours. Therefore, you receive the same benefits as if you were buying real estate for yourself.

If the apartment is registered in shares with a child, then the costs of purchasing his share are also considered your expenses. Therefore, your deduction will consist of two amounts: the costs of purchasing your share and the costs of purchasing the children’s share.

The deduction is equal to the total amount of expenses for the purchase of real estate or a share in it. But the law limits its maximum size. Regardless of the cost of the apartment (share), it cannot be more than 2,000,000 rubles. per buyer.

Example: An apartment is registered as the property of the wife, husband and minor child, ⅓ each.

Situation 1 Expenses for purchasing an apartment - 7,500,000 rubles. The cost of purchasing each share is 2,500,000 rubles. (7,500,000 x ⅓).

The cost of acquiring each share (2.5 million) is greater than the maximum deduction amount (2 million). Therefore, each parent has the right to claim a deduction in its maximum amount - 2 million.

Situation 2 Expenses for purchasing an apartment - 3,600,000 rubles. The cost of purchasing each share is 1,200,000 rubles. (3,600,000 x ⅓). The costs of the child's share can be divided between the parents or transferred to only one of them.

If they are divided equally, then each parent receives a deduction in the amount of: 1,200,000 + 1,200,000: 2 = 1,800,000 rubles.

Another option is also possible. For example, the father takes on most of these expenses (800 thousand) and receives the maximum deduction, and the mother collects the remaining amount.

In such a situation, expenses and the deduction amount are distributed as follows:

• father 1,200,000 + 800,000 = 2,000,000 rub.
• mother 1,200,000 + (1,200,000 - 800,000) = 1,600,000 rub.

Legislative acts

Since the purchase of an apartment is a property precedent, and a tax deduction in favor of the buyer is a tax benefit, the legislative acts include Civil and Tax Law, as well as special orders of the Government of the Russian Federation. Among them, the main ones can be identified:

1. Articles 624 of the Civil Code of the Russian Federation, 131 of the Civil Code of the Russian Federation determine the legal norms for registration of purchased real estate.
2. Articles 220 of the Tax Code of the Russian Federation, 222 of the Tax Code of the Russian Federation, announce general procedural norms: paragraph 6 of Art. 220 of the Tax Code of the Russian Federation, announces the admissibility of filing a tax deduction from the child’s share - to the parent (adoptive parent) or guardian;
3. paragraph 2 art. 220 of the Tax Code of the Russian Federation determines the admissibility and regulates the norms for the transfer of tax periods.

In addition to these sources, you should take into account the norms of Article 35 of the Family Code and Article 40 of the RF IC (if a marriage contract was drawn up).

For parents deprived of parental rights or limited in rights, the provisions of Articles , , and 39 of the RF IC come into force.

Persons who have lost parental legal capacity by a court decision do not receive benefits, including tax benefits, provided for this category of citizens.

When will the tax deduction amount be reduced?

You will receive a smaller tax benefit if:

• real estate costs less than 2 million;
• part of the real estate was paid for using maternity capital. In this case, the total amount of purchase costs will be reduced by mat. capital;
• you previously used part of the deduction. In such a situation, the maximum benefit amount (2 million) will be reduced by the portion already used.

Let's look at each of these cases in more detail.

Cheap real estate

If the apartment costs less than 2 million, then the maximum deduction you can count on is equal to the cost of the property (including the cost of purchasing a child’s share).

Example: A mother and a minor son buy an apartment worth RUB 1,750,000. According to the purchase and sale agreement, shares are distributed as follows:

• mother ⅔ worth RUB 1,166,667;
• son ⅓ worth 583,333 rubles.

The amount of deduction for the mother will be: 1,166,667 (her share) + 583,333 (son’s share) = 1,750,000 rubles.

The mother is left with an underused deduction amount in the amount of: 2,000,000 (maximum amount) - 1,750,000 (declared amount) = 250,000 rubles.

She can use it when purchasing another residential property in the future.

Maternity capital or budget money

If part of the apartment was paid for using maternal capital, then the total amount of purchase costs is reduced by this amount, which can be taken into account as part of the tax benefit. A similar rule applies when purchasing real estate using public funds, for example, subsidies.

Example: A mother and a minor daughter buy an apartment worth RUB 1,890,000. into equal ownership of ½ each. Maternal capital in the amount of 450,000 rubles was used to purchase an apartment.

As a result, the amount of expenses that can be taken into account will be: 1,890,000 - 450,000 = 1,440,000 rubles.

That is, the cost of purchasing each share will be 720,000 rubles. for each (1,440,000 x ½).

The amount of deduction for the mother will be: 720,000 (her share) + 720,000 (daughter’s share) = 1,440,000 rubles.

The mother is left with an underused deduction amount in the amount of: 2,000,000 (maximum amount) - 1,440,000 (declared amount) = 560,000 rubles.

She can use it when purchasing another residential property in the future.

The deduction has already been applied

The last case. Let's assume that you have already used part of the deduction before. You are left with only an underused part of it. You can use it when purchasing other residential real estate, including the property of children.

Example A father and a minor son buy a residential building for RUB 1,350,000. into equal ownership of ½ each. That is, the cost of purchasing each share will be 675,000 rubles. (1,350,000 x ½).

Previously, the father had already received a deduction and used its amount in the amount of 850,000 rubles.

The underused amount of the father's benefit is equal to: 2,000,000 - 850,000 = 1,150,000 rubles.

The total deduction for the father’s house will be: 675,000 (his share) + 475,000 (part of the cost of purchasing the child’s share) = 1,150,000 rubles.

Deduction when buying an apartment for a child, its essence, legislative basis and application features

The system of benefits involves significant sums that people who have just started living together do not need to pay into the state treasury, significantly depleting the already rather modest budget. Particular attention should be paid to the tax deduction as a system developed at the state level for returning part of the funds when purchasing an apartment. Otherwise, this mechanism can be understood as a reduction in the taxable base amount as a financial benefit.

Transferring benefits to the future

Of course, you know that the amount of the benefit reduces the income you received in the calendar year. If the income is less than the benefit, then its balance is carried over to the next and all subsequent years until it is fully used.

Depending on the size of your annual income, the procedure for obtaining a deduction may take several years.

Example In 2021, you bought an apartment together with a minor child for RUB 3,850,000. You have the right to a deduction in the amount of 2,000,000 rubles. (this is its maximum size). Your income was:

• for 2021 - 530,000 rubles;
• for 2021 - 650,000 rubles;
• for 2022 - 850,000 rubles.

You have the right to receive a deduction in the amount of:

• 2020 - 530,000 rub. The balance carried over to 2021 is RUB 1,470,000. (2,000,000 - 530,000);
• 2021 - 650,000 rubles. The balance carried over to 2022 is RUB 820,000. (1,470,000 - 650,000);
• 2022 - 820,000 rubles. From this year there will be no carryover balance. The deduction was received in full in the amount of 2 million.

At this level of income, the deduction will apply from 2021 to 2022, that is, 3 years.

If the housing is registered for one parent and child

If you bought an apartment as a property with a child, you can receive a property deduction for both shares - for yourself and for the child. The child's consent is not required.

Example:

Expert opinion

Romanov Stanislav Semenovich

Lawyer with 8 years of experience. Specialization: criminal law. Extensive experience in protecting legal interests.

You bought an apartment for 2 million rubles and registered it in the name of yourself and your 12-year-old daughter. Even though you each own ½ of the apartment, you can get a tax break for the entire home.

As a result, 260 thousand rubles of overpaid personal income tax will be returned to your account (13% x 2 million rubles).

You bought a house for 3 million rubles and shared it with your minor son. You have the right to receive a tax deduction for your share - 1.5 million rubles and partially for your son's share - 500 thousand rubles.

Why can't you use the child's entire share? According to paragraphs. 1 clause 3 art. 220 of the Tax Code of the Russian Federation, the maximum amount of property deduction cannot exceed 2 million rubles. Therefore, you have the right to increase your deduction only within this amount.

Quick deduction service: personal income tax refund in 7 days, not 4 months!

What documents are needed to deduct the child’s share?

To receive a deduction, you need to collect a certain package of documents. Their composition depends on what kind of property was purchased. There are 2 options:

• finished apartment on the secondary market under a purchase and sale agreement (SPA);
• new building under an equity participation in construction agreement (DDU).

In addition, it is important how you receive the benefit. There are also 2 options here:

• at the end of the year at the tax office at your place of residence. In this situation, you will be refunded the overpaid tax;
• in the company where you work. In this case, income taxes will no longer be withheld from you.

In both cases, you need to collect an approximately identical package of documents.

Buying a share on the secondary market

The package will include:

• real estate purchase and sale agreement (RPA);
• an extract from the state register of real estate, which confirms the transfer of ownership from the seller to you and the child;
• payment documents for payment for real estate (seller's receipt when paying in cash or payment order when paying by bank transfer);
• child’s birth certificate (when purchasing real estate or a share in it for your own child);
• decision of a guardianship or court to establish guardianship and trusteeship (when purchasing real estate for wards).

Purchasing a share in real estate under construction

The package must include:

• agreement of shared participation in construction (DDU);
• act of acceptance and transfer of an apartment completed construction;
• payment documents for payment for a new building (receipt order when paying in cash or payment order when paying through a bank);
• child’s birth certificate (when purchasing a new building or a share in it for your own child);
• decision of a guardianship or court to establish guardianship and trusteeship (when purchasing real estate for wards).

Citizens can apply for compensation for children if:

• The child's share of housing is worth no more than 2 million;
• The apartment is registered in the name of the child and belongs to him partially or fully;
• Receipt of documents for apartments occurs when the child is under 18 years of age.

The child himself cannot take advantage of the provided deduction until he turns 18 years old. Only upon reaching the age of majority will he be able to fully dispose of both part of the housing and the tax deduction.

has undergone significant changes in recent years.

We will talk about these changes in this material. In particular, we will consider the following questions:

how to get a property tax deduction when buying a home by one parent and a child;

how to get a property tax deduction when buying a home by spouses and their child (children);

how to obtain a property tax deduction by parents when registering ownership of an apartment exclusively for the child;

does a child lose the right to a property tax deduction if the parent received a property tax deduction for him and

can a parent receive a property tax deduction for a child if he has previously received a property tax deduction.

In practice, there are quite often cases when

an apartment or house is purchased by parents together with their minor children,

or the ownership of an apartment or house is registered directly in the hands of the children.

How to get a deduction from the inspection

At the end of the year when the property was purchased and registered, you need to provide the tax office at your place of residence with an income tax return 3-NDFL, which indicates the amount of the deduction. It is accompanied by copies of the documents that are included in the package (see above).

If the declaration is submitted for 2021 and earlier, an additional tax refund application will be required (for information on how to prepare and fill it out, see the link). If you are filing a return for 2021 and later, the application is not required. Its text is included directly in the declaration.

Documents can be:

• transfer to the tax office or through the MFC (in person or through a representative);
• send by post with a description of the attachment (valuable letter);
• send in electronic form - through the Unified Government Services Portal or the taxpayer’s personal account.

Can an adult count on this again?

If a parent has already used his right to a tax deduction, having previously received it for another home, then he will not be able to receive it again for his child. Restrictions on receiving NV are established by paragraph 11 of Article No. 220 of the Tax Code of the Russian Federation .

However, there is one exception. If a parent wants to receive an income tax for the same apartment for which he received a deduction (regarding the share of housing), but was not aware of the possibility of receiving the remaining share for his child, then the law gives him such an opportunity.

To re-calculate, parents need to re-apply to the Federal Tax Service with an application and a package of documents to receive an NV for their child’s share.

How to get a deduction from your employer

At the end of the year when the property was purchased and registered, you need to submit copies of documents for the apartment to the tax office at your place of residence (see above). They are additionally accompanied by an application for receiving a special Notice of your right to a deduction.

Documents can be:

• transfer to the tax office in person or through a representative;
• send by post with a description of the attachment (valuable letter).

After you receive the Notification from the tax authorities, it must be submitted to the accounting department at your place of work.

Features of receiving

When you receive a deduction for yourself, you need to bring a standard package of documents to the tax office, which includes:

• application for a deduction;
• completed declaration 3-NDFL;
• papers confirming the purchase of an apartment (purchase agreement, deeds, if additional renovations were done in a new building, then the costs can also be taken into account, but there are some nuances there).

Download the application for personal income tax return (sample/form for 2021, recommended by the Federal Tax Service)

Download a free application form for personal income tax refund

3-NDFL for individuals:

If we are talking about a deduction for a child, then the parent must bring additional papers to the Federal Tax Service, namely:

• birth certificate (for each of the children, if you receive for several);
• agreement on the distribution of the minor’s share (concluded between the parents, after which it will no longer be possible to change the decision, so determine the most profitable option in advance).

You won’t have to re-draw up the agreement in subsequent years, and you won’t have to bring documents for the apartment. All that remains is to submit 3-NDFL. By the way, you can do this for the previous 3 years at once if you don’t want to go with documents every time.