In our last article, we examined the existing types of gift agreements, partially touching on the area of taxation when concluding a transaction. Therefore, it is not surprising that the author of the column on donations immediately began to receive questions regarding the tax when donating real estate to a non-relative.
A practicing lawyer at the Legal Ambulance , Oleg Ustinov, is not used to ignoring Dear Readers, and therefore, today we will tell you about all the features and pitfalls of such taxation in 2021.
Legislative grounds
Many Russian citizens see the procedure for donating real estate as a completely free transaction, during which the donor has no right to demand any funds or services from the recipient. However, this nature of gratuitousness applies exclusively to the parties receiving and receiving the gift, but not to their relations with the state.
Like other similar gift methods of alienation of property, the donation procedure is subject to taxation. At the same time, the amounts and total amounts of taxes collected from a donated apartment, house or land plot largely differ from certain factors, including the status of the donee (for example, whether the person receiving the gift is a third party, relative, legal entity, etc.) .
For free! What is the tax on a gift agreement?
Another way is donation. It is used if the transaction is between relatives, but not close enough to exclude tax. In this case, the donation occurs from one close to another. As a result, the property reaches the person for whom it was intended. This scheme is, in general, legal, but do not forget that each subsequent registration of an agreement and transfer of ownership rights requires the payment of a state fee. Of course, this amount will be less than the 13% tax, especially when it comes to real estate.
Is gifting of real estate taxable?
Let us immediately note that in relation to real estate, a deed of gift is one of the types of transactions in which the owner of the property transfers ownership of it free of charge to the donee at the time of signing and registering the agreement or at a certain time, which must be indicated in the contents agreement.
Expert opinion
Oleg Ustinov
Practicing lawyer, author of the website “Legal Ambulance”, one of the co-founders of the “Our Future” foundation.
According to the existing legislation of the Russian Federation, receiving real estate as a gift is income, that is, it is characterized by a benefit (monetary or in kind) for the person who receives this object into ownership.
Thus, the legislator recognizes as income the benefit that the recipient received without spending his own funds on the object. Simply put, a person receives the desired property without allocating money for it and thus saving his money, saving it for future spending.
After registering the donated apartment or house in the Unified State Register of Real Estate and obtaining ownership rights, the new owner, in accordance with Article 217 of the Tax Code of the Russian Federation, namely, paragraph 18.1, does not have to pay the established tax only in 2 cases:
- The gift agreement was concluded between persons who are classified as close relatives or family members.
- Consular employees and members of their families are not subject to tax (according to the terms of the Vienna Convention on Diplomatic and Consular Relations).
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All other new property owners will have to pay tax.
Taxation of an apartment donated to a non-relative
The first question of people who are offered to receive an apartment, house, garage, dacha or any other real estate as a gift, whether from strangers or acquaintances, is whether they need to pay tax to a non-relative who received an apartment as a gift? As we have already mentioned, a deed of gift for such an object creates an obligation for the recipient individual to pay income on profits, after which the person receives ownership upon registration and can dispose of the gift at his own discretion (donate, sell, etc.).
In 2021, there are still no benefits for the payment of this tax by non-relatives. At the same time, very often unscrupulous citizens try to reduce the actual amount of taxation by covering up the gift purchase and sale transaction, allowing them to receive a tax deduction from the purchased real estate. But, if such a fact is disclosed, the transaction is considered void.
Donating real estate to relatives: what are the differences?
But who definitely doesn’t need to worry about taxes when accepting real estate as a gift is the relatives of the donor! But, in order for this condition to apply to the parties to the transaction, both the donor and the donee must be included in the category of close relatives, the list of which is established in the Family Code of the Russian Federation, namely in Article 3.
According to the norms established there, the following are exempt from tax on a donated apartment:
- grandparents, and grandchildren;
- brothers, sisters (both full and half-blood);
- adopted and natural children, as well as their parents.
Other relatives (uncles, aunts, as well as cousins and brothers) are required to pay income tax, equal to non-relatives.
At the same time, although a close relative does not pay tax and does not fill out the corresponding 3-NDFL declaration, but, according to the norms of the Tax Code of the Russian Federation, he is obliged to pay property tax on the property received as a gift.
Giving to a stranger
As you know, income received in cash and in kind as a gift is exempt from income tax . An exception to this rule is when receiving real estate, vehicles, stocks, shares and shares as a gift. When strangers receive such gifts, they become obligated to pay 13% personal income tax if the recipient is a tax resident of the Russian Federation, and 30% personal income tax if the recipient is not (Article 224 of the Tax Code).
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Taxation on gifts
So, we found out that, according to Article 228 of the Tax Code of the Russian Federation, namely paragraphs 7, 1 and 2, non-relative donees must pay gift tax after signing the deed of gift and registering the ownership right.
Each citizen must handle tax calculations and payments independently. In case of non-payment, penalties established by current legislation may be applied.
Current tax rates for gifts of real estate in 2021
Today, tax rates when concluding a gift agreement are:
- 13% - for residents of Russia;
- 30% - for non-residents of the Russian Federation.
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Citizens who live in Russia for more than 183 days are recognized as residents of the state.
At the same time, not only Russians, but also citizens of other states can act as residents! This category may also include stateless persons who live in the Russian Federation, as well as persons who have a residence permit in the country.
As you can see, even our compatriots who live abroad most of the time will be considered non-residents of the Russian Federation.
How much are taxes charged?
With regard to the amount of tax on gifted real estate, the legislation today provides for several important rules that every donee needs to know. So:
- the tax is charged on the total market value of the property;
- in the case of a gift, a tax deduction is not provided for a non-relative;
- persons using social benefits under other types of taxation are required to pay the gift tax in full;
It is worth noting that the Tax Code of the Russian Federation does not specify a package of documents that are taken as the basis for determining the actual value of gifted property for calculating tax.
Lawyer's Note
Experts say that, undoubtedly, such papers may include reports obtained as a result of an independent examination or information about the cadastral or inventory value of an object, which can be obtained from the BTI.
The best option for a non-relative would be to pay tax on the market value of the apartment. This approach will help avoid litigation and accrual of arrears.
Rights of the donee
The following tax consequences occur on the donee’s side:
- according to the gift deed itself;
- after the sale of the donated real estate;
- after buying a new apartment with money from the sale.
Let's consider all these situations in more detail.
After the donation transaction
Immediately after receiving the apartment, the recipient has income that is subject to personal income tax. Income is measured by the price of living space, which the parties indicate in the contract, cadastral or inventory value. From this price you need to calculate 13%. The resulting number will be the amount of tax that must be declared by April 30 and paid to the budget by transfer by April 15.
At the same time, tax deductions by analogy with the seller are not provided for under the DCT. If the seller can reduce the income from the sale by a fixed or expense amount, then the donee does not have such an opportunity. He will definitely have to pay personal income tax on the full cost of housing.
IMPORTANT! When making a gift, a recipient who is closely related to the donor is exempt from personal income tax. This is a spouse, parent, child, grandparent, grandchild, grandchild, brother or sister. Relatives with a greater degree of kinship are not included in this list.
Example. Alexander Petrenko gave his nephew real estate worth 1,200,000 rubles. The nephew calculated the amount of tax: 1,200,000 * 0.13 = 156,000 rubles. The tax amount is large, but it cannot be reduced, since deductions are not provided.
After the sale of the donated living space
Personal income tax of 13% will have to be paid if the property is sold before the expiration of the statute of limitations for ownership.
- 3 years – for premises donated by people from a circle of close relatives.
- If the housing was donated by a person who is not a close relative, then 5 years.
To reduce the tax amount, the seller has the right to apply a deduction. To do this, you need to subtract 1,000,000 rubles from the amount received under the monetary policy - a fixed amount. The expense option is not applicable, since the seller had previously not purchased the apartment, but received it by gift.
Example. Lyudmila Ivashutina received an apartment from her grandmother under a gift agreement in 2021. In 2021, she decided to sell it for 1,750,000 rubles. The statute of limitations for possession of Lyudmila is 3 years. It has not expired by the time the policy agreement is concluded, so you will have to calculate and pay the tax. For this, Lyudmila has the right to use a fixed legal deduction of 1 million rubles. The personal income tax calculation will be as follows: (1,750,000 – 1,000,000) * 0.13 = 750,000 * 0.13 = 97,500 rubles.
After purchasing a new property with money from a gift
If, after selling the donated housing, a citizen buys another, he will be able to return 13% of the expenses from the budget. The maximum you can claim is a deduction of 2 million, and return 260 thousand.
Additionally, if the purchase is made with credit money, you can receive a deduction for mortgage interest. Maximum 3,000,000 rubles deductible and 360,000 rubles refundable.
IMPORTANT! It makes no difference what money was invested in the purchase of living space - from donated property or from any other property, and whether tax was paid on it or not. It is the fact of purchasing housing that has legal significance. An additional condition is that the tax refund must not be exhausted. It is provided to everyone once until the maximum amount is exhausted.
Example. Maxim Vasilenko’s parents gave him an apartment in 2016. In 2021 he sold it for 2 million rubles. He was exempt from personal income tax on the sale, since the period of ownership was 4 years; he did not need to submit a declaration. In the same year, he invested the proceeds from the sale into the purchase of a new apartment for 3,000,000 rubles, taking out 1 million as a mortgage. Starting in 2021, Maxim will be able to submit documents for a tax refund from the purchase of a home. He will return 260 thousand (13% of the maximum amount of 2 million) directly from the DCT, and will additionally be able to receive compensation for the mortgage interest paid.
Documents for filing the 3-NDFL declaration
Our regular readers probably know that in such transactions, the 3-NDFL declaration alone is not enough. And that's true. To pay gift tax for third parties, you must not only fill out the declaration correctly, but also attach the following documents to it:
- passport of the donee (new owner of the property);
- real estate donation agreement;
- payer's TIN;
- a document confirming acceptance of the gift (for example, an extract from the Unified State Register of Real Estate);
- act of acceptance and transfer of real estate, if one was issued (optional);
- a document that confirms the specified value of the gift (for example, a certificate from Rosreestr on the amount of the cadastral value can serve as such).
This is a mandatory package of documents, but, as a rule, tax officials do not require other documents from the payer.
Payment procedure and responsibility
Let us immediately note that in 2021 no important changes were introduced in the taxation of donated property and the procedure for paying personal income tax remained the same as last year.
To pay tax, a non-relative payer must:
- independently calculate the actual amount of personal income tax, guided by the total price of the real estate donated to him;
- correctly fill out and submit the declaration to the Federal Tax Service by April 1 of the year following the year the gift was accepted;
- pay the tax amount by July 15 of the year following the year of acceptance of the object as a gift.
In 2021, all this is much easier to do than before. For example, to correctly fill out the declaration, you can use the nalog website. ru .
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Responsibility for failure to fulfill these duties in a timely manner or for ignoring them is established:
- if the payer has not filed a declaration and has not paid the tax, according to the Tax Code of the Russian Federation, namely Article 119, an individual may be fined 5% of the total amount of tax due for payment (monthly, but not more than 30%);
- a penalty for late tax payment will be added to the amount of fines;
- if the declaration was submitted by the payer on time, but the personal income tax payment was made with a delay, no fine is charged, but instead a penalty is imposed, the amount of which is 1/300 of the refinancing rate of the Central Bank of the Russian Federation daily.
In any case, receiving real estate through a gift, even taking into account the mandatory payment of tax for non-relatives, is a very profitable deal for the recipient. At the same time, according to current legislation, the donee may refuse to accept the gift until the real estate is registered and ownership rights to it are obtained.
If the donee wants to take ownership of the property, he needs to approach this issue (paying income tax) with all responsibility in order to avoid penalties and fines.
Tax payment procedure
The procedure for paying the above tax occurs differently for residents and non-residents.
Tax payment scheme for residents:
- Conducting a donation transaction.
- Establishing the value of real estate.
- Registration of ownership of donated property with a special government agency.
- Filling out an income tax return, submitting it to the tax office, and waiting for a receipt to arrive in the mail, which will indicate how much you need to pay and to what details.
The tax payment scheme for non-residents is almost the same as for residents, only there is one nuance. It must be paid before the registration of ownership of the donated property. After the transaction has taken place and the property has been assessed, the non-resident submits a tax return and pays the tax. And after that it registers its ownership.
List of documents required for submission to the tax office:
- citizen’s passport or other document (if the person is not a resident);
- gift agreement and deed of transfer of property (if any);
- cost estimate (or cost document from the BTI);
- tax return indicating the value of the property.
Exceptions
However, even the most strict rules have exceptions. Although in legal practice they are quite rare. So, the tax on a gift to a non-relative of real estate is a mandatory payment paid in full by the donee. At the same time, even pensioners and other citizens enjoying social benefits must pay the tax in full.
Important
But, there is one exception, which, unfortunately, does not apply to us - ordinary citizens.
Thus, according to the terms of the Vienna Convention, consular employees, as well as members of their families, are exempt from mandatory taxation when receiving real estate as a gift. It is not surprising that this exception is used extremely rarely in the Russian Federation.
