Mortgage tax deduction - how to return 13% of the mortgage

Did you know that you can legally reclaim 13% of your mortgage?

This is possible, and how, what are the restrictions, what are the conditions for the return of funds and what needs to be done to return the invested funds, we will describe below.

How to take advantage of the tax deduction after purchasing a home with a mortgage

A tax refund, or tax deduction, is the amount by which the tax base for personal income tax (PIT) is reduced. Who is eligible for a tax deduction? - the right to it has anyone who legally works on the territory of the Russian Federation, whether it be a citizen of our country or a citizen of any state, while paying tax on the income of an individual.

How big mortgage tax deduction? In the case of the acquisition of housing, the tax deduction is equal to the amount of expenses for the acquisition of housing, the maximum it can be no more than 2 million rubles. When applying a tax refund, the amount from which income tax is calculated is reduced down to zero, in other words, the tax base for personal income tax is reduced. And, since the amount of tax decreases, then there is a paid surplus on personal income tax, this surplus tax will have to return to the payer.

Thus, any officially employed employee who pays income tax (PIT) from earned funds is entitled to a refund of the amount of income tax paid in the amount of 13% of the cost of housing acquired by him in a mortgage.

At the same time, the maximum amount that can be returned in this way is limited to 13 percent of the cost of housing of 2 million rubles, that is, when buying a more expensive apartment on a mortgage, you can return only 260,000 rubles. - the same amount as when buying an apartment worth 2 million rubles. But if the apartment you bought with a mortgage costs, for example, 1,700,000 rubles, then the tax refund will be considered as 13% of this particular amount. However, the remaining funds do not disappear, you can simply get them only from the next purchase of real estate. For example, you buy another apartment, and with this second purchase you will be able to take advantage of a tax refund of 13% of 300,000 rubles, that is, from the amount that remains from the maximum amount specified in the law, 2 million rubles.

What is the payment schedule for your tax refund? I must say, since we are talking specifically about the tax refund, the annual payment of the tax refunded to you in our case will not exceed the amount of personal income tax you paid for the last reporting year. Thus, when paying you the maximum amount of tax refund of 13% of 2 million rubles, that is, 260,000 rubles, the amount of tax that you paid last year will be considered, and if you paid tax for 75,000 rubles last year, then exactly 75,000 rubles will be returned to you, and the rest of the money will be returned in the following years until the full final payment.

How much mortgage interest paid can I get back?

I must say that the return of personal income tax is not the only way to return the funds spent on the purchase of housing. The second possibility would be loan interest tax deduction issued for the purchase of this property. This refund also has a maximum amount from which the refund is calculated. In this case, the maximum is 3 million rubles.

That is, you can return no more than 13% of three million rubles, that is, no more than 390,000 rubles, regardless of what was actually paid. In the case when the interest paid on the mortgage loan is less than 3 million rubles, then in In this case, the balance is not transferred to the next purchase, but simply destroyed or burnt out.

The return of paid interest on a mortgage loan can also be received only after the actual payment of this interest, and the name "return" clearly says this. When you have completely paid off your home loan, but have not received a full return on interest, you will receive the rest of the interest deduction, but only in the next year. This situation may arise when the individual's income is less than the deduction. The payment of the balance will be postponed until the refund is made in full.

What documents do you need to collect for the return of personal income tax

What documents must be submitted to receive a tax deduction?

• Passport (passport of a citizen of the Russian Federation or any other state, it does not matter)
• Help in the form 2-NDFL, which you can get in the accounting department at your place of employment
• Self-filled declaration 3-NDFL
• Documents - confirmation of your expenses for the purchase of an apartment, that is, a purchase agreement, checks, an act of acceptance and transfer of an apartment, receipts and payment orders.
• Mortgage agreement
• A certificate from the bank that issued you a mortgage loan on the amount of interest paid on the mortgage
• Certificate of ownership of the apartment
• In the case of not yourself, but, for example, children, you will have to show the degree of relationship. This can be done, for example, using a birth certificate.

When an apartment purchased with a mortgage loan is issued in equal shares for all family members, then all members of the family who work in the family receive a tax deduction. If the property is purchased for minor children, then the parents, even if they do not own the housing purchased on a mortgage, retain the right to a tax deduction in full.

There are two ways to get a tax refund: either through the tax office in a lump sum payment, or through the employer.

In both the first and second cases, you must first contact the tax office and provide the inspection with a complete set of supporting documents. Consideration of your application will last 2-4 months, after which you will be able to receive your refund in the total amount.

In the case of receiving a refund through your employer, the scheme is somewhat different. First, you will have to contact, as in the first case, the tax office in order to receive a notification from them that you have the right to receive tax deductions. You transfer this notice to the employer along with the application, after which personal income tax is no longer withheld from your salary until you fully receive the amount of tax deductions indicated in the notice from the tax office.

If during the year the tax deduction was not paid to you in full, you can receive the rest either in the tax year or next year according to the same scheme, re-submitting an application and a notification from the tax office confirming your right to tax deductions with the amount of the remaining payment to the employer at the beginning of the year.