A fairly large number of questions are raised by the amount of personal income tax on the sale of real estate such as a house. And if this house is also sold together with a plot of land, then difficulties and questions cannot be avoided. Therefore, it is necessary to understand this issue not only in order to be literate and understand tax law, but also in order to correctly calculate the amount of tax that should be paid when selling a house along with a land plot.
How is tax calculated on the sale of a house with land?
In order to avoid tax penalties and pay the correct amount of tax on the sale of a house with land, you need to know exactly how to calculate such a tax.
First of all, the tax on the sale of a house with land is a tax on the income of individuals. That is, by selling a house, the owner receives income, which is taxed to the state budget. This is a kind of obligation to the state.
Income tax rate(it is paid regardless of the status of the individual who sells the house with land) for 2015 it is 13%. It would seem that you can simply add up the prices of the house and land that are being sold, subtract 13% from the tax base and pay this tax amount.
However, in reality, there are certain benefits in tax legislation, as well as nuances that you should pay attention to if you do not want to overpay. In order to correctly pay the tax on such a sale, you must initially determine the tax base, and apply the tax rate to it.
Since the house and the land plot are separate objects of ownership, there is a separate title document for each of them, then purchase and sale agreements must be drawn up separately for the house and separately for the plot of land. Thus, for each object of property rights, its own taxation rules will be established. That is, a rate of 13% is applied separately to the land plot and separately to the amount of the sale of the house. In addition, the deduction and the period of time during which these items were owned must be taken into account.
The legislative framework
The main legal acts regulating legal relations in the process of transferring ownership of a house with a land plot by drawing up a purchase and sale agreement are:
- Civil Code.
- Tax Code (in particular, Article 220).
- Land Code.
The period during which the land plot belonged to you
The main feature of paying this tax is taking into account how much the object of taxation belonged to the owner by right of ownership.
In cases where the land plot belonged to the owner for a period of time less than 3 years, then in the process of selling it, he may well take advantage of his right to a tax deduction. The amount of this type of benefit is determined directly by law and is 1 million rubles. That is, for example, a plot of land is sold for 4 million rubles. Such an owner has the right to take advantage of a tax benefit in the form of a deduction in the amount of 1 million rubles. As a result of such an operation, his tax base will be only 3 million rubles and, accordingly, a rate of 13% will be applied to this figure.
If this plot of land has been owned for more than 3 years, then the state grants the right to a tax deduction, which is equal to the amount of sale of this object of ownership. That is, if the owner owns a land plot for more than three years, then when selling it there is no need to pay personal income tax on it.
In case of sale of a residential building owned for less than 3 years, The state provides for the possibility of a tax deduction, the amount of which is also 1 million rubles. That is, when selling a house worth 2.5 million rubles, the ownership of which arose no earlier than three years ago, the owner has the right to a tax deduction. The tax base will be equal to 1.5 million rubles in this case.
It is also important to draft both purchase and sale agreements correctly.
Due to the fact that both the house and the land are separate objects of taxation, they will be separately subject to tax benefits, that is, tax deductions. With a correctly drawn up agreement and tax return, you can significantly reduce your expenses associated with paying this tax.
Required documents
To pay tax you must submit the following documents:
- Income declaration (must be completed at the end of the year in which the sale was made).
- Passport.
- Contract of sale.
- Application for granting the right to tax deduction (if necessary).
- Documents confirming the existence of previous ownership of the sold objects (the tax service may be interested in transactions as a result of which taxes were not paid, so it may be necessary to prove the right to deduction).
Where to contact
To pay personal income tax on the sale of a house with land, you must contact your local Federal Tax Service office. That is, the tax authority, which is located at the place of residence.
Fines
When paying taxes on the sale of land and houses, you must remember the deadlines for payment and submission of relevant documentation to the tax authorities. Failure to carry out the above actions in a timely manner may result in the accrual of a fine.
If a taxpayer fails to submit reports for the relevant tax period on time, he will be subject to a fine of 5% of the tax amount.
This fine is accrued from the first day of delay and can reach 30% (the maximum amount of the fine).
Thus, in order to sell a house with a land plot and pay the appropriate tax on this transaction, it is necessary to carry out the following actions:
- Draw up 2 separate purchase and sale agreements: for the house and for the land.
- Find out whether the owner has the right to a tax deduction for each of the objects.
- Contact your local tax office.
- Submit the appropriate documents to pay taxes.
- Apply for the right to take advantage of the tax deduction.
- Receive a tax receipt.
- Pay personal income tax on the sale of a house with land.
It is also necessary to remember that the tax rate is 13% of the tax base, and also that the main criterion for the presence or absence of the right to a tax deduction is the period during which the real estate being sold is owned by the given owner.
According to the standards established by law, any income received by individuals is subject to tax. It represents 13% of the total cost specified in the property transaction agreement, minus 1 million rubles. When registering a house with a plot, questions often arise related to the nuances of title ownership of the land on which the house is built. The land plot may belong to the real estate seller with the following rights:
- property;
- lifelong inheritable ownership;
When selling a house, the plot can be transferred for consideration only if the ownership is officially registered. In other cases, the land is transferred to the buyer, following the fate of the capital structure. In this case, it is not allowed to receive payment for the land, and at the same time, the established tax is not levied on the sale of the land plot.
It is worth mentioning maternity capital and its features when buying and selling a house with land. More information about this can be found in.
If a lot is owned, the owner may be exempt from sales tax if:
- it has been owned for more than 3 years;
- its cost is less than 1 million rubles.
At the same time, it is unacceptable to draw up separate civil contracts for the sale of a house and a land plot located under the house, even when the plot is owned. This action could reduce the value of the property specified in various contracts, but selling a plot with an erected capital structure is not allowed. It is also not allowed to sell a permanent structure erected on a plot without re-registration of the land.
Accordingly, the value of real estate, which is a house and a land plot, is calculated cumulatively. The real estate sales tax is calculated from this total value.
The legislative framework
The provision for payment of tax on the sale of a house with a lease is regulated by the provisions of the Tax, Civil and Land Codes:
- According to Article 130 of the Civil Code of the Russian Federation, real estate in the form of capital buildings and plots refers to property subject to tax outside the status of the owner. Based on this, payments are also made to those categories of persons who are entitled to receive benefits on other grounds.
- The provisions of Articles 208-210 and 224 of the Tax Code of the Russian Federation determine the tax base, rate, and conditions for canceling its accrual.
- The standards of Article 391 of the Tax Code of the Russian Federation allow for a reduction in payments by 10,000 rubles for certain categories of citizens.
- Article 207 of the Tax Code of the Russian Federation regulates accruals for non-residents of the Russian Federation.
- Article 288 of the Tax Code of the Russian Federation determines the timing of the tax period.
Before you start calculating the amount of tax paid on the sale of a HOUSE WITH LAND, you may be interested in knowing how the same tax is calculated, only on the sale of ONLY LAND - read about it.
How to calculate and pay sales tax?
Information is received by the local branch of the Federal Tax Service directly upon registration of a civil purchase and sale agreement. The cost of the object involved in a property transaction is necessarily reflected in the contract. This amount received by the seller of real estate is the base amount for calculation. Naturally, inspectors will conduct their own recalculation to verify that there are no arrears when paying taxes.
Besides, information about the presence of registration on the territory of the Russian Federation is transmitted to the Federal Tax Service inspection. The inspectors are interested in the following fact:
- whether the seller is a foreigner or stateless person;
- whether it was registered earlier than 98 days before the transaction.
Such information is important in order to increase the tax rate from 13% to 30%.
Citizens provide the remaining information that cancels the payment of tax on their own.
These include tenure of the sold property. If it has been owned for more than 3 years, the seller is only required to submit an application for exemption from payments on this basis. Such an application, written to the head of the regional branch of the Federal Tax Service, is submitted by persons during a personal visit to the inspectorate or sent by registered mail with acknowledgment of receipt.
If the building was erected and put into operation less than 3 years before the sale, and the land plot has been owned for more than 3 years, then a similar application should be submitted only in relation to the allotment, and the tax for the house should be paid according to the existing regulations.
Calculate the amount
Calculations for paying tax on the sale of a house with land are transferred until July 15 of the year, following the tax period, and Personal income tax declaration must be submitted by April 30. That is, the next year after the sale of real estate, you must file a declaration and pay the amount indicated in it.
Calculations are carried out according to the following formula: one million is subtracted from the sum of the cost of the house and land. Of the remaining value, which is defined as the tax base, there is 13%.
For example: the cost of a house is 2 million 500 thousand, and the cost of a mortgage is 1.5 million. The plot and building have been owned for 2 years. Accordingly, the cost of the house and allotment is added up, which in total is equal to 4 million, from which 1 million is subtracted. Their resulting difference of 3 million is the size of the established tax rate. The amount of 390 thousand rubles is subject to payment towards personal income tax.
If the seller is among the beneficiaries based on the provisions of Article 391 of the Tax Code of the Russian Federation, then 10 thousand rubles should be subtracted from the amount received and 380 should be paid.
If the seller is a foreigner, he is required to pay 30% tax. Accordingly, from the sale he is obliged to transfer 900 thousand to the Federal Tax Service. There are no benefits for foreigners.
Provided that the land under the house was registered as a property 3.5 years ago, and the capital building was put into operation and registered in the cadastral register a year before the sale, tax should be deducted only from the cost of a private house. From its value of 2.5 million, one should deduct a million of funds not subject to personal income tax, and from one and a half million, a tax should be deducted, which will amount to 205 thousand rubles.
Each taxpayer proceeds from the nuances determined by his situation. Having calculated the amount due for payment, he must go to the local branch of the Federal Tax Service and fill out a tax return. The declaration indicates both the amount transferred from the sale of real estate to the state budget and the calculations used by the taxpayer.
Benefits or tax exemption For the sale of a house with a plot of land for one reason or another, it is required to fill out an application with supporting documents attached. These include title or title documents for the house and land. For example:
- A property transaction agreement, on the basis of which the seller, at one time, assumed ownership.
- Certificate of ownership in case of privatization of the land plot or when putting the house into operation.
- Certificate of inheritance, if a private house or plot was inherited.
To justify the benefits, you must attach copies of documents that confirm the status of the beneficiary.
Fines for non-payment
When submitting a declaration and transferring money to an account, you should carefully check the correctness of calculations and entering codes when paying through the terminal.
Any mistake will lead to tax violations, for which penalties are imposed.. Conscientious taxpayers who make an error when calculating or entering BCC numbers are punished with a fine of 20% of the amount of arrears.
Unscrupulous violators who specifically failed to pay the required tax or reduced the amount of personal income tax when selling a plot of land with a house are punished with a fine of 40% of the amount of arrears. If citizens continue to evade responsibility, the amount required to be paid will be collected through the court.
Special cases of violations, in case of malicious violation of the tax regime of the Russian Federation, entail criminal liability, providing for the collection of large fines and other types of punishment.
When selling a plot of land with a house and paying tax, you should be guided by various legal aspects that provide for the permissibility of exemption from payment or reduction of the tax amount.
Knowing how much tax is paid when selling a home in 2019, the seller can calculate the amount himself. Of course, some changes in tax laws make this procedure more difficult. But if you understand all the nuances, you can even save money when paying.
Real estate sales since 2016 are carried out according to new rules. The changes primarily affected taxation. It is known that the so-called income tax is taken from the income received by the seller from the transaction. Its size is fixed and amounts to 13% for citizens of the Russian Federation. But foreigners must pay 30% of the transaction.
Previously, profits could be subject to personal income tax only when the property being sold was owned by the seller for less than 3 years. This rule still applies to property received by inheritance, gift or annuity agreement. For all other owners, the property tenure period has been extended to 5 years.
Important! If the house was purchased by the owner before January 1, 2016, then you can sell it without paying personal income tax in 2019. Owners who bought the property later will have to wait 5 years.
Payment is made after registering the transaction and receiving money. To do this, the payer must fill out the appropriate declaration and transfer funds to the bank account of the tax service. You can also pay online by registering on the official website.
The declaration must be submitted no later than April 30, and payment must be made before July 15. If the payer ignores this rule, then for each late month of filing a document, the tax office will charge at least 5% of the amount. But for late payments they will charge 20% of the amount. Since the amounts involved in real estate transactions are quite large, the fines will be appropriate.
Taxation of individuals provides for the possibility of obtaining certain benefits. The home seller can take advantage of the relief, which will allow him to save on taxes. Two options are offered:
- tax deduction;
- cost accounting.
A deduction is a reduction in the tax base by a certain fixed amount. At the moment it is 1 million rubles. This is a response to a survey asking what amount is tax-free on a sale. The payer can take advantage of the deduction regardless of how much the property is worth
Let's say a home is sold for 1 million 300 rubles. Without using the benefit, the seller must pay 169 thousand rubles. But if he contacts the tax service and takes advantage of the deduction, then 1 million rubles will not be subject to personal income tax. This means that he will have to pay only 39 thousand rubles (300,000 * 13%).
The deduction will also apply if the tax base is smaller. This allows you to receive an exemption from remitting income tax. For example, the cost of a house is 980 thousand rubles. The owner who used the established deduction for payment may not pay personal income tax (980,000 – 1,000,000 = -20,000).
It is important to know that the payer can receive the benefit only once per tax period, that is, per year. If he sells several types of real estate, he should choose when it is best to use the deduction. If a couple sells several houses during this time, then each of them can take advantage of the deduction. But only for different real estate.
Another way to reduce the amount of the fee is the absence of profit when concluding a transaction. Such income is not subject to personal income tax. The grounds for exemption from payment are:
- Selling a house for less.
- Expenses for restoration and repair.
- Mortgage costs.
Let’s say the cost of previously purchased real estate was 800 thousand rubles. But the owner, who bought the house for this price, sells it for 720 thousand rubles. Naturally, she does not receive any profit, so there is no tax base for calculation. Tax authorities will require documents confirming the absence of income from the transaction.
Expenses to restore the property before sale may also qualify for an exemption. Naturally, we are talking about big expenses. Receipts and receipts must be provided for confirmation. If the property was purchased with a mortgage, this may also become a basis for tax exemption.
A home for sale may have multiple owners. Most often these are close or distant relatives. Therefore, the way the tax is calculated depends on whether shares have been allocated. If the house is simply the common property of several persons, then personal income tax is paid on a general basis. It's a different matter when the property was legally divided. Then both owners pay tax.
For example, you can take a private house worth 2 million 250 thousand rubles. Both owners, if the shares are not allocated, pay 162 thousand 500 rubles in tax (including deductions). But if the house is officially divided equally, then the calculation is carried out as follows: (2,250,000: 2 – 1,000,000) * 13% = 16 thousand 250 rubles.
This is the amount of tax that each co-owner must remit. Many sellers take advantage of this by dividing the property into shares before selling. This, indeed, allows you to save money, and, moreover, does not in any way affect the procedure for completing a purchase and sale transaction.
The new home owner can also count on receiving benefits. Tax legislation allows some citizens to return 13% of the funds spent. To do this, the buyer must have an official income, which he can confirm with the help of an appropriate certificate.
In addition, the state returns 13% only if the value of the property does not exceed 2 million rubles. Therefore, you can return no more than 260 thousand rubles. To receive funds, the buyer must contact the tax office and submit all the necessary documents.
Once you find out how much income tax you pay when selling a private home in 2019 and when you need to file a return, you should follow these rules. The law allows citizens to enjoy all kinds of benefits and thereby reduce the amount of tax. Even buyers benefit, as they can return part of the money spent
Personal income tax is a tax that is paid on the income received by an individual. Chapter 23 of the Tax Code of the Russian Federation states that owners who have owned property for more than three years are exempt from paying tax; accordingly, they do not draw up a declaration and do not submit documents to the tax authority. Starting from 2016, certain changes will be made to the legislation (entering into legal force), which determine that only those citizens who have owned property for more than five years will be exempt from taxation. In any other case, you need to file a declaration and also pay a tax of 13% for residents of the country, and 30% for non-residents of the country.
Do you need to pay personal income tax if you have owned a house for more than three years?
The legislator clearly defines that tax is paid on income received. In fact, the very essence of personal income tax is to reduce the level of commerce in real estate. The cost of real estate is growing all the time, and there are many citizens who buy low, sell high, and thus create fortunes for themselves. In this case, the state indicates the need to pay tax. After all, in fact, a person receives a very significant income. Many believe that this state of affairs is extremely unfair for those who simply want to improve their living conditions. But, in fact, the state assumes the existence of a property deduction, a reduction in the amount of income due to the amount of expenses (Article 220 of the Tax Code of the Russian Federation), which in fact makes it possible to exclude the payment of serious taxes. Among other things, the legislator draws your attention to the fact that if you have owned the property for more than three years, then you are actually exempt from paying tax. And this allows us to determine the rationality features of the entire structure, this method of taxation.Drawing up a declaration: when and why?
In order for the tax authority to actually calculate the profit received from your sale, you must file a declaration. At the same time, we will immediately say that the declaration is not submitted if you have owned the property for more than three years. That is, here you can enjoy all the benefits. They sold an apartment or a house, and that’s it. At the same time, the tax office has received notification of the completed transaction and may send you a letter asking you to fulfill your obligations. In this case, you draw up a letter indicating that you have owned the property for more than three years, and attach to the letter all the documents determining the validity of your application.As for those owners who sold property that was owned for less than three years, they must draw up a declaration. For what? So that the tax authority has the opportunity to carry out a deeper check on the issue of profit generation and the correctness of tax calculation.
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Selling or purchasing property is a very popular business. Since the state obliged us to pay taxes for any income we received, the sale of a house or land is no exception. Due to the fact that every year the legislature makes a number of changes to the law, it is necessary to prepare and study everything in detail.
Who should I contact to buy or sell property?
To buy or sell property, particularly a house and land, you can seek help from several qualified professionals.
- You can buy through real estate agency– they will provide you with a personal realtor.
- Today formed realtors PE. They don't charge as much for the service provided compared to agencies.
- Buying or selling can be done through notary or lawyer.
Make sure that the person we are helping you is a really good specialist.
You can contact an appraiser for further assistance. He will be able to advise you on what sales procedure awaits you, what documents will be needed and how long it will take. This service approximately costs about 5,000 rubles. You will still have to evaluate the property, so to save time, contact an expert in advance.
Paying taxes
Before you make a deal with the buyer Be sure to discuss which of you is required to pay taxes and in what amount.
Keeping the RS Code in mind, remember that not all income associated with the sale is taxable. If the owner of a house that is for sale has owned it for five years or more, then personal income tax is not charged. In this case, when no tax is withheld, there is no need to declare your income and report it to the tax office.
In 2015, owners who had legal rights to real estate for more than 3 years were exempt from paying tax. From January 1, 2016, this period increased by 2 years.
Important! If the owner of a house or land took ownership before the first day of 2016, then taxation occurs according to the old law indicated below.
According to paragraph 17.1 of Article 217 of the Tax Code of the Russian Federation
Despite the fact that the new law has come into force, this article is still in force for some citizens.
Who is covered by the three-year ownership period?
- The one who received the house and land as an inheritance.
Not everyone falls into this category. And only those who received an inheritance from a relative. According to the Family Code of the Russian Federation, the relationship must be of the first degree, these are parents, children, spouses, grandparents, brothers and sisters.
- Who received the property as a gift?
- The one who privatized the object.
If you belong to one of the listed groups, then your tax base may decrease by 1 million rubles.
From what date should the term be calculated?
Five years must begin to count from the moment when you have the right to property in your hands. This date is stated in the Certificate of Ownership of the property (house and land). Coming from this, we conclude that the five-year period cannot necessarily begin from the beginning of the year.
But what if you have to sell the property earlier? In such cases, two factors can reduce the tax percentage.
Can the tenure of land affect the amount of tax when purchasing real estate?
When you have received income from a land plot in accordance with Article 220 of the Tax Code of the Russian Federation, then a certain calculation will be applied. This calculation will directly depend on the period of ownership of the property.
If the owner, when selling land in whose ownership it was less than 3 years, and from 01/01/2016 to 5 years, will pay personal income tax (13%), then he has the right to the benefit specified in this article and, when calculating the tax, reduce the profit received by 1000000 rubles.
Let's look at two examples:
Example 1.
If the land plot was sold for 5,000,000 rubles, the tax calculation will be as follows
(5000000-1000000 (benefits))*13%=520000 rubles.
Example 2.
Income from the sale of property is 5,000,000 rubles. To reduce the tax, you can deduct not 1,000,000 rubles, but the amount you spent to purchase this plot. This method can only be used when you can document everything.
Let’s say you purchased a plot of land for 3,500,000 rubles, then the calculation will be as follows.
(5000000-3500000)*13%=195000 rubles.
As you can see, this calculation option is more profitable.
IMPORTANT! If the plot is owned by not one, but for example four people and their shares are equal, then if during the sale one contract was concluded for all four parts, then each owner can take advantage of ¼ of the tax deduction (1,000,000/4). But if each heir enters into a personal purchase and sale agreement related to his share, then he has the right to reduce income by 1,000,000 rubles.
Tax amount and payment deadlines
In connection with the Tax Code of the Russian Federation, Article 224 clause 1, income received from the sale of property is taxed at 13%.
If the property was acquired before 2016 and is owned for up to 3 years, then income tax can be calculated according to the following scheme:
- The cost of the object, in accordance with the drawn up contract, minus the property tax deduction (1,000,000 rubles), multiply the resulting amount by 13%.
- The cost of the property, in accordance with the drawn up contract, minus the costs associated with the sale of the property and multiply the difference by 13%.
Important! If you have documented all the costs associated with the purchase of real estate, then when calculating the tax, you can subtract your costs from the total amount of income, as a result your tax will be significantly reduced.
Reporting
When you have calculated the tax amount, you must submit a declaration in form 3-NDFL on income to the tax service.
In this return, you indicate the income received and the tax that is due. You calculate the tax amount yourself. This report is very easy to fill out, so don’t rush to pay money to accountants, try filling it out yourself. To fill it out, you will need an identification code and the amount of income specified in the contract.
Do not forget! Fill out two copies of the declaration; on the second copy, ask the inspector who accepted the declaration to put a stamp stating that you submitted the report on time. Save this form, as there have been cases when citizens' declarations were lost. Having a second copy marked as turned in will protect you.
According to the Tax Code of the Russian Federation, clause 1. Article 229, the report must be submitted no later than April 30 of the year following the reporting year.
For example, if you sold property in 2016, then you will file a 2016 return in 2017. If the last day falls on a weekend or non-working day, then the last day is transferred to the first working day after the weekend or non-working day (Clause 7, Article 6.1 of the Tax Code of the Russian Federation).
If you are not required to pay tax and file a declaration when selling property, be sure to provide supporting documents to the tax service, namely:
- Purchase and sale agreement (the agreement is needed to verify income).
- Documents confirming all your expenses for purchasing real estate (these papers will show on what basis you applied this or that deduction).
Penalty for missing the deadline
If a citizen files a declaration at least one day later than the deadline established by law, he is subject to a fine of 5% of the tax amount indicated in the declaration.
Do not try to hide the income you received, because the notary submits a quarterly report to the tax office about his clients. Indicating their identification code. In this report, it indicates the income you received. By picking up this reporting form, the inspector will quickly be able to check whether your declaration is true.
Required documents
- Identification documents: passport and identification code. Some people, due to religious views, have abandoned the IC, in which case they need to provide a certificate confirming the absence of a code.
- Securities confirming the ownership of real estate. These include:
- Certificate of right to inheritance.
- Agreement of gift or sale. It must be certified by a notary.
- Certificate of ownership of the house and land.
- Act on the right of ownership of a land plot.
- Certificate of registered persons in the house.
It may be that minor children or people with disabilities have the right to the house. In this case, in order to sell the house, the notary must obtain permission from the guardianship authority.
- Expert assessment of land and house.
- A certificate stating that there are no buildings on the land plot being sold.
- Consent on the part of the seller's husband or wife to sell real estate, only if the marriage was registered before the acquisition of the property. Consent in the form of a statement must be certified by a notary.
- Statement of consent to purchase the property of the buyer's husband or wife, drawn up by a notary.
- Marriage registration certificate.
- If you are selling any part of the house, you must obtain a waiver from the other owner of the house to sell half of it. This document is also certified by a notary.
Dmitry Balandin
