Property tax refund: an accountant's guide

Every Russian who is officially employed has the right to get back part of the paid personal income tax (PIT) on large purchases. For example, if an apartment was purchased during the year. The state returns part of the expenses incurred, but only under certain conditions. Accountant Ekaterina Drozdova explained all the nuances of this process.

What is a tax deduction and who can get it

A tax deduction is a refund of part of the tax that your employer withheld from your salary and paid to the budget during the year.

«Personal income tax deductions are a real opportunity to get money back from the state. The main condition is to have an official job and be a resident of Russia. If you don«t have an official job, there is no deduction,» explains Ekaterina Drozdova.

There are many deductions, and they are divided into property, social, standard, and investment. The largest and most in-demand is the property deduction, related to the purchase of housing. It allows you to get back large amounts from the purchase and from paid mortgage interest.

«The taxpayer«s income (from an employer, from the sale of other property) can affect the amount of tax returned in the current year. Previously, the formula was extremely simple: multiply the deduction amount by the standard 13% and get 260,000 rubles ($2,600 at current rates) for the purchase and 390,000 rubles ($3,900 at current rates) for interest. But since 2025, a progressive tax scale has been introduced, the amount of the refund now directly depends on the amount of income accumulated during the year. If your salary income exceeds 2.4 million rubles ($24,000), the tax rate will be 13%, and everything above that — 15%. Income over 5 million rubles ($50,000) — at a rate of 18%, and so on up to 22%. Income from the sale of property is taxed at 13% on the first 2.4 million rubles ($24,000), and at 15% on the amount exceeding 2.4 million rubles,» clarifies Ekaterina.

You can file a declaration for the previous three years, i.e., in 2026 — for 2023, 2024 and 2025.

What is needed for a deduction on the purchase of housing

This type of tax deduction applies to the purchase of an apartment, house, land plot, including with a mortgage. It allows you to get back the tax at exactly the rates at which you paid it. Basically, it is 13%. In this case, the deduction amount for the purchase is 2 million rubles ($20,000), so you get back 260,000 rubles ($2,600). Plus, you can separately claim a deduction on mortgage interest — up to 3 million rubles ($30,000) (you will get back up to 390,000 rubles, $3,900). So the maximum refund amount is 650,000 rubles ($6,500). But if your income exceeds 2.4 million rubles ($24,000) per year and falls under the progressive scale, the final tax refund from the state increases.

But there are important nuances. First, the deduction for the purchase is given once in a lifetime, but it can be spread over several properties. And the deduction on interest is only for one property and also once. Therefore, if you are planning an expensive purchase, it is worth calculating in advance what to claim and what to leave for the future.

«If your income for the year was insufficient, the deduction is carried over to following years. You can file declarations and claim the deduction year after year until the entire deduction balance is used up. The deduction for the purchase (2 million rubles) is provided once in a lifetime, but it can be applied to several properties, while the deduction on mortgage interest is provided once in a lifetime for one property,» warns Ekaterina.

For example, a person bought an apartment with a mortgage for 5 million rubles ($50,000) and will pay 1 million rubles ($10,000) in interest. By claiming the property deduction for the purchase and mortgage on such property, they will use up the chance to get the maximum deduction. The expert advises to weigh the pros and cons if a more expensive mortgage purchase is expected. In that case, you can claim the deduction for the purchase of the apartment, and use the interest deduction on another property.

To confirm expenses for the purchase of housing, a package of documents will be required. This includes a purchase and sale agreement for the apartment or a shared equity participation agreement (DDU), an act of acceptance and transfer of the apartment (for new buildings) or an extract from the Unified State Register of Real Estate (USRRE) for secondary housing, a document confirming payment (a payment order from the bank or a note in the contract that the seller received the money in such and such amount, if payment was in cash, an analogue of a receipt).

«To confirm mortgage interest, you need certificates from the bank about the interest paid during the year; we get a certificate every year until the mortgage is closed. If payment documents are lost, there is a chance to restore them. If it was a bank payment order, you need to contact the bank, they remember everything and will issue a duplicate. If you paid in cash and lost the receipt, you can try to contact the seller. But of course, it is better not to lose such documents,» advises the accountant.

If the apartment is registered as shared ownership, the deduction is distributed proportionally to the shares. But if the ownership is joint, the spouses can choose any proportion, up to 100% for one of them.

«It is enough to file an application with the tax authority about the distribution of shares between the spouses, it is written like that: husband — 100%, wife — 0, or as desired. You need to see who benefits more from claiming the deduction,» explains Ekaterina.

If the apartment is registered with allocation of shares for minors, then parents can use them in their deduction, while in the future the children will not lose the right to a refund.

Separately, it is worth mentioning maternity capital (a state subsidy for families with children). Its amount is subtracted from the cost of the apartment when calculating the deduction.

«For example, an apartment costs 4 million rubles ($40,000), bought by two parents in joint ownership, paid in part with maternity capital. Then the deduction available for it is 4 million rubles — 833,000 rubles = 3,167,000 rubles ($40,000 - $8,300 = $31,700 at current rates), and this amount can be divided between the spouses,» gives an example Ekaterina.

However, not all real estate qualifies for a tax deduction. The important thing is not the year, but the type of property and the seller. As the expert explains, a deduction can be obtained for a room, a share in an apartment or room, but not for apartments (apartments are considered commercial housing).

Also, you will not get a refund when buying real estate from close relatives (spouses, parents, children, siblings) due to the risk of a fictitious transaction or inflated price. However, you can buy from an uncle or grandmother and file documents for a tax deduction.

Many mistakenly believe that you can apply for a deduction when buying a newly built apartment immediately after signing the equity participation agreement (DDU). In fact, you need to wait until the act of acceptance and transfer of the apartment is signed.

«The apartment must be completed and handed over to the buyer. One of the supporting documents for a deduction on a new building is the act of acceptance and transfer. Therefore, you need to be careful with the date of the act. If you received the apartment and signed the act in December 2025, then in 2026 you have the right to claim the deduction (file a declaration for 2025). If you hesitated and signed the act in January 2026, then the right to the deduction is postponed until 2027. By the way, the deduction on interest also cannot be refunded until the act of acceptance and transfer is received. We pay the bank, we keep the deduction in mind,» explains Ekaterina.

How to get a refund

There are two options for receiving the payment. The first is a one-time refund to your card. In this case, you file a declaration with the Federal Tax Service (FTS), the tax authority checks it and transfers the money. This is the most common method.

The declaration can be filed in person on paper, by mail with copies of documents, or electronically through the taxpayer«s personal account — the latter option is the fastest and most convenient.

The second method is to receive the deduction monthly through your employer. Then the employer does not withhold personal income tax from your salary until the deduction amount is exhausted. This is beneficial for those who want to see an increase in their salary every month, rather than waiting for a one-time payment.

«First, you submit an application to the tax authority, then you need to wait for the tax authority to check the application and send a special notification directly to the employer, and write an application with the employer. When receiving your salary, the employer will reduce the amount of personal income tax withheld. Until the approved deduction is exhausted, you will receive money without PIT deduction, thus the salary paid in hand will be higher,» describes Ekaterina.

The expert notes that, as a rule, employers usually provide deductions for children or GTO (a fitness program) without problems, but they ask to handle property deductions yourself. But by law, if you bring a notification from the tax authority, they cannot refuse. It«s just that in this case you add work to the accountant.