Real Estate Tax Refund: Accountant's Guide

Every Russian citizen who works legally has the right to get back part of the personal income tax (NDFL; PIT) they paid on major purchases. For example, if they bought an apartment during the year. The state returns part of the expenses incurred, but only under certain conditions. Accountant Yekaterina 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.

«Tax deductions for NDFL are a real opportunity to get money back from the state. The main condition is to work officially and be a resident of the Russian Federation. If you don«t have an official job, then there is no deduction,» explains Yekaterina Drozdova.

There are many types of deductions, and they are divided into property, social, standard, and investment. The largest and most sought-after is the property deduction related to buying a home. It allows you to get back large sums from the purchase and from mortgage interest paid.

«The taxpayer«s income (from an employer, from the sale of other property) can affect the amount of tax refunded in the current year. Previously, the formula was extremely simple: multiply the deduction amount by the standard 13% and you get 260,000 rubles (approx. $2,900 at current rates) for the purchase and 390,000 rubles (approx. $4,300) for interest. But since a progressive tax scale was introduced in 2025, the refund amount directly depends on how much income has accumulated during the year. If your salary income exceeded 2.4 million rubles (approx. $26,700 at current rates), then the tax will be at a rate of 13%, and everything above that — 15%. Income over 5 million rubles (approx. $55,600) — at a rate of 18% and so on up to 22%. Income from the sale of property is taxed at a rate of 13% on up to 2.4 million rubles, and over 2.4 million — at a rate of 15%,» specifies Yekaterina.

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

What You Need for the Home Purchase Deduction

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 tax exactly at the rates you paid. The base rate is 13%. In this case, the deduction amount for the purchase is 2 million rubles (approx. $22,200 at current rates), so you get back 260,000 rubles ($2,900). Plus, you can separately claim a deduction for mortgage interest — up to 3 million rubles (approx. $33,300) (refund up to 390,000 rubles, $4,300). In total, the maximum refund amount is 650,000 rubles (approx. $7,200 at current rates). But if your income exceeds 2.4 million rubles per year and falls under the progressive scale, the final tax refund from the state increases.

But there are important nuances. First, the purchase deduction is given once in a lifetime, but it can be distributed over several properties. The interest deduction, however, applies to only 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 subsequent years. You can file declarations and claim the deduction year after year until the entire balance of the deduction is used up. The purchase deduction (2 million rubles, approx. $22,200 at current rates) is granted once in a lifetime, but it can be applied to several properties, while the mortgage interest deduction is granted once in a lifetime for one property,» warns Yekaterina.

For example, a person bought an apartment with a mortgage for 5 million rubles (approx. $55,600 at current rates) and will pay 1 million rubles (approx. $11,100) in interest. By claiming the property deduction for the purchase and mortgage on this property, they will use up the chance to get the maximum deduction. The specialist advises weighing the pros and cons if a more expensive mortgage purchase is anticipated. In that case, you can claim the deduction for the apartment purchase and use the interest deduction for another property.

To confirm expenses for buying a home, you will need a package of documents: the contract of sale for the apartment or the equity participation agreement (ДДУ, DDU), the handover acceptance certificate for a new build, or an extract from the Unified State Register of Real Estate (ЕГРН, USRRE) for a secondary market property, and a document confirming payment (a bank payment order or a note in the contract that the seller received the money in a certain amount, if paid in cash — essentially a receipt).

«To confirm mortgage interest, you need certificates from the bank about the interest paid during the year. You get a certificate each year until the mortgage is paid off. If payment documents are lost, there is a chance to recover 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 it is better not to lose such documents of course,» the accountant advises.

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

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

If the apartment is registered with shares allocated to minors, parents can use those shares in their deduction, while the children will not lose their right to a refund in the future.

Separately, it is worth mentioning maternity capital. Its amount is deducted from the cost of the apartment when calculating the deduction.

«For example, an apartment costs 4 million rubles (approx. $44,400 at current rates), bought by two parents in joint ownership, paid in part with maternity capital. Then the deduction available for it is 4 million minus 833 thousand (approx. $35,200) rubles; that is the amount that can be divided between spouses,» Yekaterina gives an example.

However, not all real estate qualifies for a tax deduction. What matters is not the year, but the type of property and the seller. As the expert explains, you can get a deduction for a room, a share in an apartment or room, but not for serviced apartments: they 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 still apply for the tax deduction.

Many mistakenly think they can claim the deduction for a new build immediately after signing the equity participation agreement (ДДУ). In fact, you must wait until the handover acceptance certificate is signed.

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

How to Get the Refund

There are two ways to receive 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.

You can file the declaration in person on paper, by mail with copies of documents, or electronically through your taxpayer«s personal account — the last 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 NDFL (PIT) from your salary until the deduction amount is used up. This is beneficial for those who want to see a monthly increase in their salary 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 notice directly to the employer, and then write an application with the employer. When you receive your salary, the employer will reduce the amount of NDFL withheld. Until the approved deduction is exhausted, you can receive money without NDFL withholding, so the net salary will be higher,» describes Yekaterina.

The expert notes that, as a rule, employers usually provide deductions for children or GTO (Ready for Labor and Defense) without problems, but they ask you to arrange property deductions yourself. But according to the law, if you bring a notice from the tax authority, they cannot refuse. It just means you add work for the accountant.