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When you do not need to pay personal income tax when selling a property

Question - answer - Legal advice 21.08.2019 at 09:53

Question - answer - Legal advice

FNS of Russia placed on its official website information about in what case will not need to pay personal income tax on the sale of apartments. Tax law stipulates that the owner is exempt from paying personal income tax when selling property, including apartments, if he owned them for a minimum limit or more (paragraph 2 of article 217.1 of the Tax code). According to the General rules, such period shall be three years in case of privatization; the transfer of property by the contract of the lifelong contents with dependence; inheritance or by deed of gift from individuals, recognized a family member or a close relative of the taxpayer. In accordance with the norms of the Family code in this circle of persons includes spouses, parents, children, adoptive parents, adopted children, grandparents, grandchildren, full and half brothers and sisters (article 2, article 14 of the Family code). Please note that this list does not include aunts, uncles, sons-in-law, daughter-in-law and other relatives. The Finance Ministry believes that the donation between them will be taxed (letter of Ministry of Finance of Russia from June 1, 2018 No. 03-04-05/37543, from January 29, 2018 No. 03-04-05/4896), if these citizens will not be recognized by members of the donor's family court in a special procedure (letter of the Ministry of Finance of Russia from may 30, 2016 No. 03-04-05/30929, dated may 29, 2013 № 03-04-05/19591). But in 2020 this list will be expanded (clause 3 of article 217.1 of the tax code). The tax will not be levied on the sale of a single housing of the taxpayer if they owned them for at least three years. As explained by the IRS, for example, if a citizen owns two apartments bought at the same time (in 2016), then when you sell one of them in 2020, the taxpayer still must file a return and pay personal income tax.