What are the costs of selling real estate purchased with maternity capital

Housing that was purchased with the funds of the mother's capital, in accordance with the law, becomes the common property of children and their parents. Shares in such housing and their size are determined by the agreement of the parties to the transaction.

It is not uncommon for parents to sell real estate purchased with maternity capital in order to improve housing conditions. At the same time, they receive income from which they need to pay personal income tax (if the property was owned for less than three years at the time of sale). The General rule applies: the income that forms the tax base can be reduced by the amount of expenses that were incurred when buying real estate (of course, if these expenses are documented).

How does this rule work if the property sold was purchased with maternity capital? The Federal tax service of Russia gave an answer to this question.

The starting point is the distribution between parents and children of shares in real estate purchased with matkapital funds. This is how the expenses incurred by the owners when purchasing housing should be taken into account in proportion to the allocated shares. Also, the amount of personal income tax that owners must pay when selling an apartment or house is reduced proportionally. Important rule:

the costs of the sale must be borne by the parent who holds the certificate of maternity capital, or his spouse.

If, after paying the tax, the payer finds errors in the form of 3-personal income tax (in particular, related to a reduction in the amount of tax), he has the right to submit an updated Declaration to the tax Inspectorate. Specialists will make the necessary adjustments.

Should children pay personal income tax?

The current tax legislation does not distinguish between taxpayers by such criteria as age — it only divides them into residents and non-residents. For minors who receive income, the law does not make an exception — which means that they, like their parents, are required to pay personal income tax when receiving funds from the sale of an apartment.

The legislation contains rules on which taxes are collected from minors. The child himself can calculate and pay the amounts due to the budget, and if he is unable to do so, the tax agent or legal representative can do it. The latter can be a parent, as well as a guardian, adoptive parent or guardian of the child.