the State Duma proposed to raise the tax deduction limit fourfold

Up to 1 million rubles for the purchase of housing: the State Duma proposed to raise the tax deduction limit fourfold

The State Duma Committee on Construction and Housing and Communal Services has taken the initiative to increase the maximum amount of property tax deduction when buying an apartment from the current 2 million to 8 million rubles. The main argument of the parliamentarians is simple: the current limit was set more than ten years ago and has long been divorced from real prices in the real estate market.

Why is there a need for change?

Today, the target of 2 million rubles looks frankly outdated. It is impossible to cover the cost of housing with such an amount not only in megacities, but also in most small regional cities. As a result, the government support measure, conceived as a significant help for home buyers, has turned into a pleasant but modest bonus that hardly covers the cost of basic repairs.

How much can be returned in practice?

The property deduction allows you to return part of the paid personal income tax (personal income tax). The total amount of the refund directly depends on the base limit and the tax rate at which the official income of a citizen is taxed.:

• Now (with a limit of 2 million rubles): with a base personal income tax rate of 13%, the maximum return amount on hand is 260,000 rubles.

• Under the new offer (with a limit of 8 million rubles): at a rate of 13%, the buyer will be able to refund up to 1,040,000 rubles. For citizens with higher incomes who fall under the advanced steps of the progressive personal income tax scale (from 15% and above), the refund amount will be even more significant.

When buying an apartment in marriage, each spouse has the right to deduct, which means that the family will potentially be able to return twice the amount if the value of the property and the official income of both spouses allow it.

Who is eligible for payment?

The rules for obtaining the deduction itself remain the same. Any tax resident of the Russian Federation who receives official income and pays personal income tax from it can apply for it once in a lifetime. The deduction applies to the purchase of an apartment on the primary or secondary market, the purchase of a room, an apartment building or a land plot for individual housing construction. If the tax paid in one calendar year was not enough to select the entire amount, the balance is not burned and is carried over to the following years.

The initiative is still under discussion. In order for it to enter into force, the bill must be approved by the Ministry of Finance and the Government of the Russian Federation, where budget shortfalls are traditionally assessed. However, the very fact of the discussion shows that the need to index tax benefits following rising housing prices is long overdue.