A stamp on a passport as an investment: how much money is lost without an official marriage?

Imagine: you and your partner decide to buy an apartment. A deal is looming on the horizon, your nerves are on edge, your Pinterest interior ideas folder is swelling with all kinds of ideas… Do you want to receive a bonus in the form of, for example, a new kitchen or payment for part of the renovation? I’m sure there are no objections. And let me remind you that in marriage, each spouse has the right to a tax deduction – up to 260,000 rubles per person (article 220 of the Tax Code of the Russian Federation). At the same time, let us remember that the deduction can be obtained not only when purchasing an apartment (apartments are not included here), but also when purchasing a house, land plot, as well as shares in residential real estate. If these properties are purchased with a mortgage, you may be able to take an additional deduction for the interest paid on the loan. If you multiply the tax deduction amount by two, you get a nice amount.

The maximum amount of expenses for the construction or purchase of housing or land, on which you can receive a tax deduction, is 2,000,000 rubles.

Housing may cost more, but the deduction will only be calculated from this amount! This applies to expenses incurred for the purchase of one or more properties. If you pay income tax at a rate of 13%, the maximum amount of tax “cashback” for purchasing a house will be 260,000 rubles.

When purchasing a house, land or construction with a mortgage, the maximum amount of interest paid on the loan on which the tax deduction will be calculated is 3,000,000 rubles. The limit of 3,000,000 rubles applies to mortgage loans taken after January 1, 2014. Interest amounts paid on mortgage loans taken before 2014 can be fully included in the property deduction without restrictions. If you pay income tax at a rate of 13%, the maximum amount of tax “cashback” for mortgage interest will be 390,000 rubles.

The maximum amounts for calculating tax deductions (2,000,000 rubles for the purchase of real estate and 3,000,000 rubles for interest on a mortgage) are the same for all categories of taxpayers, but those who pay increased personal income tax will be able to return a higher percentage. So, for borrowers whose income is subject to personal income tax at the highest rate of 22%, the maximum amount of property tax deduction will be 1,100,000 rubles (for the purchase of housing and interest on the mortgage).

The maximum home purchase deduction and mortgage interest will not necessarily be paid immediately. However, this deduction has no limitation period. Thus, the “cashback” for the purchase of housing and the interest on the mortgage can be received in pieces for several years.

Keep in mind that you will not be able to benefit from a tax deduction “in advance”. A tax deduction is a refund of part of the personal income tax. And if, at the end of the reporting period (year), the amount of income tax withheld from your income is less than the maximum tax deduction, you will only be able to return the actual amount of tax paid. And a mortgage deduction can only be obtained for the interest actually paid, and not for the future overpayment.

Officially married spouses can benefit from a double deduction for the purchase of joint housing and mortgage interest. Each of you will be able to get cash back, regardless of who owns the property.

Example: how to get 10,000,000 rubles, or return the price of an apartment?

For example, you bought an apartment worth 10,000,000 rubles and took out a mortgage loan for 8,000,000 rubles. For the entire term of the mortgage, the amount of interest paid will be 7,000,000 rubles. Let’s imagine that most of the expenses (around 70%) are borne by the husband.

In this case, the spouses have the right to benefit from a double deduction despite the registration of the husband’s property rights and his main contribution to the purchase of the apartment. What does the total amount consist of:

In total, you can return an amount equivalent to the cost of the apartment.

Regardless of who bears the main financial burden (e.g. the husband, as in our example), the spouses can agree to divide the deduction in any proportion, for example equally. This is advantageous because it allows you to get a double deduction. In our case, the couple decided to entrust each other equally with the costs of purchasing an apartment (each will claim 2,000,000 rubles) and to do the same with mortgage interest (each – 3,000,000 rubles).

If both spouses work and pay taxes at a rate of 13%, then they can claim a deduction for the purchase of an apartment. The total deduction – 4,000,000 rubles, multiplied by the tax rate of 13% – will allow you to return to the family 520,000 rubles from the purchase of housing (partly). The spouses will receive this money in equal shares, 260,000 rubles each.

For interest paid, the amount of deduction will be 6,000,000 rubles. Taking into account the personal income tax rate of 13%, both spouses will be able to return 780,000 rubles to the family (partly as mortgage interest is repaid). This amount will also be distributed equally between the couples – 390,000 rubles each. Thus, the total tax refund to the family will amount to 1,300,000 rubles. 650,000 rubles each, respectively.

So, you’ve done the math. What to do next? Submit the documents to the tax service.

Step 1 – submit your tax return. When planning, keep in mind that the deduction can only be received after the end of the year in which the right to it arose. That is, when you have signed the acceptance certificate (for new buildings) or received an extract from the Unified State Register of Real Estate (for secondary real estate). Next year you will need to complete and submit a declaration 3-NDFL. There you will need to indicate information about income, taxes paid and also declare a tax refund.

Step 2 – collect documents. You will need a real estate purchase contract, payment documents, an extract from the Unified State Register, as well as personal documents – a passport and a marriage certificate.

Step 3 – submit an application for distribution of property deduction. Use ready-made sample or write a statement in free form. In the text, it is important to indicate the full name, tax identification number, passport details of the husband and wife, the decision on proportions in percentage and amount, as well as information about real estate. Everything is ready – now you need to submit the documents to the tax service.

The examples described do not apply to “civil” marriage, as you understand, nor to “free relationships”. This means that any money that might be left in your family will simply disappear into thin air. Just like part of the funds in case of divorce: if the marriage is dissolved before the transaction, a deduction will simply disappear. It sounds cynical, but it’s the reality: sometimes the best scenario is not to make a hasty decision. An extra month of patience can turn into a tangible bonus in your bank account.

This doesn’t just work with real estate. Marriage offers additional opportunities in other areas, from child benefits to tax incentives for treatment and education. The system is designed in such a way that marital status can become not only a motive for the next batch of photos on social networks, but also an element of your financial strategy.

Of course, you shouldn’t stay in a relationship for the sake of filing your taxes. But it’s important to remember: a stamp in a passport is not just about feelings. A stamp is not just a formality that changes nothing. Marriage for mutual love is part of the foundation that can be called your “personal financial capital”. So, if your life plans include not only serious relationships, but also serious transactions or expenses, do not ignore this small, but sometimes important and very important legal fact. Emotions can wait. Money likes to be thought of in advance.

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