Tax rules when selling real estate in Russia
When buying real estate property in Russia, you must know what rules of taxation will be applicable if you decide to sell it.
When selling your property, the tax rules are different for tax residents and tax non-residents.
Who are tax residents and tax non-residents?
A citizen is considered a tax resident of the Russian Federation if he stays on the territory of the Russian Federation at least 183 days during the calendar year, in which he receives profit from selling his property.
- The citizenship of a person does not matter. A Russian citizen can also be considered a tax non-resident of the Russian Federation.
- The purpose of stay in the Russian Federation to determine the tax residency status does not matter.
- The number of days spent in Russia is calculated on December 31 of the calendar year, in which the profit from the sale of real estate is received.
Rules for tax residents and tax non-residents in Russia
When selling a previously purchased property IN 5 YEARS after the date of getting the right of ownership, tax residents and tax non-residents PAY NO personal income tax (effective 01.01.2019).
When selling a previously purchased property EARLIER THAN IN 5 YEARS after the date of getting the right of ownership, the following taxation is applicable:
- A tax non-resident must pay 30% of personal income tax from the total amount received for the sold property.
⇒ Example:
If you sell your property for 11 million rubles, you will pay 30% of 11 million rubles (i.e. 3.3 million rubles).
- A tax resident must pay 13% of personal income tax. In case a tax resident has documentary evidence of costs associated with the acquisition of the sold property, he has a right to declare it, and pay the 13% tax only on the difference between the costs of the purchase and sale of the real estate. .
⇒ Example:
If you bought your property for 10 million rubles and sold it for 11 million rubles and you have documentary evidence of costs associated with the acquisition of the sold property, you will pay 13% tax of 1 million rubles (i.e. 130 thousand rubles).
Additional details on property deductions for real estate sales can be found on the website of the Federal Tax Service HERE.
For more questions/ assistance in property purchase, please contact us at +7 966 380 1075/ moscow-rentals@yandex.ru. Our conditions can be found HERE.
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