QUESTION: Taxes and real estate: when to pay tax when selling real estate?

The question of when exactly to pay tax when selling real estate depends on the period of property ownership and compliance with the minimum holding period. If the property was owned for less than the period established by law, which is three years for preferential categories and five years for other cases, the seller incurs the obligation to pay personal income tax. Understanding these terms and correctly calculating the tax base allows legally minimizing payments or becoming completely exempt from them.

To effectively manage tax risks when selling real estate, it is useful to pre-calculate a baseline scenario and a stress scenario. In the baseline scenario, you determine the exact ownership period and potential tax, while in the stress scenario, you build in a 10–20 percent margin in case of changes in cadastral value or additional expenses. Decide in advance which particular expenses or investment contributions you will cut first in case of a shortage of funds to pay the tax.

In addition, when calculating the tax, the income received from the sale can be reduced by the amount of the property tax deduction in the amount of up to one million rubles per year or by the amount of documented expenses associated with the acquisition of the same property. The 3-NDFL declaration must be submitted no later than April 30 of the year following the year of sale, and the calculated tax must be paid by July 15 of the same year. This approach guarantees compliance with tax legislation and protection against penalties.