Russia's Finance Ministry Proposes Taxing Apartment Sale Income at Up to 22%

The proposal would end the current practice of taxing property sale proceeds separately. Under existing rules, such income is taxed at 13% on amounts up to 2.4 million rubles and 15% on anything above that.

The proposed scale runs as follows: 13% on income up to 2.4 million rubles, 15% from 2.4 million to 5 million, 18% from 5 million to 20 million, 20% from 20 million to 50 million, and 22% above 50 million. The rate would apply not to the apartment sale proceeds alone but to the total of all annual income, including salary.

Tax consultants calculate that keeping the minimum 13% rate when selling a home would be nearly impossible. Yekaterina Boldinova, a partner at Five Stones Consulting, offered a benchmark: with a salary of 125,000 rubles a month, additional taxable income for the year must not exceed 900,000 rubles. Otherwise the rate rises.

The changes would hit hardest at owners of property that has appreciated significantly. Consul Group cited the example of an apartment bought for 20 million rubles and sold two years later for 50 million: the tax burden would rise by roughly 950,000 rubles. If the seller earns a salary of 6 million rubles a year, the combined tax would increase by 1.27 million rubles.

Exemptions that waive the tax on home sales remain in place. Personal income tax is not paid if the apartment has been owned for more than five years, or more than three years in cases of inheritance or a gift from a close relative.

The Finance Ministry also plans to extend the progressive scale to interest on bank deposits, income from securities sales and dividends. The ministry estimates the changes would affect no more than 6% of taxpayers, about 4 million people. The authorities attribute the revenue push to the need to narrow the budget deficit, with roughly a third of spending going to military needs. Revenue in 2027 is expected to rise to 1.02 trillion rubles.

For properties with a cadastral value above 300 million rubles, the ministry wants to scrap the 10% annual cap on tax growth, and for new properties to remove the 0.6 relief coefficient in the first year.