Working parents are concerned about tax benefits based on the number of children they have. What will the children's housing allowance be in 2017? Who is entitled to a property deduction for children? What is the essence of the government program?
What is this program?
Citizens of the state must pay income tax every month; in the Russian Federation it is 13%. Income is calculated from the salary calculated by the accounting department. The deduction allows you to return part of the tax paid to the government. Parents have a real opportunity, working as before, to earn a little more money than before the birth of the child. Standard children's benefits in 2017 are outlined in the Tax Code. Articles 213, 218 list the categories of persons entitled to such tax discounts.
Who is eligible for benefits?
Having heard about children's, housing or other deductions, many people think that benefits are available only to large families. In reality, the housing deduction is available to all parents - no matter how many children they have. Only the amount depends on the number of children - the larger the family, the higher the tax-free benefits. Benefits are intended for biological mothers/fathers, as well as adoptive parents or official guardians. In some cases, benefits are received by the child’s grandfather/grandmother who has taken guardianship.
Amounts of benefits
The amount of the benefit directly depends on the number of children in the family. One child is enough to receive benefits, but the more children grow in your home, the larger the amount from your salary is not taxed.
The deduction amount is:
- For children 1 and 2 – 1,400 rubles;
- For the third child – 3,000 rubles;
- For IV and all subsequent ones – 3,000 rubles.
!Important: If a child suffers from a serious illness that gives him the status of a disabled person, then the benefits will be 6,000 or 12,000 rubles (depending on the status: parents, adoptive parents, guardians). How a disabled child was born does not affect payments.
Terms of service
What do you need to officially receive a tax deduction?
- Official employment is required; only citizens with a “white” salary are eligible for benefits. The benefit is directly linked to the personal income tax, so the amount of income received by a citizen must appear in the reports submitted to the tax office by the employer.
- An important factor is the presence of minor children. Benefits are available to people whose children have not reached the age of eighteen. This is due to the fact that after graduating from school there is every opportunity to provide for yourself.
- Parents can continue to receive a deduction for an adult child if he is studying on a budget at a university, internship, or graduate school. Benefits continue until the student reaches the full age of 24.
- Deductions are due to those people whose income is less than 350,000 rubles per year. Deductions are paid until a person receives this amount in their salary; as soon as the total income reaches the “ceiling”, payments stop. So far the parent has not earned 350,000 rubles this year. – payments will continue.
!Important: An exception in the law on a deduction for students helps people from large, large families to fully receive higher education.
Double deduction
Receiving tax payments is available to both parents if they have income that is subject to tax. In some cases, double deduction is carried out.
To do this, you need to write an application for refusal of payments where the parent receives the deduction. The second parent receives the right to double benefits regarding tax amounts.
The second way to receive a double deduction is suitable only for single parents. What is meant by this concept in the Tax Inspectorate?
- The only parent is listed on the birth certificate. Usually such a parent is the mother, and instead of the father there is a dash.
- The second parent is in the documents, but he is absent from the child’s life for a long time. This fact has been documented by the relevant authorities.
- One of the parents died, which is confirmed by the relevant document.
!Important: If both parents are alive, but live in an unregistered marriage, then they do not fall under the concept of single parents.
You can receive tax deductions from your employer – where your parents work. The second place of receipt is the tax office at your place of residence. Housing conditions and place of residence do not in themselves affect payments.
Documents for providing a tax deduction
Most often, parents themselves submit data to the tax office in order to issue a deduction for the children of their employee. The employer requests the following documents from employees.
- Certificate f 2-NDFL from the previous place of work for the year.
- Birth certificate for children.
- If children are 18-24 years old - a certificate from their educational institution.
- Application for a tax deduction.
If the employee was not accrued deductions for the child (or not in full), then you can receive the missed amounts for the next year if a declaration and other documents have been submitted to the tax service. In this case, such documents are needed.
- A copy of each child's birth certificate.
- Tax declaration f 3-NDFL.
- A certificate from a university, technical school, college, or other educational institution, if the child has reached the age of 18 but is under 24.
What documents are needed for double deduction?
- Statement of refusal by father or mother. Both parents must have taxable income.
- Certificate of income 2-NDFL (provided to the employer monthly).
- Application for a double deduction.
Registration of a standard deduction
It is convenient for the employer to provide the benefit from the first of January of the year, regardless of the month in which the application was submitted. The amount of payment is calculated based on the number of the employee’s children. It doesn't matter whether the children are natural or adopted. These can also be children under guardianship or adopted children (children of spouses).
If the marriage is not officially registered, then the second parent receives a deduction after providing documents confirming that the child is fully supported by the specific taxpayer who writes the application. Typically, such a document is a certificate of registration of the child at the place of residence of this person, a copy of the court decision explaining with whom the child lives and other similar evidence.
A double deduction, as stated above, is provided in the absence of one of the parents. An unregistered marriage is not a basis for providing benefits. The absence of one of the parents is confirmed by the following documents:
- death certificate of father/mother;
- the child’s certificate, which indicates only one parent;
- a court decision declaring a parent missing;
- a certificate stating that the father is included in the birth certificate according to the words of the child’s mother.
Registration of tax deductions takes place in the accounting department of a working enterprise or at the Tax Inspectorate.
Experts: the children's housing deduction scheme should suit all market participants 3 The State Duma Committee on Social Policy proposed introducing the “Children's Housing Deduction” - a program according to which part of the mortgage loan of young parents in the event of the birth of a child will be paid from budget funds. How such a measure will affect the real estate market and whether, thanks to it, residential projects will become more focused on families with children - experts told the UrbanLook portal about this.
Dmitry Mikhalev, head of the service for working with government agencies at St. Petersburg Renovation:
A child housing allowance would be a useful measure to support young families. Today, many are cautious about long-term loan products, as they are not confident in the stability of income. Writing off part of the debt upon the birth of a child would motivate people to purchase housing without putting an excessive burden on the family budget. In addition, such a deduction could support developers, as it would increase the demand for multi-room housing. This would make it possible to make many residential complexes aimed at mass buyers more balanced in terms of apartment layout by increasing the share of two- and three-room apartments. Only two questions remain. The first is the amount of the children's housing deduction. Most likely, it will vary depending on the number of children in the family: the more there are, the higher the deduction. And the second question is whether its introduction will mean the abolition of maternity capital. Today, matkapital can also be used to service a mortgage loan, and it is unlikely that the government will finance two similar instruments at once.
Evgenia Vladimirova, head of the Rambler.Real Estate project Rambler&Co:
The initiative to forgive part of the mortgage debt to young parents is interesting, but it is important to understand whether this idea is populist. Perhaps it would be wiser to extend and expand the program for providing maternity capital, since up to 90% of this government payment is used by families to improve their living conditions. In addition, a completely logical question arises: why it was decided to support only mortgage holders, and not all young parents. The proposal has been made, but the details of the possible social program and the sources of its financing are still unclear. Of course, supporting families at the birth of children and helping to improve living conditions are important areas in the state’s social policy. Developers also benefit from the launch of such programs; many projects will further develop social infrastructure; this will become an additional competitive advantage for residential complexes. Russians need such programs and the construction industry needs them.
Vasily Sharapov, lawyer at the development company City-XXI Century:
Any reasonably regulated assistance from the state to young families can only be welcomed. But for the stable functioning of the mortgage market, rules are needed that suit all participants in this market. Forgiving part of the debt means a loss for the creditor. If mortgage loans are unprofitable, simply no one will issue them, and therefore no one will receive them. At one time, so-called maternity capital appeared in the legislation, at the expense of which the child’s mother has the right to repay part of the mortgage loan. Any new duplicating mechanisms like the “children’s housing deduction” are hardly needed. The state can also use a mechanism to subsidize mortgage loans, which is already being used in some banks during the crisis.
You can simply increase the amount of maternity capital, which the mother has the right to use for mortgage payments. However, such a measure, as we understand, could significantly increase federal budget expenditures. I would also emphasize that families with children pay taxes almost the same as those people who do not have children. Maybe think in this direction and reduce taxes for families with two or more children. This would be useful and, in my opinion, fair. Taking care of a child is a kind of our social tax, our duty to future generations. The money that parents save on taxes, they can invest in their children, for example, in their education and development.
Kristina Shulgina, head of the mortgage department at NDV-Real Estate:
The introduction of such a mechanism seems realistic, especially since the state provides social support: there is a program of maternity capital and military mortgages. However, not everything is simple: you need to develop a mechanism “from scratch”, think through the algorithm and interaction processes, as was the case, for example, with maternity capital. Banks are not commercially interested in forgiving mortgage debts, so the implementation of such a measure seems possible with the direct participation of the state. If a mechanism for debt compensation is determined, then the program for this deduction may well work successfully. The measure itself, if implemented, could have a positive impact on the real estate market, especially since family people often become apartment buyers. However, the strength of this effect will depend on the terms of the program and the audience of borrowers it covers. Given the fairly stringent restrictions and requirements that program participants will have to meet, the impact on the market will be very narrow. For now, these issues are most likely at the initial stage of discussion. Changes in real estate formats are unlikely to be expected. New buildings offer the desired level of comfort for both families with and without children. In addition, there are already projects on the market that are conceptually oriented specifically towards family buyers.
Vadim Lamin, managing partner of the SPENCER ESTATE real estate agency:
The initiative is undoubtedly interesting. In my opinion, to spur the birth rate of Russians, all means are good, because it is no secret how the population growth in Russia is formed. There is also no doubt that developers are now en masse adding to the format of small apartments and studios designed for 1-2 residents. The reason is simple - it is in demand mainly because it is cheap. It is these factors that lead to the fact that this format is fashionable and modern. Although, living in a spacious apartment, within reasonable limits, of course, is much more comfortable. And it is more profitable for the developer to build large apartments. However, demand determines supply. Everything stems from the financial capabilities of the population, which are undoubtedly now decreasing. In these conditions, even small changes, which include the one under consideration, will have a positive impact, although, in my opinion, they will not bring fundamental solutions for the real estate market.
Raisa Manashirova, commercial director of SDI Group, developer of the Accord residential complex project. Smart-quarter":
Such a measure, if adopted at the legal level, could have a very positive impact not only on the real estate market, but also on improving the demographic situation. Firstly, this will affect the quality of life of young families who will have a real chance to acquire their own housing, and as a result, the entire construction industry, which has been supported over the past year through government subsidies of mortgage rates, will benefit.
Maria Litinetskaya, managing partner of Metrium Group:
Any stimulation of effective demand has a positive effect on the market. This is not an unfounded statement, since government subsidies for mortgages are clear evidence of this. Without this tool, the market would have frozen a few years ago. When a child appears in a young family, it becomes extremely difficult for one able-bodied person to independently make loan payments. And such government support will be very timely in the current economic conditions. Therefore, additional subsidies for mortgages for young families will definitely support demand and, accordingly, the market. If developers decide to change existing housing formats, this will not happen in the next 2-3 years, since the real estate market is developing gradually. In my opinion, the share of two-room apartments or similar “Euro-format” proposals may increase, since young families with at least one child will find it uncomfortable to live in small studios or one-room apartments.
Olga Shikhova, head of the Mortgage and Loans Department at the Bon Ton real estate agency:
The idea of introducing a mechanism for reducing mortgage debt when children are born is, in fact, another mechanism to stimulate an increase in the birth rate in the country and the availability of mortgages. Maternity capital, which is indexed every year (except for 2016), has partially taken on this role. It can also be used to pay off a debt to the bank, but it is given only once at the birth of a second or subsequent child in the period from 01/01/2007 to 12/31/2018. If a scheme is developed under which repayment will occur at the birth of each child in the family during the mortgage repayment period, then this will undoubtedly be a good help for young parents.
The main thing is that this program can work together with the others (maternity capital, tax deduction), and not replace them. As for developers, this measure will not force them to reconsider existing formats. After all, both the cost of construction and the rate of payback of the project are taken into account. Apartments of small areas are sold faster today, since they cost the buyer less, but at the same time have a higher cost per square meter, compared to 3-4-room apartments. At the moment, in all projects the range of apartments is varied and any family will be able to choose a suitable property for themselves.
Tatyana Guseva, director of the MIEL-Novostroiki mortgage center:
At the moment, these proposals are in the discussion phase, while there are no concrete decisions. However, the idea is good and interesting, since any measures to support citizens, and especially families with children, have a positive effect on both sales volumes and construction volumes, respectively, and even more so such a measure as subsidizing part of the debt. At the same time, there is one tangible “but” - in order to receive a “children’s housing deduction” you must first take out a loan, and this is directly related to the solvency of the population. But the real incomes of citizens are still declining.
Dmitry Panteleimonov, Director of the Marketing and Sales Department of Leader Group, Moscow Region:
Today, most large-scale residential complexes in the Moscow region are already aimed at family buyers with children. On the territory of large microdistricts, developers are building kindergartens and schools, placing playgrounds and sports grounds in the courtyards of houses, improving walking areas, etc. So, additional infrastructure facilities are unlikely to be needed. In addition, the expansion of infrastructure will increase the cost of construction and, as a consequence, prices for apartments. Another thing is that “child-centricity” will certainly be used in one form or another in advertising and promotion of objects.
Konstantin Shibetsky, director of the mortgage department of the MIC Group of Companies:
If the State Duma passes the bill on a children's housing deduction, this will give some increase in the volume of mortgage loans to families with children, since such a measure will increase the purchasing power of this category of citizens. However, we cannot yet predict exactly to what extent. As for the reaction of developers to this measure, its format will directly depend on the mechanism for implementing the legislative initiative, as was the case with state subsidies for mortgages. The only difference is that the process may take longer. With the state subsidy, the mechanism became clear quite quickly, since it did not depend on the factor of childbirth. On average, the process may take 2-3 years - during this period developers will be able to evaluate sales statistics for this category of clients, and if their volume increases significantly after the adoption of the bill, then there will definitely be a reaction. Developers will be able to plan the following projects with a qualitatively different layout ratio, designed for families with children. In any case, this initiative implies significant support for both family citizens and the construction industry as a whole, especially since there are similar bills in the West, and they are successfully functioning in the real estate market.
Lyudmila Tsvetkova, financial director of MIEL-Country Real Estate:
It is too early to talk about the impact of such an initiative on the market, since the exact scheme and volume of the deduction are not yet known. According to the government representative, it is clear that it is not one-time (like maternity capital), but it is not clear how many times the deduction can be used and whether it will be linked to the number of children. In my personal opinion, it is difficult for young families to save up for a down payment on a mortgage, without which they cannot use a loan. Therefore, I think it is important to think through mechanisms that will help either save up for a down payment on a mortgage, or use public funds for this (similar to maternity capital, which can now be used as a down payment). But the very idea of helping young parents pay off their mortgage is certainly correct. Perhaps, in the future, this could become the engine with which consumers themselves will be able to influence commercial structures (developers) in order to increase their “child-centricity.”
Vartan Poghosyan, Marketing Director of TEKTA GROUP:
It is not yet possible to draw a conclusion about the degree of influence of this measure on the real estate market, since specific proposals and mechanisms have not yet been presented. In principle, similar functions are already performed by maternity capital. Of course, an additional mechanism would not hurt, but a lot of questions immediately arise here - from the fairness of such a measure to the size of the amounts written off. It is worth noting that buyers with families and children are by far the most active. This is largely because the birth of a child becomes a powerful incentive to buy your own home.
And accordingly, the larger the family becomes, the more space it needs to live. In principle, in most projects the issue of creating this kind of infrastructure is paramount and mandatory. Therefore, we can say that almost any object on the market is “child-centric.” Another question is that a reasonable approach involves creating not only children's infrastructure, but also other facilities necessary for life. Firstly, in addition to children, there are other categories of citizens who need special treatment. And secondly and most importantly, a good project should be oriented towards a long cycle. That is, take into account that today children need a kindergarten, tomorrow they will grow up and need a school, and the day after tomorrow they will need a workplace, a hospital, a cinema, shops, etc. In any case, this measure will be very useful as it stimulates an increase in the birth rate.
Nikita Zhuravlev, Chairman of the Board of the Association of Real Estate Market Professionals REPA:
The proposal of deputies to introduce a “children’s housing deduction” gives us hope for a promising future for our children. However, this is not enough to stimulate the primary real estate market. Interest rates on a mortgage loan for a person’s first and only home should not exceed 5-7% in order to eliminate possible speculation in the market, and the down payment should be from 10%. And all these preferences should not depend on age and apply only to young families. In addition, at the state level, it is important to work out the issues of constructing rental housing and offer it to citizens as an alternative to the complex, lengthy and expensive process of purchasing a home. A statement of intent is, of course, good, but concrete actions are important.
Irina Ignatieva, Marketing Director of ComStrin:
We live in difficult times. Yes, effective demand for real estate is falling. Yes, it needs to be supported. But, probably, in other ways - by reducing mortgage rates for all categories of citizens, reducing administrative barriers for small and medium-sized businesses, creating new jobs, and so on. Writing off part of the mortgage debt for young parents will, of course, help, and primarily the regions. Now people there take out a mortgage reluctantly and with difficulty. More affordable mortgages will certainly stimulate demand for real estate. But this support measure will have a quick short-term effect, like a headache pill. Whether the “children’s housing deduction” will cure our economy and increase the well-being of our citizens in the long term are probably rhetorical questions. In order for residential projects to become more child-centric, support is needed for the construction of social facilities - kindergartens, schools and clinics. Today, these objects account for 10 to 20% of the cost per square meter.
Alexey Perlin, General Director of SMU-6 Invest:
In modern conditions and economic realities, developers are focused more on families with children. Thus, in the business-class housing segment, the share of family buyers is about 50%. The number of mortgage buyers who want to improve their living conditions and are planning to increase their family is today about 60%. The initiative that came from AHML to pay compensation (or provide benefits) to those families in which a child was born already in the process of paying off the mortgage loan is good, but it still leaves more questions than it answers. In particular, it is not clear how the amount of compensation will be calculated: the term will decrease, the absolute amount or % of the total debt will decrease. How will the 2-3 and subsequent children who appear during the mortgage process be counted? That is, there are no obvious answers yet.
Anna Borisova, head of the mortgage lending department of the KASKAD Family of companies:
Indeed, this State Duma committee proposes to introduce a measure called “Children’s housing deduction.” This is due to the fact that there is a big national problem in which there is no more than seven square meters per family member, which leads to an urgent need to improve housing conditions. If this measure comes into effect, first of all, it will improve the situation in those families who are expecting the birth of a child, since in the case of an existing mortgage, the loan burden will decrease, which will allow the family to reduce the amount of expenses as a whole. This measure will also affect the volume of mortgage transactions not only in the primary but also in the secondary housing market, increasing the total share of such transactions by at least 30% approximately a year after entry into force, due to the fact that pent-up demand will be stimulated.
Natalya Smirnova, Deputy Director of the Sales Department of the Granel Group of Companies for mortgage lending:
At the moment, not all developers can boast of a well-thought-out infrastructure within their projects. However, in general, in the primary housing market there is a tendency to improve the quality of construction; many developers are trying to adapt to the new requirements of the time and build infrastructure facilities that are necessary primarily for family clients with children. The “Children's Housing Deduction” program, along with the maternity capital program, will partly contribute to the continuation of this trend and the emergence of new high-quality properties aimed primarily at families with children.
Ekaterina Artemova, director of the consulting and analytics department at Azbuka Zhilya:
First of all, it is worth noting that today there is no information about the specific mechanisms of this deduction or its size. Only general assumptions can be made about the effectiveness of these measures. However, even at a first approximation, additional subsidization of mortgages through an instrument that is interesting to a fairly large category of potential real estate buyers can have a very beneficial effect on the entire industry as a whole. The measure we are discussing will undoubtedly improve the conditions for the purchase of real estate by young families, encourage some of them to purchase their own homes with a mortgage, and perhaps lead to a slight reduction in the number of problem loans, provided that the current requirements for borrowers are maintained.
But, despite the possible positive effect of this bill, one should not rush into statements that, against its backdrop, developers will begin to radically reconsider the formats of their projects. With almost 100% probability, the bill will not lead to either a sharp surge in the birth rate or a significant redistribution of the potential audience of home buyers towards young families. Existing real estate formats in general, provided the developer complies with the requirements for social construction, meet the basic needs of the category of buyers we are considering. For developers to revise the principles of planning new projects in the direction of being more child-centric, a significant period of time must pass, and this is subject to unconditional recognition of the success of this initiative.
On March 25, 2016, the United Russia party at the forum "Effective social policy: new solutions" in St. Petersburg put forward a proposal to introduce a new form of state support for families with children - children's housing deduction.
The essence of the new program program is to provide benefits to young families using federal budget funds to pay a mortgage loan in connection with the birth of their children - up to complete write-off principal or interest thereon.
Currently being discussed two main options providing a child housing deduction, which should lead to a reduction in mortgage payments:
- decline interest rate on a loan already taken or provided;
- repayment of a significant part principal at the expense of public funds.
At the same time, it is planned that with the birth of each subsequent child in the family, the costs associated with repaying the loan will be reduced even more.
In particular, the Commissioner for Children's Rights Pavel Astakhov proposed in this regard to take into account the positive experience of the regions on the step-by-step system of writing off mortgage debt, which consists of the following:
- at birth second child write off the total interest rate on the loan in the amount of 50%;
- at the birth of the third- 100% (the loan becomes interest-free, no additional funds are charged for its servicing).
When will the children's housing allowance begin in Russia: latest news
In June 2016, at the United Russia party congress, the chairman of the State Duma Committee on Labor, Social Policy and Veterans Affairs Olga Batalina reported that the child housing deduction program for mortgages is planned to be launched in the coming years as an experiment- i.e. Initially, it will not be presented as a single scheme operating in all credit institutions and for all mortgage products.
Olga Batalina also noted that benefits can only be obtained by mortgage with state support: “We are talking about lending, which is carried out by AHML as part of state housing programs”. In this regard, the program is being developed jointly with the specified government agency.
At the moment, it is unclear how the mechanism for writing off interest and principal on the loan will be structured and what the amount of benefits will be.
Experts also highlight one of the significant shortcomings of the new program, which gives rise to social inequality:
- the draft states that benefits are provided for families whose children were born after the law was passed;
- at the same time, about families whose housing was purchased with a mortgage and already have children, nothing is said at all.
It is noted that state support in the form of a children's housing deduction for a mortgage could replace it, the participants of which are often unable to improve their living conditions due to dropping out of the queue to receive a subsidy when one of the spouses reaches the age of 35.
What is the child mortgage deduction and what benefits does it provide? Will tell you in this article.
Many families in Russia need housing, and for most of them this problem is acute. So they decide to take out a mortgage loan.
What changes await us in the near future? Will they help solve these problems?
Planned changes to current legislation
The lower house of Parliament has received an initiative to provide a subsidy for mortgages, the so-called “children’s housing deduction.”
A certain share of debt obligations on housing loans for families having children will be able to be repaid from the federal budget.
Thus, a newborn child will enable the family to significantly reduce the cost of paying off the mortgage.
Politicians' proposals
The All-Russian Center for Living Standards believes that a third of Russians (29% of Russian citizens) have problems purchasing housing, as well as improving it.
Often the total area of square meters per person in a family does not exceed seven.
In addition, a third of Russian residents (29.4% of citizens) are not provided with housing. This figure includes citizens whose share of square meters of the total housing area is less than eighteen.
It is planned to provide a chance to write off debt obligations for families who need to pay off a mortgage, which is burdened by the appearance of children and, accordingly, new expenses.
The deduction should also vary depending on the number of children in the family: the greater their number, the higher the deduction amount should be, and vice versa. This idea was voiced by the Government.
The plans are to use the real experience accumulated by the regions, which allows families after the birth of their first and second children to reduce the interest rate on payments to fifty percent, and after the birth of the third child in the family, to completely write off the debt.
Reduction and write-off of fees in the regions
There is another option, valid in some regions of our country.
Thus, residents of Mordovia who have given birth to three children are deducted thirty percent from the unpaid amount of the debt, and with the birth of the fourth child, the mortgage debt is completely covered.
In the Republic of Tatarstan, families who have taken out a social mortgage loan are provided with a subsidy for partial repayment of the loan free of charge, but it is limited to 18 square meters (not exceeding the total amount of the outstanding loan).
In Tver, after the birth of the third and subsequent babies, only fifty percent of the loan amount must be repaid.
As can be seen from the above, regions currently have the right to use benefits on their territory, relying on the capabilities of the local budget.
Good to know: deputies from some parties in the State Duma are taking the initiative to adopt uniform rules for reducing the amount of debt for all citizens on equal terms.
Subsidy financing
Of course, doubts arise whether the country’s budget will be able to withstand such payments, especially during a crisis; almost four million of our fellow citizens pay mortgages, so it will be necessary to spend more than one trillion rubles to pay off even a fraction of the debt.
According to financial experts, a reduction in state budget costs is possible if a restriction is introduced on the composition of beneficiaries: among them are parents under 30 years of age and those who took out a mortgage loan with state support.
Bank benefits
A large number of financial institutions provide mortgage loans on preferential terms to families with children.
This approach is usually used by firms in which state ownership predominates.
For example, Sberbank of Russia is an active participant in the Mortgage Plus Maternity Capital program, which provides for a reduction in the down payment for young families - only (10!) percent of the total cost of housing (for childless families the contribution will be 15 percent).
After the birth of a child, the term of the mortgage loan agreement is extended by three years, and with the birth of a second child – by five years. During the grace period, it is permissible to pay only interest on the loan without paying the principal.
Expectations
In 2016, the lower house of Parliament considered a proposal with the idea of unconditionally receiving a housing child benefit upon the birth of a child in the family.
One way or another, it is not yet clear how the program will be financed and how it can be applied to those sections of society that have small children and a mortgage.
The child housing deduction, in other words, a benefit provided to young Russian families in connection with the birth of a child, should be implemented in the near future as an experiment, but so far there is no single scheme that would allow the implementation of preferential conditions for any type of mortgage applicable to all commercial credit organizations.
Watch the current video, which addresses the issues of children's mortgage deduction:
A family that has taken out a mortgage loan should be given the opportunity to write off part of the debt upon the birth of a child. Moreover, the more children, the greater the deduction. The idea voiced by RG was supported by the Commissioner for Children's Rights Pavel Astakhov.
“The newborn’s family needs housing more than anyone else,” he wrote on Twitter. According to Astakhov, it is possible to use the existing positive experience of the regions, when at the birth of two children the mortgage interest rate is reduced by 50 percent, and at the birth of a third - by 100 percent.
There are other schemes. In Mordovia, for example, when a third child is born, parents are “forgiven” 30 percent of the remaining mortgage debt, and when the fourth child is born, the entire loan can be written off. In Tatarstan, families who took out a social mortgage loan are provided with a free subsidy to pay off part of the debt, equal to 18 square meters (but not more than the entire amount of the unpaid mortgage).
In the Tver region, 50 percent of the debt is written off at the birth of three or more babies. That is, each region today has the right to independently establish benefits, focusing on the thickness of the local treasury. State Duma deputies propose to adopt uniform rules for writing off debts for the entire country.
The head of the State Duma Committee on Labor, Social Policy and Veterans Affairs, Olga Batalina, spoke to RG about the idea of a “children’s housing deduction.” They want to compensate the mortgage debt using government funds. Experts interviewed by RG supported the idea: this, they said, would not only solve the housing problem, but also increase the birth rate in the country. However, they doubted that the Russian budget would be able to handle such payments in today’s difficult economic conditions. Almost four million Russians have mortgage loans, and it could cost trillions of rubles to repay part of the debt.
It is possible to reduce treasury costs, experts say, but this will require reducing the circle of benefit recipients: for example, forgiveness of debts to parents under 30 years of age or to those who took advantage of a mortgage with state support.
Olga Batalina, Chairman of the Committee on Labor, Social Policy and Veterans Affairs of the State Duma of the Russian Federation:
The proposal to introduce a child housing deduction was born at the program forum “Effective Social Policy: New Solutions,” which took place at the end of March. One of the topics of discussion at the forum was the problem of providing housing for families with children, especially young families. Currently, such families can solve their housing problems by obtaining a preferential mortgage loan at 12 percent per annum under the programs of the Housing Mortgage Lending Agency.
At the forum, in addition to the reduced interest rate, it was proposed to introduce another support measure for young families with children and call it the “children’s housing deduction.” The essence of the proposal is that AHML partially repay the principal amount of the mortgage loan in connection with the birth of a child in the family. In this case, the birth of each subsequent child would allow families paying a mortgage loan to significantly reduce costs. The source of financing for this support measure will be funds from the Housing Mortgage Lending Agency.
The proposal for a “children’s housing deduction” was supported by the Ministry of Construction and Housing and Communal Services, AHML and was included in the Forum Resolution. “In the near future, United Russia, together with authorized departments, will begin a detailed study of this proposal and determine the parameters of a new measure to support young families.”
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