diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceVariable/KotlinIntroduceVariableHandler.java b/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceVariable/KotlinIntroduceVariableHandler.java
index b458f0b15be..44767692efa 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceVariable/KotlinIntroduceVariableHandler.java
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceVariable/KotlinIntroduceVariableHandler.java
@@ -330,8 +330,7 @@ public class KotlinIntroduceVariableHandler extends KotlinIntroduceHandlerBase {
                 JetProperty property = psiFactory.createProperty(variableText);
                 PsiElement anchor = calculateAnchor(commonParent, commonContainer, allReplaces);
                 if (anchor == null) return;
-                boolean needBraces = !(commonContainer instanceof JetBlockExpression ||
-                                       commonContainer instanceof JetClassInitializer);
+                boolean needBraces = !(commonContainer instanceof JetBlockExpression);
                 if (!needBraces) {
                     property = (JetProperty)commonContainer.addBefore(property, anchor);
                     commonContainer.addBefore(psiFactory.createNewLine(), anchor);
@@ -548,7 +547,7 @@ public class KotlinIntroduceVariableHandler extends KotlinIntroduceHandlerBase {
 
     @Nullable
     private static PsiElement getContainer(PsiElement place) {
-        if (place instanceof JetBlockExpression || place instanceof JetClassInitializer) {
+        if (place instanceof JetBlockExpression) {
             return place;
         }
         while (place != null) {
@@ -559,8 +558,7 @@ public class KotlinIntroduceVariableHandler extends KotlinIntroduceHandlerBase {
                 }
             }
             if (parent instanceof JetBlockExpression
-                || (parent instanceof JetWhenEntry && place == ((JetWhenEntry) parent).getExpression())
-                || parent instanceof JetClassInitializer) {
+                || (parent instanceof JetWhenEntry && place == ((JetWhenEntry) parent).getExpression())) {
                 return parent;
             }
             if (parent instanceof JetDeclarationWithBody && ((JetDeclarationWithBody) parent).getBodyExpression() == place) {
@@ -596,7 +594,7 @@ public class KotlinIntroduceVariableHandler extends KotlinIntroduceHandlerBase {
                     result = parent;
                 }
             }
-            else if (parent instanceof JetClassBody || parent instanceof JetFile || parent instanceof JetClassInitializer) {
+            else if (parent instanceof JetClassBody || parent instanceof JetFile) {
                 return result;
             }
             else if (parent instanceof JetBlockExpression) {
diff --git a/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt b/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt
new file mode 100644
index 00000000000..ace8099d55b
--- /dev/null
+++ b/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt
@@ -0,0 +1,4 @@
+class C {
+    deprecated(<selection>""</selection>)
+    init {}
+}
\ No newline at end of file
diff --git a/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt.conflicts b/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt.conflicts
new file mode 100644
index 00000000000..1568c6aea62
--- /dev/null
+++ b/idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt.conflicts
@@ -0,0 +1 @@
+Cannot refactor in this place
diff --git a/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
index 2d1b47fe1da..507243e2705 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
@@ -145,6 +145,12 @@ public class JetExtractionTestGenerated extends AbstractJetExtractionTest {
             doIntroduceVariableTest(fileName);
         }
 
+        @TestMetadata("InsideOfInitializerAnnotation.kt")
+        public void testInsideOfInitializerAnnotation() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceVariable/InsideOfInitializerAnnotation.kt");
+            doIntroduceVariableTest(fileName);
+        }
+
         @TestMetadata("IntroduceAndCreateBlock.kt")
         public void testIntroduceAndCreateBlock() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceVariable/IntroduceAndCreateBlock.kt");