Veterans Take note ~ Tax Credit Extension for Qualified Service Members

Tax Credit Extension for Qualified Service Members

Some recent home buyers anxiously await their return for the homebuyer tax credit. However, certain military personnel still have a chance to apply the tax credit when they file in 2011.
Qualified service members on official extended duty overseas who serve in the Armed Forces, Foreign Service and intelligence agencies have an exclusive extension on the home buyer tax credit. These qualified members have until April 30, 2011 to sign a binding sales contract. By July 30, 2011, they must close the deal.
For active-duty military members who will return to Buckley Air Force Base near Denver after extended duty, the extension on the tax credit will likely be applicable. New home buyers can earn a maximum of $8,000 in return, and repeat buyers’ maximum peaks at $6,500. The credit could account for more than 5 percent of starter homes valued at $150,000.
The tax credit can even be applied toward a loan backed by the Department of Veterans Affairs. Active-duty personnel may find interest in VA loans for their caps on interest rates and likelihood of no money down.

There are some general constraints when using the home buyer tax credit extension:

-First-time home buyers are considered members and their spouses who have not owned a home in the last three years.
-The purchase price of the house cannot exceed $800,000.
-Married couples with an annual income of $250,000 and individuals with an annual income of $125,000 are disqualified from the tax credit.
-Repeat home buyers can qualify for the $6,500-maximum. None of the requirements change, but the buyer must have occupied the previous residence for five of the last eight years.
If qualified members have to move or sell the tax credit home within three years of purchase because of official extended duty, the tax return money will not be recaptured.

Guest Post by James Kelley who blogs on veteran’s issues and real estate in the U.S. at VA Benefit blog. He also works for VA Mortgage Center proudly serving American military Families as the nations’ premier VA lender.