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Military Personnel and The Home Buyer Tax Credit

It’s not news that the home buyer tax credit is set to expire on April 30th. In order to take advantage of the $8000 First Time Buyer credit or the $6500 credit, you must have an accepted offer by that date and the transaction must close on or before June 30th. The exception is for those in the military.

Kiplinger’s writes this about the tax credit for military personnel:

Homeowner breaks. And now service members serving outside the U.S. for at least 90 days between December 31, 2008, and May 1, 2010, have an extra year to qualify for the $8,000 first-time home-buyer credit or the $6,500 credit for current homeowners. They have until April 30, 2011, to sign a contract and until June 30, 2011, to close on the new house. Normally, if homeowners don’t live in the new house for at least three years, they have to repay the tax credit. But there’s an exception for members of the military who have to relocate because of government orders.

Military families also get a special break when they sell their homes. Most homeowners need to live in a house for at least two of the five years leading up to the sale in order to claim tax-free profits of up to $250,000 ($500,000 if married filing jointly). But because they move frequently, military families need to live in the house for only two of the preceding ten years in order to qualify if they are on qualified official extended duty, which means living at least 50 miles from home or in government quarters. 

Thank you to those that are serving or have served.

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