Service Members Get Tax Credit Extension
As you should already know, the $6500/$8000 home buyer tax credit is ready to expire in about four days, potentially taking with it much of the motivation for buying a new home and making a lot of people wonder what the real estate market will look like come May 1st. However, it appears that members of the military may qualify for a one year extension of the credit.
According to the National Association of Home Builders, Congress has granted an extension of the credit to military members who qualify. The following exemptions and definitions apply:
Exemption From Tax Credit Recapture Rules
- Typically, homes that are sold or that cease to be used as a principal residence within three years of the initial purchase are subject to recapture of the tax credit.
- However, qualified service members who sell or move from a tax credit home within three years of the initial purchase due to official extended duty are exempt from the recapture rule.
Extension of Tax Credit Deadlines
- The home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.
- However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.
- A person who is forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States may qualify for the one-year extension.
- “Qualified service member” means a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.
- “Official extended duty” means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.
We’re glad to see this extension for our service members and applaud Congress for taking this step.