While the tax credit has expired for most buyers, military families should know that they are still eligible for the $8000 first time home buyer’s credit or the $6500 credit for current homeowners if they meet certain criteria. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010. 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. However, military members are an exception when they have to move due to military orders. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse). It’s called “qualified official extended duty”, and means living at least 50 miles from the home.
Another Military Benefit
Military families also get a break when they sell their homes. While most home owners must live in a home for two of the last five years in order to waive capital gains of up to $250,000 if single, and $500,000 if married, military homeowners only have to live in the home for two of the preceding ten years, if they are on qualified official extended duty! This ability utilizes a one time suspension on the home from the normal five year requirement, which cannot exceed ten years.
Still Time to Purchase a New Home
If you meet the above guidelines, there is still plenty of time build your brand new home or buy an existing home. Give me a call. We can discuss your situation, what you are looking for, and help you find financing. Your new home is waiting!
From IRS website:
“For federal tax purposes, the U.S. Armed Forces includes officers and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy and Air Force. The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel may qualify for certain tax deadline extensions because of their service in a combat zone.”