This year’s Tax Day was not the homebuyer tax credit’s deadline for everybody.
Qualified service members of the Armed Forces, Foreign Service and intelligence community get an extra year to put the tax credit to use if they are on official extended duty abroad. April 30, 2011 is the last day for them to sign a binding sales contract that they must close by July 30, 2011. The maximum return is $8,000 and $6,500 for new and repeat homebuyers, respectively. Even on starter homes at $150,000, the return can account for more than 5 percent of the value.
Military members can apply the tax credit to a loan guaranteed by the Department of Veterans Affairs. VA loans carry myriad upsides, such as no money down and no private monthly mortgage insurance. The VA Home Loan Guaranty program caps interest rates for active-duty military members.
As with any tax credit program, there are some general prerequisites. The maximum purchase price of a home cannot exceed $800,000. To be considered first-time homebuyers, qualified members and their spouses cannot have owned a home in the last three years. Individuals with an annual income of $125,000 and married couples with that of $250,000 do not qualify for the tax credit. For repeat buyers, the only additional requirement is that they occupied their home for five of the last eight years.
Qualified members who have to move or sell the tax credit home within three years because of official extended duty, the recapture rule does not apply.
Comments on this entry are closed.