Real Estate Investment :Tax Credit Extended for Military Members

Article Summary:

Article Content:
Thanks to Brandon Fischer from VABenefitsBlog for this guest post.

Real estate agents were super busy this year as many families took advantage of the ,000 tax credit for first time homebuyers.  Millions of people cashed in, according to the Internal Revenue Service.  Because of the sheer number of applications sent in, the IRS was delayed for weeks.  Some people are just now receiving their returns!

Unfortunately, for the average population, the time for the tax credit has passed.  However, military personnel still have until April 30, 2011 to sign a sales contract and June 30, 2011 to complete the sale.  That’s one whole extra year to still be able to claim the tax credit.

via JColman

The extension was enacted because of the many service members still on active duty.  They do not have the time to search for a home much less think about claiming a tax credit.  So, the government hopes the extension will give such persons who start to return home the ample time to find and buy a home.

New rules and exclusive benefits apply:
- To qualify, service people must have served abroad a minimum of 90 days between January 1, 2009 and April 30, 2010.

- Former income limits have been raised. For a single-person buyer, the limit is 5,000.  For a married couple, the limit is 5,000.  Allowances might be made for some above the annual income.

- The potential home must be less than 0,000.

- Also new, repeat homeowners can take advantage of a ,500 credit. The homebuyer must have lived in the previous principle residence for five consecutive years to be entitled to the credit.

- Sometimes, the government requires some of the tax credit to be repaid. However, qualified service members who have to move from a tax credit home due to leaving for duty are exempt from having to pay back the tax.

Other Outside Benefits
The tax credit should also prompt service members to take advantage of great government loan options such as VA loans.

No money down and low closing costs are two of the many advantages of a VA loan.  So, the ,000 tax credit could be used for other expenses that go into buying a home. Mortgage rates are low, and the VA does not require a monthly or upfront insurance payment.

With more families benefiting from the tax credit next year, the real estate market will continue to work its way back up to its former glory and service members will reap the rewards.

Share This



———————