Military? You Might Be Eligible For The First Time Home Buyer Tax Credit

The 2010 home buyer tax credit it still available for some eligible military and certain other federal employees serving outside the United States.  You still have time to take advantage of this great home buying opportunity. 

If you’re a member of the military, foreign service or intelligence community¬†and ¬†served overseas for at least 90 days between Dec. 31, 2008, and May 1, 2010, you might be eligible for thousands of dollars in tax credits!¬† With the low interest rates now¬†is the¬†time to purchase¬†a first home or upgrade to another house.¬†

You don’t have a lot of time so you need to shop for your new home now.¬† April 30, 2011, is the last day you can put a house under contract, and June 30, 2011, is the final day to close on the home in order to get the home buyer tax credit.¬†

Do you qualify for a first time home buyer tax credit?

Here are some of the things about the home buying tax credit that you need to be aware of:

1. There isn’t much time left

One of the primary benefits of the tax credit is the deadline extension. April 30, 2011, is the last day¬†to get a signed around contract on a house, and June 30, 2011, is the final day to close on the home so shop now for your dream home! For more details- “IRS article First-Time Homebuyer Credit: Members of the Military and Certain Other Federal Employees“.¬†

2. When you need to buy your home

The incentive program requires that the home be your primary residence for at least three years. If you move or sell the house before then, the credit will have to be repaid. That requirement could be waived if you recieve government orders to move so make sure ou talk with a tax consultant before you make a home buying decision. 

3. An Exception to the Rule

The IRS allows an exception for someone who is forced to return to the United States for medical reasons before completing 90 days of qualified official extended duty…again talk to your tax consultant before you make a purchase.¬†¬†¬†

4. Eligibility for Repeat Buyers

First-time home-buyers might qualify for up to $8,000 in tax credits, but home buyers moving up might also quality as well.  A credit of $6,500 is available to taxpayers who have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new house is purchased. 

5. Income Limitations

Singles who earn a maximum of $125,000 and couples with joint incomes of up to $225,000 qualify for the full credit. Single people with incomes not exceeding $145,000 and couples with joint incomes of up to $245,000 may receive partial credit. 

6. Some Finer Points

  • Only primary residences are eligible.
  • You must be at least 18 years old.
  • The purchase price of the home can’t be more than¬†$800,000.
  • A first-time homebuyer is considered someone who has not owned a primary residence during the three years up to the date of the purchase.

If you already purchased a home, check with you tax professional about whether or not you qualify for the home buyer tax credit.