In an effort to spur economic growth and home ownership, President Obama signed the Worker, Home Ownership, and Business Assistance Act of 2009 into law on Nov.6. 2009. And, a special provision in this new legislation will help military families take advantage of the tax credit for at least two more years. Now, military home owners won’t have to rush to close on a new home in order to be eligible for the $8,000 tax credit.
This bill's extension for military families, and active-duty servicemembers currently living overseas, is April 30, 2011 -- one year longer than civilian home owners’ extension -- and will also help financially strapped military personnel by making mortgage payments tax deductible.
The new law extends the first-time homebuyer credit for individuals on "qualified official extended duty" outside the U.S. who made home purchases before May 1, 2011 (or July 1, 2011, for taxpayers with binding contracts).
Qualified official extended duty is defined as duty outside the U.S. for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010. And, in order for married servicemembers to qualify for this extention, they must have served overseas for at least 90 days in 2009.
Current home owners will also benefit from the newly signed law. If they have been in their principal residence for five consecutive years home owners will have until April 30, 2010 to buy a new home and receive a $6,500 tax credit.
Charles McMillan, president of the National Association of Realtors, and a proponent of this bill, stated on the organization’s website that the original home buyers tax credit bolstered the national housing market and will continue to do so if extended.
“This important incentive is helping to stabilize the housing market, stimulate the economy, and create new jobs in communities all across our great nation,” said McMillan in a NARS press release.
“Extending and expanding the home buyer tax credit will enable more families to take advantage of low interest rates and affordable prices to invest in their future through home ownership,” McMillan added.
Additional provisions include expanded income limits for single and married home owners. Previously, single home buyers couldn’t make more than $75,000 to be eligible for the tax credit — the limit is now $125,000. And, the income limit for couples has been raised from $150,000 to $250,000. However, you’re not eligible for the tax refund if the purchase price of you new home is $800,000 or more.
Speaker Nancy Pelosi praised the legislation stating on her website that it has “already been successful” and that the new provisions will help more American home owners and will promote further economic recovery.
“We've seen the positive impact -- the steadier foundation in our housing market. Most significantly, we've watched a new generation of Americans start living out their dream of home ownership and economic security,” continued Pelosi.