Two special provisions in the present tax credit law will assist members of the military, intelligence and foreign services in taking advantage of the homebuyer tax credit, said National Association of Realtors President Charles McMillan, broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

Armed services members, as well as intelligence service and foreign service personnel, who are on active duty and out of the U.S. for 90 days during any part of 2009, get an additional year to buy their homes, to May 1, 2011.

Another benefit is a waiver on the time of occupancy of the home purchased with the tax credit. Homebuyers who purchase their home using the tax credit must use that home as a principal residence for a period of no fewer than three years, or must forfeit the entire credit. Military, intelligence and foreign service members do not have to repay the credit if they have to sell their home after fewer than three years occupancy due to official business.

First-time homebuyers who are eligible can obtain a tax credit of $8,000. Current homeowners are eligible for a $6,500 tax credit, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years. 

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.

The homebuyer tax credit was recently extended. All qualified homebuyers are urged to act and have a written, binding contract by April 30, 2010 (close by July 1, 2010)

Courtesy of National Association of Realtors.

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