Homebuyer's Tax Credit Extended: Great News for Military Families

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.