Federal homebuyer tax credit extended to members of military

Q: Did the federal homebuyer tax credit get extended for members of the military? -- Debbie H., Las Vegas

A: Your question is well-timed. This being Memorial Day weekend, a time for us to remember the sacrifices made by those who have defended our country, it seems like a good time to point out that the federal tax credit for homebuyers may have expired for most Americans on April 30, but it's still available to members of the U.S. military.

Members of the military can take advantage of the tax credit for first-time and repeat homebuyers until May 1, 2011.

The National Association of Realtors recently reminded military members about the special benefits made available to them in last year's extension and expansion of the homebuyer tax credit law.

NAR was a leading proponent in getting this tax credit extended into 2010 and expanded to include current homeowners, as well as members of our armed forces.

As NAR President Charles McMillan said, "NAR is the leading advocate for private property and homeownership issues, and firmly believes that those who are in service to their country should be full participants in the homebuyer tax credit law. These men and women are often hindered by hardships from full participation in the American dream of homeownership because their duty disrupts them in the buying and selling of a home."

As a former member of the military myself, I also believe the men and women who sacrifice so much to serve our country deserve a little special treatment.

Two special provisions in the tax credit law help members of the military, as well as those serving in the intelligence and foreign services.

Armed services members, as well as intelligence service and foreign service personnel, who were on active duty and out of the United States for 90 days during any part of 2009 get an additional year to buy their homes, extending the popular tax credit for them to May 1, 2011.

Another benefit is a waiver on the time of occupancy of the home purchased with the tax credit. By law, homebuyers who purchase their home using the tax credit must use that home as a primary residence for a period of no fewer than three years, or must forfeit the entire credit.

However, military, intelligence and foreign service members do not have to repay the credit if they have to sell their home for reasons relating to their military service after occupying it for fewer than three years.

Just to recap the tax credit amounts now available only to these important groups, first-time homebuyers who are eligible can obtain a tax credit of $8,000. Repeat buyers 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.

As part of the amended tax credit law passed late last year, income limits for eligible homebuyers were expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of their new home must not exceed $800,000.

Since the median price of a home sold in Southern Nevada today is about $142,000, that generous criteria obviously leaves plenty of home choices for military buyers looking to take advantage of this opportunity in the next 11 months.

For more information on such topics, consult a qualified local Realtor or visit lasvegasrealtor.com.

Rick Shelton is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 20 years. GLVAR has 12,500 members. To ask him a question, e-mail him at ask@glvar.org. For more information, visit lasvegasrealtor.com. Questions may be edited for space and clarity.