First time home-buyer tax credit extended for troops overseas

There has been a lot of controversy over extending the $8000 tax credit beyond the current expiration date of November 30, 2009. While home builders, lenders, realtors, and almost anyone employed in the housing industry have been aggressively lobbying to have the bill extended, time is running out, and no decision has been made to date.

Dave Kavanaugh, serving in the National Guard, was deployed for his second tour of duty overseas in February, and had told his father, Jerry Kavanaugh that he wanted to purchase a house when he returned. Jerry, concerned that the credit might not be extended, contacted his Congressional Representative Steve Kagan, who took the plea to Congress. Congress took immediate action, and voted to extend the credit for one year to the 350,000 soldiers who are currently deployed overseas.

This bill will extend the $8000 tax credit until November 30, 2010 for any members of the service who has served overseas at least 90 days during 2009 and who are otherwise eligible. The credit will also be extended for Foreign Service and intelligence personnel who have been deployed overseas this year.

The bill would also prohibit the IRS from "recapturing" the $8,000 credit when service members are forced to sell or rent out their houses because they are ordered to deploy to a different duty station, overseas or inside the country.

Currently, buyers who obtain the credit must use their houses as a principal residence for 36 months or repay the credit to the IRS. This provision has caused military and Foreign Service personnel, who are moved around frequently, to hesitate to apply for the tax credit, even when they have purchased homes.

Service Members Home Ownership Tax Act (H.R. 3590), as the bill is known, is expected to pass through the Senate equally quickly and be signed into law by President Obama.

HR 3590 is not only a victory for those who are serving our country, but is also a testimonial to the fact that our Congressional Representatives are finally listening to us, the taxpayers, and the backbone of this country.

For the rest of the “would be” home owners” who are still waiting to hear if the tax credit will be extended, the battle wages on. It is a bipartisan battle with advocates and naysayers on both sides of the aisle. While almost everyone recognizes the need to stimulate the housing sector of the economy, the primary obstacle in extending the credit remains the cost.

Written by Shelby Bateson