Returning military have time to take advantage of homebuyers' tax credits

 After a tour of six months of combat duty in Iraq, Ben Cooper proposed to his girlfriend Amanda Rockow when he returned home in October.

 The newly engaged couple decided they should start their life together by becoming first-time homebuyers.


And fortunately, they have an extra year to take advantage of the $8,000 tax credit for first-time homebuyers. Military personnel and certain other federal employees who served outside the country for at least 90 days have until next April to qualify for the tax credit offered to first-time buyers and the $6,500 credit available to repeat buyers.

The deadline has come and gone for most taxpayers, who had to enter into a contract to purchase a principal residence by April 30. But qualified service members could sign a contract by April 30, 2011 and still get the money.

Those who qualify include active duty or reservists or their spouses who serve on qualified official extended-duty service outside the country for at least 90 days between Jan. 1, 2009 and April 30, 2010. According to the IRS, only one spouse need be overseas on official extended duty for the required time to qualify.

Cooper did not know that the tax credit was extended for service members until he talked to his Realtor, Jim Kibby of Nothnagle Realtors in Hilton. The tax credit will be a tremendous help financially in affording his first home, says Cooper, 21. He is currently working three jobs to achieve his dream of home ownership and looking at homes in the $80,000 to $90,000 range in a rural or suburban area.

When he first started searching for homes in February, Cooper found the competition to be tough, with many buyers vying for homes in the same price range.

Now that the tax credit incentive has expired for most people, there's a bigger selection, Cooper says.

 

"There's a lot less competition and a lot more homes to choose from," Cooper says.

Indeed, there are fewer first-time buyers in the market in the post tax-credit era, says Kibby, Cooper's Realtor. That may give the people who are currently in the market an upper hand, he says.

"It'll help with negotiations," Kibby says.

 

If you are a service member thinking about buying a home, now is a good time to look, says Elaine Hanford, an agent at Nothnagle Realtors' Irondequoit office.

She is currently working with a military family where the husband is in Afghanistan, sending photos of the homes that his wife visited via e-mail.

That couple didn't know about the program until they met with a Realtor, she said.

 

"There's less competition and less stress," Hanford says of the current market.