Last week Congress began working on making changes to the $8,000 home buyer's tax credit which has started giving hope to both the real estate industry and the home building industry. Congress is currently working on legislation to extend the life of the tax credit program which is scheduled to expire on November 30th.
In a united effort the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders are co-sponsoring a new ad campaign which is targeted at convincing Congress to grant the credit program an extension for one more year.
Congressman Charles Rangel (D) New York, the House Ways and Means Committee chairman, presented last week a new bill combined with several other smaller bills into a new larger bill called the "Service Members Home Ownership Act of 2009". It is expected that Congress will vote on this bill sometime this week.
Part of this new bill is to fix a flaw in the original legislation of the tax credit which requires buyers to occupy their first home for one and a half years to fully qualify for the credit. Sadly, the credit program has created several serious issues regarding those in the military and Foreign Service personnel who are transferred overseas.
While they are out on assignment, they're not occupying their homes and depending on the length of their assignment many times they may have to resort to either renting out their home or selling it all together. These situations can make them ineligible for the $8,000 credit under the current law and thus they would have to repay the credit back to the IRS.
It is a real shame that these brave American's have choose between their service work and home ownership and that's why this new legislation is so important because these American's spend so much time away from their family and their friends, why should they also have to also give up their opportunity for home ownership under the current law.
This newly revised bill would forgo the repayment requirement of the tax credit if a service member had to sell their home during the one and a half year period because they were required to transfer overseas or had to move to a new military instillation.
Additionally, the new bill would also extend the $8,000 credit for one more year for military personnel who may have missed claiming the tax credit because they thought they were not qualified because of an overseas assignment.
This one year extension would be in effect from November 30, 2009 to November 30, 2010 as long as they served outside the United States for at least 90 days during 2009.