House Passes Legislation Extending FTHB Tax Credit for Veterans

The House of Representatives voted unanimously Monday to extend the deadline for the home buyers’ tax credit for one group of Americans.

HR 3590 will allow eligible military personnel and foreign service and intelligence officers to apply for the $8,000 tax credit for one year beyond its current November 30 deadline.  Those meeting the underlying requirements for the credit must also be serving overseas or have spent at least 90 days deployed outside of the country during the current calendar year.  It is expected that about 350,000 military personnel and an unknown number of federal employees may be affected by the new law.

The bill, introduced by Representative Charles Rangel (D-NY) because it was thought that families serving overseas were being passed over for this one-time opportunity to  purchase a home.  It passed the Housed passed with 416 votes and 16 abstentions.

There is currently a battle being waged over extending the popular credit for all eligible persons and possibly even removing the requirement that the home be a qualified first-time purchase.  Many credit the current tax break for a recent surge in the housing market after months of rising inventories and falling prices.  Such an extension is strongly supported by the National Association of Realtors, the National Association of Homebuilders, and other major players in the housing industry, however, many argue against it on the basis of cost.

The Rangel bill will also prohibit the Internal Revenue Service from pursuing payback of the credit if the homeowner is deployed after receiving it.  Under the original law a homeowner was required to occupy the home for 36 months or the credit would be recaptured.  Because the military, the State Department and intelligence agencies frequently relocate their personnel and their families, some have been reluctant to apply for the credit even if they did purchase a home.

The bill must still be considered by the Senate but similar easy passage is expected.

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