By: Tiffany Cambell February 14, 2012
The Basic Allowance for Housing (BAH) is computed annually by contracted providers in each zip code in the United States and overseas where bases are located.
It is a complex, but more than fair, system of determining how much of a housing allowance is needed in each area according to what the government has deemed is adequate housing. When computing the allowance several factors are taken into consideration:
- Rank.
- With or without dependents.
- The median cost of local rental housing within each zip code for apartments and homes.
- The local cost of utilities.
- Renters insurance based upon the median cost of housing in each zip code.
The BAH is the same for each branch of the military. The allowance is then added to the semi-monthly pay received by the service member. It is important to remember that an allowance is never taxed. Only military basic pay is taxed.
Who is eligible for BAH?
Eligibility depends upon each base. If you are assigned to a base that has not completed the housing privatization process whereby the military housing is handled by private companies, it will depend entirely upon your rank and the available housing units on your duty station. If the duty station you are assigned to have plenty of available housing units whether you are accompanied by a family or a single military person you will be assigned to base housing and will not receive BAH. If there is a waiting list for housing you will automatically receive BAH to enable you to find and pay for housing in the local area where you are stationed. Whether you are single or accompanied by a family will have no bearing on whether you receive BAH or not in those circumstances. On installations where privatization has already taken effect, you will have an option of living on base or off base and will automatically receive BAH unless you are under a certain rank and unaccompanied. In the case of privatized housing, you will pay rent to the company that has developed the housing on your installation.
What if I get more BAH than it costs me to rent where I am located?
You do not have to refund the extra money. It just means you have been a thrifty renter and are living under the median cost of the area you reside in. You are free to use the money as you wish. Should you be audited on your income tax and it is determined that you have extra income from you housing allowance; it is subject to taxation because it is then considered income versus an allowance. You can use your BAH for rent or for a mortgage payment should you decide to purchase a home.
