Today, as with every mid-December, the 2016 BAH rates were released. If you have not checked your rates for next year you can find the calculator here. For some this is great news, but for others it may not be so great news. It all depends on if your rates have increased or decreased.
Today, as I was noticing tons of comments and questions about the 2016 BAH rates, I realized there were a lot of common misconceptions and questions. Over the years as a landlord and real estate investor, understanding and interpreting BAH rates has become my best friend.
This is why I wanted to answer some come misconceptions and questions that seem to appear every year. I hope this helps make things clearer and prevents the stress that I experienced in the early years of my husband’s military career.
9 Questions About the 2016 BAH Rates
1. What is BAH?
The official DOD answer is the Basic Allowance for Housing (BAH) is a U.S. based allowance prescribed by geographic duty location, pay grade, and dependency status. It provides uniformed service members equitable housing, compensation-based on housing costs in local civilian housing markets within the United States when government quarters are not provided.
The simple answer is BAH is the military “allowance” that is tax free that changes based on your rank and location.
2. What does “with dependent” and “without dependent” mean on the calculator?
Every calculator you check will have two columns. One that is titled “with dependent(s)” and the other is “without dependent(s).” The “with dependent” applies if you are legally married or have dependent children if you are not married. The “without dependents” are for single military members who are not married or have children.
3. When does the new BAH take place?
The new BAH takes place as of January 1, 2016. As long as you have checked into your command by December 31, 2015 you are grandfathered into the previous rate if it decreases. On or after January 1, 2016, you will receive the new rates.
4. What happens if the rate decreased?
If the rate decreases you are grandfathered into the current rate. That means as long as you do not PCS away from the command (i.e. stay attached to the current base area), you will never receive less BAH than your current amount. If an area has seen substantial decreases in past years, one can find long-term service members having much higher rates than incoming service members. This is why it is always important to check the current calculator to prevent making decisions off of an inaccurate rate.
5. What happens if the service member is promoted and it is less than the grandfathered amount?
You will still receive the higher rate of BAH. The key to know, is you will never receive less BAH as long as your service members stay attached to the command.
6. My friend is located at the same duty station as myself and her rate went up and my decreased?
BAH increases based on rank and dependents or no dependents. The increase or decrease is based on a calculation and therefore does not impact each rank in the same manner. That is why it is important to look up every status as the rate is very individual.
7. If I live on base and our BAH increased, who receives the increase, base housing or the service member?
If housing is currently taking all of your BAH, than housing would receive the increased amount. The only time a member would receive the rate is if they are paying a specific amount for housing, and not all of their BAH.
8. My husband leaves for TDY in December, but won’t report to the next duty station until March. Which BAH do we get: the old or the new one?
Unless you are coming from overseas you always receive your leaving duty station’s BAH until you check into your new command. This means you would not receive the new BAH until March when you check in.
Side Note: Always check with your detailer/review your orders because orders can change everything with a twist or a unique wording/situation.
9. How does this affect landlords and tenants?
Depending on the area, many rental rates are tied pretty closely to BAH rates. Many service members strive to stay at or below BAH regarding their rent price. Many of us, even strive to include utilities within BAH. During a lease a landlord cannot raise rates and a tenant cannot ask for a decrease. Therefore the affect of BAH rise or drop does not come into play until after the lease expires.
As a landlord I always check market rates when a lease comes up for renewal and I recommend tenants do the same thing. This is especially important if a increase occurred, because many times the rental prices will follow this raise.
This is also true with a decrease. I know as a landlord I have some properties coming up for rent this summer. I was holding my breath to make sure my rental area BAH did not decrease. At the end of the day, knowledge is power and making educated decisions keeps you ahead of any potential surprises.
Want to learn even more about the 2016 BAH rates? You can find the entire primer for BAH allowances here. This primer goes in detail regarding the rules and regulations for BAH.
Did I miss any questions? What did your BAH do this year? Did it increase or decrease?0