What is a Homestead?

A homestead is the dollar amount of equity you have in your home that you qualify to exempt from creditor seizure.

The dollar amount of the homestead you hold in equity in your home has priority on the title over most judgment liens and some government liens, but not your mortgages.

Two types of homestead protections are available to California homeowners:

• the declaration of homestead, which is recorded;  and

• the automatic homestead also called a statutory homestead exemption, which is not recorded.

Both homestead arrangements provide the same dollar amount of home equity protection in California.

However, you need to record a declaration of the homestead to receive all the benefits available under the homestead laws. These benefits allow you the right to sell, receive the net sales proceeds up to the dollar amount of the homestead and reinvest the funds in another home.

As a homeowner, you qualify for one of three dollar amounts of net equity homestead protection:

• a $75,000 equity as an individual homeowner with no dependents;

• a $100,000 equity as a head of household; or

• a $1750,000 equity if you are:
◦ 65 years or older;
◦ disabled; or
◦ age 55 years or older with an annual income of no more than $25,000 or a combined gross annual income of no more than $35,000 if married.

The homestead declaration needs to be signed, notarized, and recorded to take effect.

Your recorded homestead does not affect your creditworthiness.

Anyone of several individuals may sign and record the homestead declaration, including:

• you as the owner of the homestead;

• your spouse; or

• the guardian, conservator, or a person otherwise authorized to act on your or your spouse’s behalf, such as an attorney-in-fact.

Arizona’s homestead exemption laws protect up to $150,000 of a person’s equity in their dwelling from attachment, execution or forced sale. A person or married couple may only claim one homestead exemption and must reside in the dwelling for which the exemption is claimed.

33-1101. Homestead exemptions; persons entitled to hold homesteads

A. Any person the age of eighteen or over, married or single, who resides within the state may hold as a homestead exempt from attachment, execution and forced sale, not exceeding one hundred fifty thousand dollars in value, any one of the following:

1. The person’s interest in real property in one compact body upon which exists a dwelling house in which the person resides.

2. The person’s interest in one condominium or cooperative in which the person resides.

3. A mobile home in which the person resides.

4. A mobile home in which the person resides plus the land upon which that mobile home is located.

B. Only one homestead exemption may be held by a married couple or a single person under this section. The value as specified in this section refers to the equity of a single person or married couple. If a married couple lived together in a dwelling house, a condominium or cooperative, a mobile home or a mobile home plus land on which the mobile home is located and are then divorced, the total exemption allowed for that residence to either or both persons shall not exceed one hundred fifty thousand dollars in value.

C. The homestead exemption, not exceeding the value provided for in subsection A, automatically attaches to the person’s interest in identifiable cash proceeds from the voluntary or involuntary sale of the property. The homestead exemption in identifiable cash proceeds continues for eighteen months after the date of the sale of the property or until the person establishes a new homestead with the proceeds, whichever period is shorter. Only one homestead exemption at a time may be held by a person under this section.

Thinking of buying or selling? I’m happy to help!

I am never too busy for your referrals.

Stella Bonin
Associate Broker
480.797.4884 / 619.250.6214

stella.bonin@yahoo.com

Our Team serves all Southern California and Maricopa & Pinal Counties (AZ).

California Bureau of Real Estate Lic. # 01222569
Arizona Department of Real Estate Lic. # BR550696000

“Equal Housing Opportunity”

 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s