Homestead
47. Homestead
Homestead laws are designed to protect small individual property owners, such as homeowners, from the ever-changing economic climate of the United States. Often when the economy changes, small property owners are unable to meet the demands of their creditors. Homestead laws allow an individual to register a portion of his real and personal property as “homestead,” thereby making that portion of the individual’s estate off-limits to most creditors. The idea behind these homestead laws is the preservation of the family farm, home, or other assets in the face of severe economic conditions.
The items and amounts of money that can be set aside as a homestead are varied. The rules governing which property can be registered as homestead property seem to adhere to regional patterns. Real property that may be subject to the homestead exemptions vary in value from a $300 exemption from judgments in Pennsylvania to a $500,000 exemption for persons over age sixty-two in Massachusetts. They vary in character from the District of Columbia’s allowable homestead of $1,625 worth of tools, to Colorado’s unlimited acreage or Texas’s 200 acres. In each case, the property that may be homesteaded is designed to perpetuate the family’s estate and improve its chances for survival in hard times.
Limitations
The homestead is a back-up and a type of insurance against unexpected catastrophe; it will not ordinarily protect you from a bad business deal or from ordinary bankruptcy. Nonetheless, because an unscrupulous person could manipulate the homestead protections as a shield from living up to his legal obligations, there is much case law on homesteads. Indeed, ordinary business and commercial creditors ordinarily may penetrate property set aside as homestead.
| Table 47: Homestead | ||||
|---|---|---|---|---|
| State | Code Section | Maximum Value Of Property | Maximum Acreage (Urban) | Maximum Acreage (Rural) |
| ALABAMA | §6-10-2; Const. Art. X, §205 | Const.: $2,000; Stat.: $5,000 | Const.: Lot Stat.: Lot or track | Const.: 80 acres; Stat.: 160 acres |
| ALASKA | 09.38.010 | $54,000 | ||
| ARIZONA | 33-1101 | $150,000 | ||
| ARKANSAS | 16-66-210; Const. Art. IX, §4, §5 | $2,500. All homesteads less than $1,000 assessed valuation are exempt from all state taxes referred to in art. XVI, §18 of Ark. Constitution. If homestead’s value exceeds $1,000, exemption shall apply to first $1,000 of valuation (Const. amend. XXII §1). | 1 acre but not less than ¼ acre | Cannot exceed 160 acres, will not be reduced to less than 80 acres. |
| CALIFORNIA | Civ. Proc. §704.710, et seq. For money judgments | $150,000 if either spouse is over 65 or disabled and unable to engage in substantial employment; $150,000 if person is 55 or older with gross income of not more than $15,000 or if married not more than $20,000 and sale is involuntary; $75,000 if debtor or spouse resides in house with at least one member of the family with no interest in the homestead; $50,000 for all others | ||
| COLORADO | 38-41-201 | $45,000 | No limits to acreage | No limits to acreage |
| CONNECTICUT | 12-81(21) | $10,000 if disabled veteran; only $5,000 exemption if loss the use of one arm or one leg; $3,000 maximum income if unmarried and over 65; $5,000 maximum income if married and over 65; $6,000 maximum income for all others--combined adjusted gross income and tax exempt interest | ||
| DELAWARE | Tit. 10 §4902 (personal property); Tit. 22 §1002 | $75 trade, business in New Castle, Sussex County; $50 trade, business in Kent County; homestead exemption for persons 65 and older to be determined by local ordinance | ||
| DISTRICT OF COLUMBIA | 15-501 (personal property) | $2,575 automobile interest, household items up to $8,625, family pictures not in excess of $400, tools of the trade up to $1,625 | ||
| FLORIDA | §196.031; Const. Art. X, §4 | $10,000 if person is over 65; $9,500 if totally disabled and is a permanent resident for 5 consecutive years prior to claim; $25,000 for taxes levied by governing bodies of school districts; $5,000 for all others | ½ acre | 160 acres |
| GEORGIA | 44-13-1 | $5,000 | ||
| State | Code Section | Maximum Value Of Property | Maximum Acreage (Urban) | Maximum Acreage (Rural) |
|---|---|---|---|---|
| HAWAII | 651-92 | $30,000 if head of family or 65 years old; $20,000 for all others | ||
| IDAHO | 55-1001, 1003 | Lesser of $100,000 or total net value of lands, mobile home, or improvements. Net value means market value minus all liens and encumbrances. | ||
| ILLINOIS | 735 ILCS 5/12-901 | $15,000, if 2 or more own property, value of each proportional exemption can’t exceed a total of $30,000 | ||
| INDIANA | 34-55-10-2 | $15,000 for residential; $8,000 for other real estate or tangible personal property; $300 for intangible personal property | ||
| IOWA | 561.1, et seq. | $500 | ½ acre | 40 acres |
| KANSAS | 60-2301, 2304 | $1,000 in ornaments, $20,000 in transportation, $7,500 in trade tools | 1 acre | 160 acres |
| KENTUCKY | 427.010, .080 | $5,000 plus $3,000 in any personal property | ||
| LOUISIANA | Const. Art. VII, §20 | $7,500 | 160 acres | 160 acres |
| MAINE | Tit. 14 §4422 | Aggregate interest not to exceed $35,000 (or $70,000 if have minor dependents) including exemptions for car, clothing, furniture, jewelry, and tools of the trade. $70,000 if debtor or dependent is either 60 or older, disabled, or unable to engage in gainful employment | ||
| MARYLAND | Cts. & Jud. Proc. §11-504 | $6,000 plus an additional $5,000 in a Title 11 bankruptcy in value, in real property, or personal property | ||
| MASSACHUSETTS | Ch. 188 §1, 1A | $500,000 | ||
| MICHIGAN | 600.6023 | $3,500 realty, $1,000 trade tools | Lot | 40 acres |
| MINNESOTA | 510.01, et seq. | $200,000, or if primarily agricultural, $500,000 | ½ acre | 160 acres |
| MISSISSIPPI | 85-3-21 | $75,000 | 160 acres | 160 acres |
| MISSOURI | 513.475 | $15,000 | ||
| MONTANA | 70-32-101, 104 | $100,000 | ||
| NEBRASKA | 77-3502 (taxation); 40-101 (judgments) | $12,500 | 1 acre; 2 lots | 160 acres |
| NEVADA | 115.010 | $350,000 | ||
| NEW HAMPSHIRE | 480: 1 | $100,000 |
| State | Code Section | Maximum Value Of Property | Maximum Acreage (Urban) | Maximum Acreage (Rural) |
|---|---|---|---|---|
| NEW JERSEY | 54: 4-8.57, et seq. ; 2A: 17-19 personal property | $1,000 personal property; Homeowner, $600 min. rebate if income is less than $125,000; min. is $500 if income is between $125,000 and $200,000 Renter, $150 if income does not exceed $100,000 | ||
| NEW MEXICO | 42-10-1, 9, 10 | $30,000 or in lieu thereof, $2,000 in any property; $500 for personal property | ||
| NEW YORK | Civ. Prac. L. & R. §5206 | $50,000 | ||
| NORTH CAROLINA | Const. Art. X, §2 | $1,000 | ||
| NORTH DAKOTA | 47-18-01 | $80,000 | ||
| OHIO | 2329.66 | $5,000 | ||
| OKLAHOMA | Tit. 31 §2 | 1 acre | 160 acres | |
| OREGON | 18.395, 18.402 | $30,000 or $39,600 if more than one debtor is subject to liability | 1 block | 160 acres |
| PENNSYLVANIA | Tit. 42 §8123; Tit. 53 §6926.1303 et seq. | $300 monetary exemption from judgment only; for senior citizens, a formula based on a sliding scale of income up to $15,000 | ||
| RHODE ISLAND | 9-26-4, 4.1 | $1,200 for tools, $8,600 for furniture, $300 for books, $10,000 for motor vehicles; $300,000 in real property | ||
| SOUTH CAROLINA | 15-41-30 | $50,000 up to a maximum of $100,000 if there are multiple exemptions on same living unit; various kinds of personal property | ||
| SOUTH DAKOTA | 43-31-4 | 1 acre; mineral lands: 1 acre | 160 acres; mineral lands: 40 acres placer claim; 5 acres lode mining | |
| TENNESSEE | 26-2-301 | $5,000 or $7,500 if more than one debtor is subject to liability; $12,500 up to $25,000 if 62 yrs. old | ||
| TEXAS | Const. Art. XVI, §51 | 10 acres | 200 acres | |
| UTAH | 78-23-3 | $5,000 if property is not primary personal residence, $20,000 if property is primary personal residence | ||
| VERMONT | Tit. 27 §101 | $75,000 | ||
| VIRGINIA | 34-4 | $5,000 plus if support dependent, then $500 for each dependent | ||
| WASHINGTON | 6.13.010, 030 | Choice of $40,000 in real property or $15,000 in personal property | ||
| WEST VIRGINIA | §38-9-1; Const. Art. VI, §48 | $5,000 in real property and $1,000 in personal property |
| State | Code Section | Maximum Value Of Property | Maximum Acreage (Urban) | Maximum Acreage (Rural) |
|---|---|---|---|---|
| WISCONSIN | 815.20; 990.01 (14) | $40,000 | Not less than ¼ acre or more than 40 acres | Same as urban |
| WYOMING | 1-20-101 | $10,000 |
Homestead
HOMESTEAD
The dwelling house and its adjoining land where a family resides. Technically, and pursuant to the modern homestead exemption laws, an artificial estate in land, created to protect the possession and enjoyment of the owner against the claims of creditors by preventing the sale of the property for payment of the owner's debts so long as the land is occupied as a home.
Laws exempting the homestead from liability for debts of the owner are strictly of U.S. origin. Under the English common law, a homestead right, a personal right to the peaceful, beneficial, and uninterrupted use of the home property free from the claims of creditors, did not exist. Homestead rights exist only through the constitutional and statutory provisions that create them. Nearly every state has enacted such provisions. The earliest ones were enacted in 1839 in the Republic of Texas.
Homestead exemption statutes have been passed to achieve the public policy objective of providing lodgings where the family can peacefully reside irrespective of financial adversities. These laws are predicated on the theory that preservation of the homestead is of greater significance than the payment of debts.
Property tax exemptions, for all or part of the tax, are also available in some states for homesteaded property. Statutory requirements prescribe what must be done to establish a homestead.
A probate homestead is one that the court sets apart out of the estate property for the use of a surviving spouse and the minor children or out of the real estate belonging to the deceased.
A homestead corporation is an enterprise organized for the purpose of acquiring lands in large tracts; paying off encumbrances, charges attached to and binding real property; improving and subdividing tracts into homestead lots or parcels; and distributing them among the shareholders and for the accumulation of a fund for such purposes.
homestead
home·stead / ˈhōmˌsted/ • n. 1. a house, esp. a farmhouse, and outbuildings. 2. Law a person's or family's residence, which comprises the land, house, and outbuildings, and in most states is exempt from forced sale for collection of debt. 3. hist. (as provided by the federal Homestead Act of 1862) an area of public land in the West (usually 160 acres) granted to any U.S. citizen willing to settle on and farm the land for at least five years.4. (in southern Africa) a hut or cluster of huts occupied by one family or clan, standing alone or as part of a traditional African village.DERIVATIVES: home·stead·er n.