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Q.What is the homestead exemption?
A.The homestead exemption protects a fixed amount of equity in a primary residence (declared a homestead) from judgment creditors.
Different states provide a different homestead exemption amount. Florida and Texas both have an unlimited homestead exemption amount that can be protected from creditors. California, on the other hand, limits the amount protected to between $50,000 and $150,000 depending on the property owner(s) age, marital status, and income. In California, the exemption amount is as follows:
- If you are single, the homestead exemption protects $50,000 of your home equity.
- If you are married, the homestead exemption protects $75,000 of your home equity.
- If you are single AND (1) age 65 or older or (2) physically or mentally disabled, or (3) age 55 or over with less than $15,000 in annual gross income, then the homestead exemption protects $150,000 of equity.
- If you are married AND either spouse is (1) age 65 or older or (2) physically or mentally disabled, or (3) age 55 or over with less than $20,000 in annual gross income on your joint tax return, then the homestead exemption protects $150,000 of equity.
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