How Do I Claim California Homestead Exemption?


/Written by Teo Spengler; Reviewed by Jann Seal, Licensed Real Estate Sales Associate. Former California Real Estate Sales Associate.; Updated December 09, 2018/ A homestead exemption protects your primary residence from creditors.

A homestead exemption protects your primary residence from creditors.

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Don't confuse claiming a California homestead exemption with staking a claim to a homestead. A homestead exemption has nothing to do with working 160 acres in order to become a landowner, a historical opportunity that is no longer an option in most of the country. Rather, a homestead exemption is a method of protecting your family home, or at least some of the equity in it, from creditors.

Tip

Pay attention to deadlines when applying for a homestead exemption. You must occupy the property by January 1 and apply by April 30 if you live in California. Other states have different filing dates, with most deadlines in the Spring.

Purpose of California Homestead Exemptions

A homestead, in the California homestead exemption codes, means a person's home. If you own and live in a house, condo, mobile home or boat, it qualifies as a homestead in this context. The purpose of the California homestead exemption is to protect that home from the grasp of people or business entities to which you owe money.

Generally a creditor can seize and sell your assets, including real estate, when you fall behind on a debt. The money from the sale is used to pay off the debts and the legal costs. California lawmakers wanted to protect homeowners from losing all equity in their homes and enacted the homestead exemption to shelter some of the equity in a home in case of a forced sale.

How the Exemptions Work

If you file for bankruptcy, get into other debt trouble or have a money judgment against you, your assets are at risk. A court may order that real property, such as your home, get sold to cover your debts. Often debts and legal fees are greater than the equity you have in the home. In that case, you end up without a home and without any means of buying one.

However, if you live in California, your home may be exempt from most debt sales if your equity is under a certain amount or if a certain part of that equity is protected. How much? That depends on your age, marital status and other factors.

The current exemptions (as of 2018) are: $75,000 for a single person, $100,000 if a spouse or family member shares the house with you or $175,000 if either you or your spouse is:

* over 65 years old, or * unable to work because of disabilities, or * over age 55 with income under $25,000 a year if single or $35,000 per year if married and the sale is involuntary.

If the market value of the home is not high enough to cover the amount of the debt plus the applicable exemption, the property cannot be sold for debt. Even if you have more equity and the home is sold, your homestead exemption amount must be paid to you in full from the proceeds. This will help you start over.

How to Claim an Exemption

In California court sales such as foreclosures, the homestead exemption is automatic as long as you live in the home as your primary residence. You can only have one legal homestead, so if you have several homes, only one can be your primary residence.

The automatic nature of the exemption means that you don't have to file a homestead declaration in order to claim the exemption. However, it's a good idea to file a homestead declaration in California in order to get extra protections. For example, if you file a declaration, it also protects the money you get from selling your home voluntarily for six months.

All you have to do to declare a dwelling as a homestead is to fill out a declaration form, available online, including from California law library websites. You'll have to fill in information such as your name and the description of your homestead. Then you should sign it before a notary and file it at the county recorder's office. For example, in San Francisco you file it at the county assessor's office in city hall. That is located at 1 Dr. Carlton B. Goodlett Place, Room 190, San Francisco, and business hours are from 8:00 am to 4:00 pm, Monday to Friday, except legal holidays.

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References (6) <#>

* LA Times: Homestead exemption Won't Protect Owner from Nonjudicial Foreclosure * Moran Law Group: 6 Things You Need To Know About The California Homestead * Sacramento County Public Law Libruary: Exemptions from the Enforcement of Judgments * California Code of Civil Procedure: ARTICLE 4. Homestead Exemption [704.710 - 704.850] * San Diego Law Library: Homestead Declaration * Cornerstone Home Lending: How to Get a Tax Break if You Missed Applying for the Homestead Exemption

Resources (3) <#>

* Sacramento County Public Law Library: Sample Homestead Form (DOC) * Official California Legislative Information: Code of Civil Procedure Section 704.910-704.995 * 1 Stop Legal Forms: Homestead Declaration Form

About the Author

Teo Spengler

From Alaska to California, from France's Basque Country to Mexico's Pacific Coast, Teo Spengler has dug the soil, planted seeds and helped trees, flowers and veggies thrive. A professional writer and consummate gardener, Spengler has written about home and garden for Gardening Know How, San Francisco Chronicle, Gardening Guide and Go Banking Rates. She earned a BA from U.C. Santa Cruz, a law degree from U.C. Berkeley's Boalt Hall, and an MA and MFA from San Francisco State. She currently divides her life between San Francisco and southwestern France.

Photo Credits

* marteau image by photlook from Fotolia.com

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