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Practical Asset Protection – Part 2 Homestead Exemption

Part 2 – Homestead Exemption

The California Homestead Exemption, like in most states, is intended to protect a certain amount of homeowner’s equity from creditors. The California homestead exemption amount is $75,000 for individual homeowners and $100,000 if more than one family member lives in the home. The homestead exemption amount is $175,000 for those 65 or older, those who are disabled or those with very low income.

California has two types of homestead exemptions. First, the automatic exemption, which protects the exemption amount from an involuntary sale of the home – such as a foreclosure. Second, the declared exemption, which protects the exemption amount from a voluntary sale of the home. For example, if you sell your home, creditors cannot reach the homestead exemption amount.

The automatic exemption is automatic – you don’t have to do anything. The declared exemption is not automatic. You don’t get it unless you record a Homestead Declaration with the county recorder. Here is a link to a Homestead Declaration Form from the Sacramento Law Library. 

 

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