Who Qualifies for a Residential Homestead Exemption?

by Ann Johnson

The purpose of a homestead exemption is to help a family financially when displaced from their home. For example, when the court orders the sale of the home to pay off the family's debts, the homestead exemption reserves a portion of the sale for the family and those funds do not go to the family's creditors. The exemptions do not include all creditors, such as the mortgage holder and property taxes. If the property sells for just enough to pay off the property's mortgage and property taxes there will be no additional funds for the family.


Homestead laws vary by state. Not all states have homestead exemptions. Therefore, the only people who might qualify for a homestead exemption are those living in a state with homestead laws. The amount of the homestead exemption varies by state. In some states, the exemption covers the entire homestead, while others only cover a specific percentage or amount. Some states also have special conditions for qualification, such as age, disabilities or the length of time living in the property. States that don't have homestead exemptions include Rhode Island, New Jersey, Delaware and Pennsylvania.


In some states, homestead exemptions are automatic, and the head of the household doesn't have to file to qualify. In other homestead states, the head of the family is only qualified for a homestead exemption after properly filing in the state in which she resides.


A homestead exemption is a life estate, only in effect for as long as the holder of the homestead owns or leases the qualifying property. For example, if Mr. Jones and his family lives in a house on Elm Street and qualify for a homestead exemption on the property, that ends when Mr. Jones sells the property, and moves. If he purchases another house, he can qualify for a homestead exemption on the new home, providing he resides in a state, which has homestead laws, and he qualifies under that state's rules. A single person can qualify for a homestead, as can the head of the family. Each family can only hold one homestead at a time.


To qualify, the holder of a homestead must own or lease the family residence. If the family owns more than one house, the homestead exemption only applies to one of the properties. In essence, the family's equity in the property limits the amount of money they might receive after the court sells the property. If they have no equity in the property, which is the difference between the outstanding property debts and the current value of the property, there won't be any extra money after the sale.


About the Author

Ann Johnson has been a freelance writer since 1995. She previously served as the editor of a community magazine in Southern California and was also an active real-estate agent, specializing in commercial and residential properties. She has a Bachelor of Arts in communications from California State University, Fullerton.

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