Homestead Exemption

DEFINITION of 'Homestead Exemption'

Laws designed to protect the value of a home from property taxes and creditors following the death of a homeowner spouse. A homestead exemption can be found in state statutes and constitutional provisions across the U.S. and is an automatic benefit in some states. In states where the homestead protection is not automatic, homeowners must file a claim which must be re-filed when moving primary residences.

BREAKING DOWN 'Homestead Exemption'

The primary features of homestead exemptions are typically meant to provide shelter for the surviving spouse while preventing the forced sale of a home to meet creditor obligations and property taxes. Most homestead exemptions use a monetary value to determine property tax protection, implementing a progressive-style tax to home value in order to assure that homes with lower assessed value benefit the most from the exemption.

RELATED TERMS
  1. Waiver Of Exemption

    A provision in a consumer credit contract or loan agreement that ...
  2. Exempt Income

    Certain types or amounts of income not subject to federal income ...
  3. Asset Protection

    The concept of and strategies for guarding one's wealth. Asset ...
  4. Reassessment

    The process of redetermining the value of a parcel of real estate ...
  5. Tax Exporting

    The raising of revenue for one jurisdiction through the levying ...
  6. Nontaxable Dividends

    Dividends from a mutual fund or some other regulated investment ...
Related Articles
  1. Personal Finance

    Are You Missing Out On These Tax Exemptions?

    To lower your tax bill, make sure that you're taking all the exemptions that apply to you.
  2. Managing Wealth

    Economics of Owning a Vacation Home

    Discover the financial factors behind owning a second home and how weighing your options can determine if a vacation home is right for you.
  3. Personal Finance

    Your Property Tax Assessment: What Does It Mean?

    The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.
  4. Personal Finance

    8 States With Estate Taxes

    Understand the difference between the federal estate tax and state-specific estate taxes. Learn about some of the worst states with estate taxes.
  5. Personal Finance

    Your Property Tax Assessment: What Does It Mean?

    Understanding your property taxes can protect you from financial shocks.
  6. Personal Finance

    The 7 Best States For Property Taxes, and Why

    Understand why some states have high property taxes while others have low property taxes. Learn about the states with the lowest property taxes.
  7. Personal Finance

    10 Best States for Property Taxes in 2016

    Whether you are thinking of moving or just curious to see whether your state is in the top 10, these rankings are eye-opening.
  8. Personal Finance

    5 Groups That Don't Pay Taxes

    Now that you've paid your share, find out who didn't have to pay taxes this year.
  9. Personal Finance

    10 States With High Sales Taxes

    Most states have sales taxes of some kind for goods and services. Here's a rundown of the states that have the highest sales taxes.
  10. Retirement

    The Least Expensive States to Retire In

    Retirement time, and the livin' is easy in these locales.
RELATED FAQS
  1. Can credit card creditors put a lien in house property?

  2. What property / belongings can I keep after filing bankruptcy?

    Discover which types of property you can keep after filing bankruptcy by listing them as exempt from normal liquidation proceedings. Read Answer >>
  3. Is there any way to opt out of paying Social Security?

    Understand more about the purpose of the Social Security system and learn which groups of taxpayers are automatically exempt ... Read Answer >>
  4. Can creditors garnish my IRA?

    Find out how your IRA can be garnished by creditors, including how federal and state regulations differ and what exemptions ... Read Answer >>
  5. Transactions are exempt from registration where …

    Transactions are exempt from registration where … a. A sale, or offer of sale is made to ALL clients of a brokerage ... Read Answer >>
  6. How are capitalism and private property related?

    Read about the relationship between capitalism and private property rights, and learn why voluntary trade would collapse ... Read Answer >>
Trading Center