Homestead Exemption
Through the homestead exemption definition, we understand the legal instrument that provides physical and financial shelter in dire situations. The homestead exemption legal provision can be applied following the death of the homeowner’s spouse or in case of a bankruptcy declaration. Through the homestead tax exemption, surviving spouses can also obtain ongoing property-tax relief on a gradient scale that impacts lower assessed value homes the most.
What is the Homestead Exemption?
Across America, there are many instances where the homeowner is also the main provider for a family. The homestead exemption protects a family from winding up homeless in some of the worst scenarios imaginable. The death of a spouse who, aside from being the homeowner, was also the main provider of a family can shatter families and lives as creditors try to cover their debt without taking into account the family’s trauma.
A family who recently experienced loss or filed for bankruptcy is protected from creditors in these traumatic situations through a homestead exemption. As it covers the home, the homestead exemption provides both a physical shelter and a financial umbrella as the creditors won’t be able to force-sell the family’s primary residence.
However, there is one thing that a homestead exemption can not do. In case the homeowner defaults on their mortgage, the homestead exemption is unable to block a bank foreclosure. In case the possibility of defaulting on a mortgage ever comes up, and the scenario fits, any homeowner should apply for the benefit and check with local government officials to see if they can benefit from it.
How does Homestead Exemption Work?
Only a few states or territories do not provide homestead exemption provisions (New Jersey, Pennsylvania). Still, while the majority can apply it, the level of protection and its application differs by state. Some states grant the homestead exemption automatically, while others require claims to be filed from homeowners.
It is necessary to understand that only the homestead property can be protected from creditors through the homestead exemption. The homestead property is the primary residence property. So, just to clarify, the holiday home is not covered by the homestead exemption. If the surviving spouse changes their primary residence, they must claim homestead exemption again for the new primary residence.
Popular Real Estate Terms
People say, in real estate, there's a lot more than meets the eye. If you're connected to the housing market in any way, you've probably heard the term "implicit cost." It sounds fancy, but ...
Bank financing to a homeowner based on his dollar equity in the home. The interest rate typically fluctuates such as being based on the change in the prime interest rate. Interest expense ...
The appellant definition references a concept related to legal proceedings. The appellant is the individual who is dissatisfied with the judgment in a lawsuit and asks for a superior court ...
Detailed financial accounting of all the credits and debits for the buyer and seller upon consummation of a real estate sale. ...
Board used when connected as a floor. It may also be used as a strip in a wall or door. ...
material placed on the outside surface of a structure such as aluminum or vinyl siding on a house. It is cost-efficient because it eliminates the need for repeated painting. Siding provides ...
Reduction of part of the balance of property by charging an expense or loss account. The reason for a write-down is that some economic event has occurred indicating that the asset's value ...
Timber in an original form, such as a pole. ...
One tenth of a cent. Mills are a common term in expressing tax rates per dollar of assessed valuation. For example, a property is taxed at the rate of 80 mills. If a property were assessed ...
Have a question or comment?
We're here to help.