In 2021, California significantly increased protection under the “Homestead Exemption” and “Homestead Declaration”.

Until 2021, the amount of the homestead exemption (protection) varied from $ 75,000 to $ 175,000 depending on the circumstances.

Now, the amount of the exemption varies between $ 300,000 and $ 600,000, adjusted annually for inflation, based on the median selling price of a single-family home across the county.

These two important exemptions can protect either all or part of an owner’s equity in a principal residence (house), held either in their name or in the name of their spouse (or both), even if the spouses reside separately, against any creditors who obtain legal liens against the house.

These exemptions apply regardless of whether the primary accommodation is held in full ownership or in a living trust. A dwelling includes a residence but can also include a mobile home, a trailer or a boat.

A judicial sale can only take place when the amount of a bid in a judicial auction exceeds the amount of the homestead exemption plus any additional amount needed to satisfy all liens and charges on the property.

If a sale takes place, part of the proceeds are exempt for six months after receipt, during which time they can be used to buy new home.

The homestead exemption, which applies automatically, protects a certain amount of equity against foreclosures by judgment creditors of a person’s or family’s primary home in California. It also applies when family property is damaged, destroyed or acquired for public use for the benefit of the product.

Equity is the amount by which the value of your primary residence exceeds the combined value of all secured loans (typically mortgages and lines of credit).

The automatic homestead exemption does not protect the proceeds from a voluntary sale. This additional protection requires a declaration of ownership.

Next, the homestead declaration requires the landlord to file a sworn and notarized homestead declaration form with the county where the primary accommodation is located.

Once filed, the declared property protects the same amount of equity as the property exemption, but this time also with respect to the proceeds of the sale of the voluntary sales of the principal home.

If a home is voluntarily sold, the homeowner has six months of protection to use the proceeds from the purchase of a new home and register a new declaration of ownership within that same period.

The date on which the declaration of homestead is filed is very important. The declaration does not apply to judgment privileges filed with the county prior to the declaration. It is therefore prudent to file your return early when no judicial privilege is imminent.

Additionally, if the owner purchases a new home within six months, the owner can register a new declaration of ownership. Any equity from the sale of the first home used to purchase the second home is also protected.

The homestead declaration, however, does not protect against the registration of child, family or spousal support judgments. As elsewhere, California law treats maintenance obligations as exceptional and sacrosanct.

Take an example: John and Mary Smith, a hypothetical married couple who own a house worth $ 400,000, with an outstanding mortgage balance of $ 200,000; the Smiths have $ 200,000 in equity.

The Smiths owe $ 80,000 to a judgment creditor who has filed a legal lien against their house. The Smiths are eligible for a homestead exemption amount of at least $ 300,000. Thus, every $ 200,000 of equity is protected from judgment creditors.

However, if the Smiths had paid off their mortgage, their equity would equal the total home value of $ 400,000 and the amount of the exemption would depend on the county in which they reside in California.

So, having an unpaid mortgage can help keep equity within the exempt amount and avoid a forced sale of the home.

The foregoing does not constitute legal advice. If you need advice on exempting or declaring homestead, consult a lawyer.

Dennis A. Fordham, lawyer, is a state bar certified specialist in estate planning, probate and trust law. His office is located at 870 S. Main St., Lakeport, California. He can be reached at This e-mail address is protected from spam. You need JavaScript enabled to view it. and 707-263-3235.