Homesteading your home

  • metta

    Posts: 39079

    Apr 30, 2014 11:43 PM GMT
    I was just talking to someone that told me that everyone should homestead their homes they live in. I guess it would add a little protection.


    Have you done it?


    California's homestead law
    http://www.sandiegolistforless.com/file.axd?file=Homestead.pdf



    "there are two different forms that need to be filed that have the word homestead in them. The first form needs to be filed with the tax assessor's office in the county in which the property is located. For homeowners, the filing of the property tax homestead exemption in California reduces the tax base by $7,000. Here's a link to the LA Tax Assessor's office where you can download the correct form assuming your property is located in LA county. There is no downside that I'm aware of to filing this form. You'll save about $80 a year by doing it.

    http://assessor.lacounty.gov/extranet/list/forms.aspx?catid=201,202,203

    The second homestead document is called a Declaration of Homestead and protects the homeowner in the event the equity in his house is attacked by creditors. In some states the homestead exemption is all the equity in the property e.g. Florida (hence O.J. Simpson's relocation)
    In California it is $50,000 $75,000 for a single owner and $75,000 $100,000 for a family. $175,000 over 65, diabled, or over 55 and low income. For the actual facts and figures and qualifiers, search under the California Bankruptcy provisions or California Declaration of Homestead provisions. Although a homeowner does receive this protection automatically upon the purchase and occupancy of a home, my understanding is that it is important to fill out the document and record it. By recording, I mean sending the form to the LA County Recorder's office with the appropriate fees for recordation. This is especially important to do if for any reason you have multiple residences and if it might be unclear as to your residence e.g. divorce situations. Also my understanding is that if you have a recorded homestead declaration and have a judgement against you, you can still sell your property protecting the above amounts as long as you purchase a replacement house prior to six months. Here's the site for form for recordation with the LA County Recorder"

    NOTE: I updated the numbers in green.

    http://www.lavote.net/GENERAL/PDFS/HOMESTEAD_DECLARATION.pdf

    http://forums.redfin.com/t5/Los-Angeles/To-Homestead-or-Not/td-p/16914
  • Posted by a hidden member.
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    May 01, 2014 1:18 AM GMT
    Besides that equity in Florida homesteads are protected from creditors--at least for as long as the property is homesteaded--homestead also reduces the taxable value with various exemptions** and also brings the home under Florida's Save Our Homes Act, similar to one in California, which keeps annual assessments of homesteaded properties to the lessor of CPI (inflation) or 3%.

    A home valued at $250,000 would pay between $3,748.00 - $4,410.00 with homestead or $4,462.00 - $5,250.00 without (plus any assessments), a savings of about 15%.

    A million dollar home pays $17,136.00 - $20,160.00 with homestead or $17,850.00 - $21,000.00 without, a savings of about 4%.

    The SOH values can be home-saving, particularly for anyone on a fixed budget. And now we have portability which means that you can take your SOH to another homesteaded property within the state if transferred within I think it is two years of selling the prior homesteaded property. Moving up, all the value is transferred. For downsizing in price, a percent is retained.

    The savings on that really add up over the decades. The taxes I pay currently are between 6 & 7 x's less (and that at these bubble bottom prices) than what a new buyer would pay who has no ported SOH value from a prior homesteaded property in the state.

    Not homesteading is not an option.

    **http://dor.myflorida.com/dor/property/taxpayers/exemptions.html

    Every person who owns and resides on real property in Florida on January 1 and makes the property his or her permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxes....

    ...(For citizens over 65) any municipality may adopt an ordinance to allow an additional homestead exemption in an amount up to $50,000. A person may be eligible for this exemption if he or she meets ... requirements


    Other exemptions include...

    •Widows and Widowers, $500
    •Disability, $500
    •Blind Persons, $500

    •Etc.
  • coolarmydude

    Posts: 9190

    May 01, 2014 1:35 AM GMT
    I just filed for a school tax exemption (similar to a homestead) on March 1st in NY, as well as for a Veterans exemption.