How Do I Homestead My House?

When you hear the word homestead you may think of the old west or a home on the range, but homesteading refers to legal protections against having your primary residence being taken to pay debts. There are also tax benefits associated with homesteading a house.

What is a Homestead?

To homestead a house means to provide certain legal protection based on the laws of your state. Generally, the procedure protects a house against being taken by creditors to satisfy debt. There are exemptions to this protection, such as to satisfy the mortgage and property taxes. Other debtors can also place a lien on the house but can't take over the house or force its sale. Homesteading provides for a spouse to remain in a house despite someone else coming to own it other than the original spouse. Homesteading can also provide some tax relief.

How to apply for a homestead

Homesteading is done on a state level. Some states apply homesteading automatically, but many require paperwork be submitted. To make your house a homestead, it must be your principal residence and cannot be applied to more than one house. Check with your state to figure out its specific rules for homesteading, but it basically requires filling out a simple form and sending it in to the state.

References

• Homestead examptions and forms