When you own your primary residence in California, you have access to special homestead rights. Claiming these homestead rights can protect the equity you accumulate in your property. For example, it can protect your equity if you file for bankruptcy or if you are sued. You’ll have certain protections automatically, but you may also have to take action to reap the benefits of others.
See, California automatically protects your primary residence from being sold if you owe less than the exempt amount, but of you formally declare your property’s homestead status, you get more protection. So, if you choose to sell the home to pay off debts instead of selling under court order, you get extra protection if you formally declared the home your primary residence.
California also has a law that protects the equity of your home from creditors. If your debts are less than a set exemption, you simply can’t be forced to sell your home just because you have been sued. Also, if you do end up having to pay more than the exemption, you will still be able to keep your exempt amount, even if you do have to sell. If you have formally declared the home your homestead, this protection exists even if the court forces you to sell. Then, you just have to reinvest the money from your exemption into another homestead within six months.
California also lets you exclude the first seven grand of property value from taxation. To claim this exemption, you just need to file the property as your homestead at the county assessor’s office. Then, it will remain unless you sell the property or you go and change the status yourself.
Thinking of Purchasing a Home in Irvine, California?
If you’re thinking about buying a home in Irvine or any of the surrounding communities, we can help you find one that’s just right for you. Call us at 949-385-1684 or get in touch with us online to let us know what you’re looking for.
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