What Counts as a “Homestead” in California? Understanding Which Properties Qualify for Exemption
For many Californians facing financial distress, the most pressing concern is keeping a roof over their heads. Whether you’re behind on your mortgage, facing a lawsuit, or considering bankruptcy, understanding the California homestead exemption can be the difference between losing your home and preserving your most important asset. But one common question our Los Angeles foreclosure lawyers hear at Wadhwani & Shanfeld is this: What exactly counts as a homestead under California law?
The good news is that California’s homestead exemption laws are designed to protect a wide range of primary residences, not just traditional single-family homes. If you live in the property as your main residence, chances are it qualifies.
What Is the Homestead Exemption?
The homestead exemption in California protects a portion of your home’s equity from creditors. If you are sued and a creditor wins a judgment against you, the homestead exemption can prevent the forced sale of your residence—so long as your equity is within the limits set by law.
This exemption also plays a crucial role in bankruptcy. When you file for Chapter 7 or Chapter 13, the homestead exemption determines how much of your home’s value you can protect from being used to pay off creditors.
As of 2021, California significantly expanded and modernized its homestead exemption. The current law allows protection of between $300,000 and $678,391 in home equity, depending on the countywide median home price where the property is located. This means that even in high-cost areas like Los Angeles or San Francisco, homeowners may be able to shield hundreds of thousands of dollars in equity from creditors.
What Qualifies as a “Homestead”?
Under California law, a homestead doesn’t just mean a house with a picket fence. The key requirement is that the property must be your primary residence. If you live in it, sleep in it, and call it home, it likely qualifies.
Here are the types of properties that can count as a homestead:
Single-Family Homes
This is the most common example. Whether you own a house in the suburbs or a modest bungalow in the city, as long as it’s your primary residence, it qualifies for the homestead exemption.
Condos and Townhouses
Many Californians live in condominiums or townhouses, especially in densely populated urban areas. These properties are fully covered under the homestead exemption so long as they are owner-occupied and used as your main residence.
Mobile Homes and Manufactured Housing
Mobile homes, trailers, and manufactured houses also qualify, even if you rent the land they sit on. What matters is that you live there as your primary residence. Ownership of the structure itself, not necessarily the land, is sufficient to claim a homestead exemption.
Boats and Other Unconventional Residences
In some cases, even a houseboat or similar unconventional dwelling may qualify, so long as it is your fixed and primary residence. Courts generally look at whether the dwelling is permanent, where you receive your mail, and whether it serves as your consistent home base.
Multi-Family Homes
If you own a duplex, triplex, or fourplex and live in one of the units, you can still claim a homestead exemption for your portion of the property. However, the exemption does not extend to rental income or the value of units you do not personally occupy.
Land with a Dwelling
If you own land that includes a livable structure—like a tiny house, cabin, or trailer—that you live in as your primary residence, you can likely claim the exemption. Vacant land, however, generally does not qualify unless there is a dwelling and it is being used as your home.
How Do You Claim the Homestead Exemption?
California offers two versions of the homestead exemption:
- Automatic Homestead Exemption – This applies automatically to your primary residence. You do not need to file any paperwork to receive this protection. It can help protect against forced sale by a judgment creditor.
- Declared Homestead Exemption – This requires filing a form with the county recorder’s office. It may offer additional protections in some cases, such as when you voluntarily sell your home and want to protect sale proceeds for a period of time.
In bankruptcy, the automatic homestead exemption applies, and the court will use the current exemption limits based on your county and the property’s equity.
Why the Homestead Exemption Matters in Bankruptcy
If you’re filing for Chapter 7 bankruptcy, the homestead exemption can protect your home from being sold by the bankruptcy trustee—so long as your equity is within the protected limits. If your equity exceeds the exemption amount, the trustee may sell the property and distribute the excess to creditors.
In Chapter 13 bankruptcy, your home is not at risk of being sold, but the amount of non-exempt equity can affect how much you must repay to creditors over the life of your repayment plan. The more equity you can exempt, the less you may have to pay.
The expanded homestead exemption has made Chapter 7 and Chapter 13 much more accessible to homeowners across California, especially in high-cost areas where home values—and therefore home equity—have risen sharply in recent years.
Contact Wadhwani & Shanfeld
If you’re overwhelmed by debt and worried about losing your home, you don’t have to navigate the complexities of California’s homestead exemption alone. At Wadhwani & Shanfeld, we help individuals and families across California protect their homes and rebuild financial stability through strategic bankruptcy and debt relief solutions. Our experienced attorneys will help you understand your rights, determine how much of your home equity is protected, and explore your best options. Contact us today for a free consultation and start the path toward peace of mind and financial recovery.
Sources:
boe.ca.gov/proptaxes/homeowners_exemption.htm
dcba.lacounty.gov/portfolio/homestead-protection
