As of August 2014, homesteading laws refer to exemptions to bankruptcies, and each state varies homesteading exemptions for Chapter 7 and Chapter 13 bankruptcy protection, according to NOLO. A homestead exemption may allow some debtors to make lower repayments by lowering the value of a home's equity if the property meets certain standards.Continue Reading
In California, homesteading laws work in two ways. Homeowners can declare a homestead, and laws provide for an automatic homestead exemption. Automatic exemptions occur when property owners live in the home continuously from the time a property lien was placed on the property up until the time the court determines the property is exempt, according to Sedgwick Law. As of January 2010, residents must prove the house is the principle dwelling of the owner to declare a homestead in California.
Florida's homestead exemption applies to property taxes. Owners can deduct the first $25,000 of assessed property value from property tax valuations, which can save taxpayers hundreds of dollars per year. If a home is worth at least $75,000, homeowners may deduct another $25,000 in valuation, according to the Broward County Property Appraiser's office in 2014.
Homesteading originally referred to settlers who were given free land in states outside the original 13 colonies, provided they farmed the land and produced crops. Homesteading ended in 1976, with the exception of Alaska where homesteading ended in 1986.Learn more about Real Estate