A homestead exemption is a legal regime that protects the value of a residents home from property taxes, creditors, and circumstances that arise from the death of the homeowners spouse. Homestead exemption laws typically have four primary features:
- A homestead is the one primary residence of a person, and no other exemption can be claimed on any other property anywhere, even outside the boundaries of the jurisdiction in which the exemption is claimed.
- A homestead exemption is most often only a fixed monetary amount, such as the first $250,000 in value.
- The homestead exemption automatically attaches to the persons interest in identifiable cash proceeds from the voluntary or involuntary sale of the property.
- The homestead exemption does not attach to the persons interest in consensual liens, such as a mortgage or deed of trust, a mechanics or materialmans lien, or a lien for labor or materials.
The homestead exemption is available to any adult (18 or over) who resides within the state, and only one homestead may be held by a married couple or a single person. The value of the homestead refers to the equity of a single person or married couple, which is calculated by subtracting all liens and encumbrances from the fair market value of the homestead property. In Arizona, a homestead exemption protects $150,000 equity in a persons dwelling from attachment, execution, and forced sale. If a persons equity exceeds $150,000, a creditor may force the sale of the property. A person who is entitled to a homestead exemption holds the exemption by operation of law, and no written claim or recording is required.
