Homestead Exemption
A legal protection that shields some or all of the value of your primary residence from creditors and reduces property taxes. In estate planning, it often protects the family home from being sold to pay the deceased person's debts.
Legal Definition
A statutory provision that protects a specified amount of equity in a debtor's primary residence from the claims of creditors, and in some states provides property tax reductions, surviving spouse protections, and restrictions on devise of the homestead.
Practical Example
In Florida, the homestead exemption protects the full value of your primary residence from creditors (with no cap). In Texas, the exemption protects your home and up to 10 acres in a city or 200 acres in a rural area.