California's New Homestead Exemption for 2021
On January 1, 2021, a major change to California’s homestead exemption will go into effect. This new law provides debtors with more power to protect their homes and is a great benefit to consumers up and down the Golden State.
What is a homestead exemption and how does it work in a bankruptcy?
The homestead exemption protects, or “exempts”, a certain dollar amount of the equity in your home from creditors. Prior to the new law, homestead exemptions ranged from $75,000 to $175,000. The amount you qualified for depended on your age, marital status, as well as other factors. These exemption amounts have become quite outdated and are hardly suitable given today’s higher property values.
What is the new California homestead exemption law?
Assembly Bill 1885 approved by California Governor Gavin Newsom is as follows:
“SECTION 1. Section 704.730 of the Code of Civil Procedure is amended to read:
704.730. (a) The amount of the homestead exemption is the greater of the following:
The countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed six hundred thousand dollars ($600,000).
Three hundred thousand dollars ($300,000).
(b) The amounts specified in this section shall adjust annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.”
In layman’s terms, you are allowed a minimum homestead exemption of $300,000. This exemption can be a maximum of $600,000, depending on the prior year’s median home sale price in the county in which you reside.
For example, if the median sale price in your county is $400,000, you are allowed a homestead exemption of up to $400,000. Alternatively, if the median sale price in your county is $800,000, you are only allowed the maximum of a $600,000 homestead exemption.
Remember, no matter what the median sale price is in your county are guaranteed a $300,000 homestead exemption. So, if the median sale price is $275,000 in your county, you are allowed a $300,000 homestead exemption as well.
Additionally, these exemptions will be adjusted annually as to take inflation into consideration.
How can I find what the exemption is in my county?
The new law states that the homestead exemption is based on the “countywide median sale price.” However, the law does not indicate where consumers can find this median price and nowhere in my research did I find this information provided by the State of California.
However, the California Association of Realtors is a fantastic resource that has the most up to date median sale prices per county in California. Below I have provided the approximate median sale price by California county. This approximate amount was determined by taking the California Association of Realtors data on median sales prices from January 2020 through December 2020 and calculating the average for each county.
You can find The California Association of Realtors historical housing data here.
Please note, these amounts are approximate. This table is intended to be a guidepost and not evidence as to the median sale price in your county. I highly recommend meeting with your attorney to determine your allowed homestead exemption.
| COUNTY | AVERAGE MEDIAN SALE PRICE FOR 2020 |
|---|---|
| Alameda | $1,001,272 |
| Amador | $346,367 |
| Butte | $384,781 |
| Calaveras | $366,409 |
| Contra-Costa | $737,000 |
| Del Norte | $290,100 |
| El Dorado | $529,164 |
| Fresno | $309,029 |
| Glenn | $298,356 |
| Humboldt | $338,137 |
| Kern | $277,775 |
| Kings | $264,171 |
| Lake | $294,246 |
| Lassen | $218,521 |
| Los Angeles | $639,043 |
| Madera | $311,709 |
| Marin | $144,4417 |
| Mariposa | $358,429 |
| Mendocino | $465,047 |
| Merced | $301,350 |
| Mono | $743,867 |
| Monterey | $750,490 |
| Napa | $769,490 |
| Nevada | $453,021 |
| Orange | $893,129 |
| Placer | $526,700 |
| Plumas | $332,875 |
| Riverside | $457,474 |
| Sacramento | $416,749 |
| San Benito | $637,747 |
| San Bernadino | $343,638 |
| San Diego | $701,213 |
| San Francisco | $1,646,125 |
| San Joaquin | $414,474 |
| San Luis Obispo | $659,237 |
| San Mateo | $1,675,558 |
| Santa Barbara | $823,708 |
| Santa Clara | $1,372,408 |
| Santa Cruz | $972,833 |
| Shasta | $307,554 |
| Siskiyou | $248,308 |
| Solano | $489,754 |
| Sonoma | $695,219 |
| Stanislaus | $359,583 |
| Sutter | $339,108 |
| Tehama | $276,604 |
| Tulare | $267,142 |
| Tuolumne | $317,875 |
| Ventura | $714,146 |
| Yolo | $485,401 |
| Yuba | $333,162 |