The maximum value of exempt property for a homestead declaration is $350,000. The legal value of the property is the amount appearing on the last completed county assessment roll at the county treasurer’s office. The previous value of exempt
property was $100,000. If a person filed a homestead declaration under the prior value, he or she does not need to refile to receive the $350,000 exemption.
If the value of the property exceeds $350,000, creditors may request the district court judge to partition the land and sell part of it or all of it. If property is sold, the person who filed
the homestead declaration has protection for the first $350,000 of proceeds. Sale proceeds up to $350,000 are exempt from creditors’ claims for 18 months.
Example 1:
Joe owns a house that has an assessed value of $80,000 with a $50,000 mortgage balance. Joe’s homestead declaration protects only the $30,000 equity Joe has in the house, even though the maximum exemption is $250,000 ($80,000 - $50,000 = $30,000).
Example 2:
Doug owns a home that has an assessed value of $425,000 with a mortgage balance of $10,000. His equity is $415,000 ($425,000 - $10,000 = $265,000). Doug’s homestead declaration protects up to $350,000 in value of the home. The remaining $65,000 is available to unsecured creditor's claims ($415,000 - $350,000 exemption). Creditors could force the sale of Doug's home to recover part or all the debt he owes them.