As of January 1, 2021, California has a new homestead exemption law for California which will allow debtors to protect as much as $600,000 of their home’s equity, depending on the median sale price of a home in their county. The new law reads 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:
(1) 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).
(2) 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.
The CA HOMESTEAD EXEMPTION BILL AB 1885 – Effective 1/1/2021.
The new higher California homestead exemption amount means more insolvent Californians can consider Chapter 7 bankruptcy as an option while still keeping their homes.
It’ is not clear what “The countywide median sale price for a single-family home in the calendar year prior” refers to, but most people think it refers to the California Realtors Association data that it keeps on that data.
Legal Consumer has made a California County Homestead Calculator widget that you are free to use. The calculator is just a simple searchable table that lists the 2020 average countywide median sale price, based on the data from January through November 2020 (as of this writing, January 3, 2021). The final numbers will be added when available, but they should not vary greatly.
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