TX Homestead Law

Texas Homestead Laws

Texas Homesteads

The TX homestead law protect your residence and personal property especially in bankruptcy situations. According to the Texas constitution, the term “homestead” refers to a person’s home and the land that surrounds the home.  Under this constitution, creditors cannot levy foreclosures on a debtor’s homestead.

But a single person’s or family’s home can be forcefully sold in situations involving:

  • Divorce
  • Purchase money
  • Taxes
  • Home improvement loans
  • Reverse mortgages
  • Home equity loans
  • Liens from before the homestead was established
  • Refinance loans
  • Mobile home liens

There is no dollar limitation on the exempt value of your home.

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What Qualifies As A Homestead?

Homestead Protection Texas

TX Homestead LawThere are some requirements that you must meet for a property you own to be defined as a “homestead”.  You are not required to actually live or reside in a property but you must show overtly that you intend to physically occupy the house. You are required to prove that the property is your homestead and once you have provided proof the designation is going to stick.

For the designation to stick your homestead claim must be based on real property such as:

  • A lot that you intend to build a home on
  • A leasehold estate or rental property
  • A life estate
  • A beneficial trust that holds real estate

The protections for homesteads extend to minerals that are located under the estate. For example, it is not unusual for individuals or spouses that own a homestead to sign oil and gas leases with oil companies.

What Does Not Qualify As An Estate?

Texas Homestead

However, neither boats nor mobile homes that are not attached to the realty can be considered as a homestead. Property Code Section 41.002 places limitations on the size of a homestead:

(a) If used for the purpose of an urban home or as both and urban home and a place to exercise a calling or business, the homestead of a family or a single adult person not otherwise entitled to a homestead shall consist of not more than 10 acres of land which may be in one or more continuous lots, together with any improvements thereon.

(b) If used for the purpose of a rural home the homestead shall consist of:

(1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or

(2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres, which may be in one or more parcels with the improvements thereon.

The definition of a homestead includes realty and fixtures but not movable personal property. Not only are movable non-affixed items not part of the homestead but they are also not exempt from execution. Only movable items that are exempt personal property are safe from creditors.

Difference Between Urban And Rural Homesteads

Texas Homestead Act

An urban homestead can either be a home or business or both. Urban homesteads cannot occupy an area of more than ten acres while a rural homestead is limited to 100 acres for a single person and 200 acres for a family. But you cannot have both an urban residential homestead and a rural business homestead.

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