Arizona law allows certain individuals to hold homestead exemptions, which protect certain property from being seized and sold to satisfy the debts of the property owner. Arizona Revised Statutes Section 33-1101 sets forth the basic rules about who may hold an Arizona homestead exemption and the type and amount of property that can be protected by a homestead exemption.
If you are trying to collect a debt or are facing collection, you should become familiar with Arizona’s homestead laws. Other related statutes address how a homestead exemption may be claimed, certain exceptions, and abandonment of homestead property.
Because these issues can be complex and the result of miscalculating the applicability of a homestead exemption can be devastating, you should consult with an Arizona lawyer if you have any questions about Arizona’s homestead exemption laws.
How Much Equity Arizona’s Homestead Exemption Protects
Under A.R.S. § 33-1101, a qualifying Arizona homestead is protected from certain creditors seeking to take a home or force its sale to collect debt; this exemption applies for up to $400,000 in value. Given Arizona’s average home value of $421,381, these protections can be considerably beneficial.
This amount is adjusted every January based on cost-of-living adjustments. The exemption applies to equity, not the home’s total value. Homeowners can generally calculate their equity by subtracting what they still owe on the property from its value. Arizona law allows only one homestead exemption per person or spouse; spouses cannot stack their homestead exemptions onto the same property.
What Property the Exemption Covers
Arizona’s homestead exemption applies to several types of primary residences. Under A.R.S. § 33-1101, qualifying property can include a:
- House and the land it is on
- Condo or cooperative
- Park model trailer
- Mobile home
- Motor home or travel trailer
- Fifth-wheel trailer
- Manufactured home
- Houseboat
To qualify for the exemption, a person must be at least 18 years old, married or single, and reside in Arizona. The exemption applies to the home the person actually lives in as a primary residence. It does not extend to every property someone owns in the state. Rental homes or investment properties generally would not qualify. Other property-related legal issues may involve Easement Law, Buyer/Seller Contract Disputes, or a Neighbor Dispute.
What Happens to the Exemption When the House Is Sold?
Selling your home does not necessarily mean immediately losing the financial protection provided by Arizona’s homestead exemption. Once the property is sold, the protection can shift from your equity in the home to the identifiable cash proceeds you receive from the sale. Those proceeds remain protected for up to 18 months after the sale or until you establish a new homestead.
After this 18-month window has passed, proceeds that are not put toward a new homestead or which are commingled are no longer protected.
When the Homestead Exemption Is Not the Answer
The state’s homestead exemption can protect home equity from certain creditors seeking to force the sale of a property, but it does not protect you against every type of claim involving your home. An owner facing an HOA assessment lien or foreclosure should determine how the specific circumstances affect their property rights, including issues related to HOA Law and HOA Foreclosure Rights.
Harper Hall PLC provides additional information about how the Arizona homestead exemption can affect HOA foreclosure. Homeowners facing the potential loss of their property can also consult an Arizona HOA foreclosure rights lawyer about their legal options.
Why You Should Hire a Real Estate Lawyer
Homeownership comes with clear benefits in Arizona, especially considering that 45.4% of Arizona mortgaged homes were “equity rich,” meaning the remaining mortgage balance was no more than half the property’s estimated value. Owning a home can also lead to challenges when it comes to understanding homestead exemptions.
When you hire a real estate lawyer, you benefit from their understanding of real estate laws and homestead exemption laws. An Arizona real estate attorney can answer your questions and provide you with the focused support that your case deserves.
Have Questions About Homestead Exemptions? Contact Our Office Today
Since 2004, Harper Hall PLC has stood by homeowners and helped them navigate difficult situations. Our founding attorney has been practicing in Arizona for almost three decades, and our experienced legal team can help you avoid hidden pitfalls that could prove costly. Contact our office today and gain the support of a skilled, results-driven legal team.
