New California Homestead Exemption 2025

Homestead exemptions protect home equity from creditors, preventing seizure within the protected amount. This applies if you file for bankruptcy or experience other financial difficulties. You can also get a California homestead exemption on property taxes, so you’re taxed on the value of your home minus the exemption amount.

By law, a certain amount of your assets is protected. A homestead exemption for California homeowners protects against judgments in which a debtor’s home and its equity could be seized. Otherwise, creditors can file a lawsuit, obtain a judgment, and take actions such as garnishing wages and bank accounts or forcing the sale of property to collect.

The California homestead exemption kicks in when a creditor attempts to sell your home to settle a judgment. Filing for bankruptcy (personal or business) protects all or a portion of your home equity from creditors. If the legally available exemption is higher than that of your home equity, your home is fully protected from creditors. A lender then cannot force the sale of your property.

While the 1851 California Homestead Act protected homeowners’ equity from creditors, it wasn’t until the 1980s that fixed dollar values were implemented. As housing prices increased significantly over time, lawmakers eventually drafted AB 1885 to tie the exemption to more realistic figures and build in regular adjustments. Understanding this exemption for California homeowners is crucial when evaluating your financial situation.

As recently as 2020, the California homestead exemption was just $75,000 for a single homeowner, with a maximum of $175,000 for homeowners who met specific family, income, and age requirements. The new law eliminates many of those qualifying conditions and provides a substantially larger exemption to anyone with a principal residence.

As of January 1, 2025, the exemption for California homeowners will be at least $361,113 if the median sale price for homes in your county was less than that during the prior year. However, it can be as high as $722,151 if the median sale price in your county was more than that amount.

The California homestead exemption amount can fall between $361,113 and $722,151 but will never exceed the upper limit of the exemption. Examples include the median price in Los Angeles County, which is at $886,400, which qualifies for an exemption of $722,151. The Orange County homestead exemption would also be capped at $722,151, as the median price was $1,430,000.

In Riverside County, the median price was $645,000, so the homestead exemption would be $645,000. With Glenn County’s below-median price of $327,500, the homestead exemption is moved up to the lower limit of the range, so it is $361,113.

2025 California Homestead Exemption by County:

• Los Angeles County: $722,151
• Orange County: $722,151
• Riverside County: $645,000
• San Bernadino County: $505,000
• San Diego County: $722,151
• Ventura County: $722,151
• Kern County: $390,000
• Santa Barbara County: $722,151
• San Francisco County: $722,151
• San Luis Obispo County: $722,151
• Fresno County: $426,690
• Imperial County: $386,750
• Sacramento County: $540,000
• Santa Clara County: $722,151
• Alameda County: $722,151
• Contra Costa County: $722,151
• San Joaquin County: $510,000

Note that as of March 2025, accepted sources for this information haven’t yet been determined, but a reliable source of statistics is the California Association of Realtors.

IIn California, you don’t necessarily have to file a homestead declaration. An automatic homestead protects your home against a forced sale if the proceeds wouldn’t be enough to pay the homestead before the creditor. If there’s a judgment lien on your property, the creditor gets paid from a home sale before you get the homestead.

Homestead amounts are the same for automatic and declared homesteads. The difference is that a declared homestead only protects exempt equity when a home is sold voluntarily. Proceeds are protected for six months, during which you can reinvest the homestead in a new home (if that amount covers the sale price and other costs).

Filing a declaration is a good idea if you have equity in your home and experience financial trouble. Your homestead won’t be lost after a property sale and the proceeds will be protected for a full six months.

The California homestead exemption also has two different systems. System 1 applies to any property where you reside and to proceeds from forced sales of property received six months before filing for bankruptcy. System 2 applies to property a debtor uses as a residence (the resident can be independent of the debtor as well) and allows for unused portions of the exemption plus a wildcard amount to be used.

The California Homestead Act and this homestead exemption are state laws, not federal. They do not set limits on what the IRS or other federal agencies can collect. The IRS has its own set of exemptions for delinquent taxpayers, but they don’t do much to protect homes.

Still, although the California homeowners exemption doesn’t impact federal liens, it is rare for the IRS to force the sale of a home. More likely, a lien on real property will be a barrier to selling or refinancing it. You don’t have a choice in which law applies to your situation; according to the U.S. Constitution’s Supremacy Clause, federal law takes precedence over state law.

The law and its adjustments to the California homeowners exemption impact how much of your home equity is protected. Even though the limits may continue to increase, it can be a mistake to wait to file for bankruptcy. With large volumes of filings, your homestead protections could be delayed if you don’t act quickly.

At OakTree Law, our Los Angeles bankruptcy attorneys are up-to-date on all California homestead exemption laws. We can determine how they apply to your financial situation and the exact amount your home qualifies for. Immediate assistance might avoid foreclosure, wage garnishment, and other collections actions, not to mention the stress that being in debt can cause. To understand all available exemptions and speak to a lawyer with your best interests in mind, request a free evaluation or call us at 562-219-2979