Your Guide to Homestead Your Home in Nevada
Are you finally looking into homesteading your home? But the definition of homestead and how you can go about this is a little bit confusing?
If so, you are not the only one. First and foremost, the homestead laws here in Nevada will allow you, the homeowner to state there is a limited portion of your property as a “homestead”. By doing this it will spare that portion from creditors in case you ever decide to file for bankruptcy, or you find yourself in other financial hardships.
Homesteading your home was first intended to protect those families from completely losing their farms. But as the time progressed homestead laws can now be placed on residential cooperatives, homes, and even condos.
You should keep in mind that the state of Nevada’s homestead laws has an automatic exemption that can protect your equity in your home only up to $550,000.
What is Protected Under the Nevada Homestead Law?
Okay, first things first, when you go to record your Declaration of Homestead, this is when the Nevada Law will start protecting your equity in your home. Your equity in your home that will be protected will be up to $550,000. This will be protected from creditors such as the following:
- Charge Card Debts
- Unpaid Medical Bills
- Business/Personal Loans
However, it will not exclude a force sale or seizure of your property, if your equity is more than $550,000.
You should know that a creditor can file a lawsuit and judgements against you for any property you own. But you Declaration of Homestead will ONLY protect your principal residence up to the $550,000.
But the homestead laws here in Nevada will NEVER protect you against any debts you have from your deed of trust, mortgage, or taxes, alimony payments, child support, or mechanic’s lien.
Purpose of Homestead Your Home Law & Nevada Homestead Exemption
When you go through bankruptcy you will typically have to sell ALL your assets to pay back your debts. So, the main purpose of having this homestead law is to help prevent you from being homeless in the off chance you must file for bankruptcy.
When is the Best Time to File for a Homestead Declaration?
No one can ever predict when a sudden incapacity or a sudden death will happen. So, as a rule it is vital that you file a Declaration of the Homestead form soon after finalizing the purchase of your home.
As previously mentioned, this will protect your home up to $550,000 in your home equity.
How File for Homestead in Nevada
Now that we have discussed what homesteading your home is and how it can help, you have probably decided this is the best course of action for you.
Now, you are thinking what’s next? How do I get started? Here’s step by step guide on how you can file for homestead in the state of Nevada.
First things first, you need to print out the Declaration of Homestead form. You can find this form that you need on the Nevada Real Estate Division.
You will need to obtain the copy of your homesteads recorded deed. This deed will have information that you will need in order to fully complete the Declaration of the Homestead form.
If in the event you do not have the recorded deed, you will need to contact the county office to get a copy immediately. You will not be permitted to go farther until you have this vital information.
Now, that you have all the required information handy, you can fully complete the Declaration of the Homestead form. You will be required to include the parcel number and even the legal description of your homestead. This information will be located on that copy of the recorded deed.
You will also be required to include your marital status, your name, and your address.
When you get to the “Name on Title Property” part of the Declaration of the Homestead form, you will need to put your name and the name of anyone else that owns the property exactly like they are on the copy of your recorded deed.
You must finally claim that you are the current resident of the homestead as well.
Once the entire form is filled out with the required information. It will be time to bring the Declaration of the Homestead to a notary.
You will be required to sign the Declaration of the Homestead in front of the notary. The notary will then sign it, stamp it and date it.
After you leave the notaries office, you can file the Declaration of the homestead in your local county office.
However, prior to going you should contact the office to find out what their processing fees are as well as if you should mail it or hand it in at the office directly. Each county does things a little bit different.
Wait, I think I have over $550,000 in Equity of my Home. Now What?
If you’ve filed and you suspect that your equity in your home is over $550,000 and you just received a judgement against you, have no fear. It’s not time to worry about it just yet.
The judge in the case will send out three appraisers. These appraisers will come out to value your property and how much equity you have in it. The appraiser will then decide if the property could be divided in a way to protect you and your home while you pay off the judgement creditors.
If there is not anyway, they can divide the homestead to protect it, and ultimately the property will need to be sold. You will then get $550,000 from the sale, which no one could touch to pay off your judgement.
HOMESTEAD EXEMPTION IN NEVADA FEBRUARY 2016
PREPARED BY PAUL T. MOURITSEN
UPDATED BY JERED M. MCDONALD
LEGISLATIVE COUNSEL BUREAU
The Nevada Constitution, which was adopted in 1864, provides for the exemption of homesteads
from forced sale (Article 4, Section 30). The current version of the State law is found in
Chapter 115 (“Homesteads”) of Nevada Revised Statutes (NRS).
To be eligible for the homestead exemption, State law requires a person to declare a homestead and
to record that declaration with the county recorder of the county in which the property is located.
Under the provisions of NRS 247.305 and NRS 247.306, the fee for recording this single-page
declaration is $14. However, Assembly Bill 192 (Chapter 128, Statutes of Nevada) of the
2011 Legislative Session (subsection 4 of NRS 247.305) authorizes county commissions to
impose an additional $3 fee to provide legal services for abused and neglected children. At this
time, only Clark, Pershing, and Washoe Counties have imposed the new fee. If a second page is
required for the legal description of the property, a $1 fee will be charged for the additional page.
FILING THE FORM
Forms may be obtained free of charge from the Recorder’s Association of Nevada website at
http://www.nevadarecorders.org, which provides a locator map for the State’s county recorders.
The declaration of homestead form also may be obtained at the principal or any branch office of the
Real Estate Division of the Department of Business and Industry or on the Division’s website
(http://red.nv.gov/uploadedFiles/rednvgov/Content/Forms/654.pdf). The form asks for the names of
the people residing on the premises and a legal description of the property, which may be found in
the papers received upon purchasing the dwelling. The required signatures must be witnessed
HOMESTEAD PROTECTIONS—STATE AND FEDERAL LAWS
The protection afforded by the homestead exemption does not apply to a mortgage used to purchase
or improve the property, prior liens, or legal taxes imposed on the property. If a person accumulates
other debts or defaults on a loan, or if a judgment is entered against the person in a suit, the
exemption protects the homeowner. The exemption covers up to $550,000 equity in the property.
Furthermore, the federal bankruptcy law (11 United States Code 522) acknowledges that a state law
providing for a homestead exemption, such as Nevada’s, will be honored in most proceedings.
However, one should be aware of changes to the law made by the 109th Congress in S. 256
(the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005). Under certain
circumstances, the federal $125,000 exemption limit may override state law.