On Sept. 9, 2020, California Assembly Bill 1885 was enacted, significantly increasing the amount of California’s homestead exemption. The amendment becomes effective Jan. 1, 2021.
The law currently in effect provides three tiers of exemptions ranging from $75,000 to $175,000, depending on the status of the judgment debtor and homestead residents. The amendment simplifies and increases the homestead exemption to the greater of:
- 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 $600,000.
These amounts will be adjusted annually for inflation.
The California Association of Realtors publishes monthly historical data for most counties reflecting the median sales price for a single family home. For August 2020, of the 51 counties reported, only 15.7% had a median sales price under $300,000, 49% were between $300,000 and $600,000, and the remaining 35.3% were above $600,000.