A homestead exemption is a legal provision that prevents creditors from being paid off from a debtor’s homestead, and also includes a homestead‘s exemption from property taxes and from the death of the homeowner’s spouse.
State laws regarding the homestead exemption vary widely. Most states have limits on the amount of exemption a debtor is entitled to, such as $20,000, but a few states have no limits at all, exempting the entire homestead of the homeowner for debt service. Other states have limits that depend on the size and type of property or the age of the property owner.
Additionally, many of these protections (not homestead, but additionals that exist in various states) only kick in once a homeowner has lived in the house for more than [X] number of years.
It would be financial suicide for many older folks to move to a smaller dwelling. You can leverage your home for home equity loans as well, so moving in the current state of the housing market would be downright WILD to think of; you would be purchasing a smaller estate at an inflated price, re-pinning your tax rate to the inflated price you bought it at.
There is not such a thing as a federal property tax. But similar rules exist across much of the USA.
From Cornell Law School:
Additionally, many of these protections (not homestead, but additionals that exist in various states) only kick in once a homeowner has lived in the house for more than [X] number of years.
It would be financial suicide for many older folks to move to a smaller dwelling. You can leverage your home for home equity loans as well, so moving in the current state of the housing market would be downright WILD to think of; you would be purchasing a smaller estate at an inflated price, re-pinning your tax rate to the inflated price you bought it at.