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Real Estate in MA: Homestead

In Massachusetts, the amount of your real estate homestead exemption depends on whether it is “automatic” or “declared:”

Automatic. All homeowners in Massachusetts are entitled to an “automatic homestead exemption” of $125,000.  Homeowners in Massachusetts do not have to record a declaration to take advantage of the automatic homestead exemption.

Declared. For owners who sign and record a declaration, the homestead exemption is increased to $500,000. All owners of a homestead must sign a recorded declaration to take advantage of the full $500,000 exemption permitted by Massachusetts law. Otherwise, the “declared homestead exemption” amount is reduced from $500,000 based on the signing owners’ percentage interest in the property.

Massachusetts Homestead Exemption for Elderly or Disabled People

Special rules apply for disabled and elderly homeowners in Massachusetts. Individuals are considered to be disabled persons if they have mental or physical impairments that qualify them for Supplemental Security Income. Elderly persons are individuals who are at least 62 years old.

Disabled and elderly homeowners who file declarations in accordance with Massachusetts law are entitled to homestead exemptions of $500,000 each. Exemptions for disabled and elderly homeowners can be aggregated.

Massachusetts law is somewhat complicated when it comes to calculating the total exemption amount when one or more owners are elderly or disabled. Two spouses over the age of 62, for example, are entitled to a declared homestead exemption of $1,000,000. By contrast, if only one spouse is over 62 years old, and neither is disabled, the declared homestead exemption for a couple who own a residence together is $750,000.

Doubling for Married Couples

In Massachusetts, married couples filing joint bankruptcies cannot double the homestead amount, even if the spouses are living in separate residences. There may be other advantages to filing bankruptcy jointly with your spouse.

The Scope of Homestead Exemptions in Massachusetts

In Massachusetts, the homestead exemption covers a home that you occupy or intend to occupy as your primary personal residence. A home can be a house, a two to four unit multi-family dwelling, or a condominium, together with the land on which it is located.

The homestead exemption also applies to mobile homes, manufactured houses, and cooperative units. Owners in Massachusetts are entitled to homestead protection whether they hold their interests as joint tenants, tenants in common, tenants by the entirety, or trust beneficiaries.

Generally, sale proceeds are exempt until you acquire a new home or a year after receipt, whichever occurs first. Insurance proceeds are exempt until the earlier of: the date that repairs or reconstruction are completed or two years after receipt.

The homestead exemption in Massachusetts does not protect against efforts to collect, among other things:

  • federal, state, or local taxes
  • valid mortgages or pre-existing liens, or
  • child or spousal support.