Learn how to file for homestead exemption in North Carolina to avoid losing your home, especially in the event of financial loss or bankruptcy. This article is written as a guide for North Carolina residents both current and intending on how to manage bankruptcy using the homestead exemption law.
Homestead laws allow homeowners in North Carolina to declare a limited portion of their property as a “homestead,” thereby preventing a resulting loss due to financial hardship. These laws originally were intended to protect families from losing their farms.
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In North Carolina, the state government has excluded from property taxes a portion of the appraised value of a permanent residence owned and occupied by North Carolina residents aged 65 or older or totally and permanently disabled whose current annual income does not exceed $33,800. The property to be exempted has no acreage limit, but only allows up to $1,000 worth of property to be declared a homestead.
Under the exemption system, homeowners can exempt up to $35,000 of their home or other real or personal property covered by the homestead exemption. However, in the case of a deceased spouse, the homeowner can be exempt up to $60,000 under the homestead exemption if the property was previously owned by the debtor as a tenant by the entirety or as a joint tenant with rights of survivorship.
In North Carolina, the homestead exemption is not only applicable to homes but also applies to real and personal property, including condominiums, co-ops, or burial plots. For the exemption to be effected, the property must be owned by a North Carolina resident. The resident or dependents must live in the property when filing for bankruptcy to claim the homestead exemption.
How to File For Homestead Exemption in North Carolina
For residents of North Carolina, the homestead exemption is automatic which means that you don’t have to file a homestead declaration to claim the homestead exemption in bankruptcy.
Furthermore, the state permits doubling of the homestead exemption for married couples filing a joint bankruptcy. A married couple filing jointly in North Carolina can protect up to $70,000 worth of equity in a home.
To qualify for homestead exemption in North Carolina, you must live in North Carolina for at least 730 days before filing. Otherwise, you’d use the previous state’s exemptions.
If you are qualified and meet the criteria, you must apply with the Assessor’s Office between January 1st and June 1st. This may allow you to receive an exclusion of the taxable value of your residence of either $25,000 or 50%
Eligibility For Homestead Exemptions in North Carolina
- Must be 65 years or older
- Annual income should not be over $33,000.