What Is Exempt Property in Texas? – Texas Homestead Exemption Law

What Is Exempt Property in Texas? – Texas Homestead Exemption Law

If you are facing judgment from a creditor, you should know that the State of Texas offers a variety of protections of property for average income families. This protection has legal roots dating back to the state’s first settlers, who themselves were often seeking to escape the burdens of judgments and start fresh.

What Is Exempt Property in Texas?

Some items of property are exempt from liens or seizure under the Texas Constitution, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, the Texas Homestead Law and other laws. Texas exempt property includes:

  • The primary residence of a debtor (the “homestead”)
  • Cemetery plots purchased and intended for use by the family
  • Up to $50,000 of personal property for an individual
  • Up to $100,000 in personal items for a Texas family
  • Home furnishings
  • Provisions for consumption; livestock, farm implements
  • Tools, equipment, books, and vehicles used for work in a trade or profession
  • Jewelry and family heirlooms
  • Athletic and sporting equipment
  • A motor vehicle for each member of the household with a driver’s license
  • Funds in college savings plans
  • Retirement plans and accounts
  • Clothes
  • Firearms
  • Pets and more

If the entirety of your property is included under these exemptions, you may be considered judgment-proof in Texas.

What Is Non-Exempt Property in Texas?

What is non-exempt property? Non-exempt property is anything that does not meet the criteria for an exemption under the Texas Constitution, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, the Texas Homestead Law and other applicable laws. For most families, this is a small percentage of what people own.

what is exempt property in Texas?

What Is a Homestead in Texas?

In Texas, every family and every single adult person is entitled to reside in a homestead exempt from seizure, except for pre-existing mortgages or liens. The main criteria for determining a homestead in Texas (and really the only limitations) are the physical size of the property and occupation/residency.

Under Texas Property Code 41.002, a homestead of a single adult or family for an “urban” home is up to 10 acres of land in one or more contiguous lots, without consideration of improvements. The property must either be resided on or it can be established as an urban business homestead if the head of the family has adapted the property to use as a business and actually does so.

If the property is a “rural” home, it may be up to 100 acres for a single person and 200 acres for a family, in one or more parcels, without consideration of improvements. In order to establish a rural homestead, you must reside on the property and put the property to work in support of yourself or your family. Residency on the property is critical, and occasional, weekend or holiday use, along with agricultural use of the property, will not satisfy this requirement unless there is residency.

The urban and rural distinction is determined by whether the property is within the limits of a municipality and also served by police, fire, and at least three utilities, which makes it an urban homestead. All other properties are rural homesteads.

The homestead can include a structure such as a house or trailer or not, and the home can range from recently-renovated to a fixer-upper and still qualify for the exception keeping it from creditors, provided the homestead requirements in Texas are met.

Note that shuffling your property and assets in proximity to a judgment can be considered fraudulent conveyance. Get professional help if you are facing or anticipating a Texas judgment against you.

The Homestead Act in Texas

Texas asset protection laws are some of the strongest in the country, and among a debtor’s right is the right to have their homestead remain free from seizure. Together, the Texas Constitution article XVI, Section 50, Texas Property Code 41.001, Texas Property Code 42.002, Texas Property Code 42.0021, and several other laws make up the Homestead Act.

The only limitations of the umbrella of protection afforded by the Texas Homestead Act are that the property in question be a certain acreage and meet the occupancy/residency requirements to remain free from creditors.

Attorney Seth Kretzer Can Help You Navigate Exempt Property Laws

If you wish to know more about property exemptions and homestead protections in the State of Texas, you will need a lawyer with specific experience with these topics, and who has the right knowledge and resources to help protect your rights.

Contact the Law Offices of Seth Kretzer today!

 

Phone: 713-775-3050
Fax: 713-929-2019
Houston, TX 77002
440 Louisiana, Suite 1440