New York Homestead Laws In 2026: Complete Protection Guide

Most people don’t realize how much protection New York law gives their homes. Seriously. If you own a primary residence in New York, you might already be protected from creditors—and you may not even know it.

Here’s the thing: homestead exemption laws are designed to keep your family safe. Even when things get tough financially, these laws make sure you don’t lose your home to pay off debts. Let’s break down exactly what you need to know.

What Is a Homestead Exemption?

A homestead exemption is protection for your primary residence. Pretty straightforward, right? It shields a portion of your home’s equity from creditors who have a money judgment against you. Think of it like a safety net—the law says creditors can only take certain amounts, not everything.

Your homestead has to be your main residence. You physically live there. A vacation home, rental property, or weekend cabin? Those don’t count. The exemption applies to different types of homes too: single-family houses, condos, co-ops, mobile homes, and farms. If you occupy it as your primary home, you’re likely eligible.

The key word here is “equity.” That’s the value of your home minus any mortgages or liens against it. The exemption protects that equity amount.

How Much Protection Do You Get?

Okay, here’s where it gets important. The amount you’re protected varies by county. New York divides the state into three main regions with different protection levels.

If you live in the New York City area—that includes Manhattan, Brooklyn, Queens, the Bronx, Staten Island, plus Nassau, Suffolk, Rockland, Westchester, or Putnam counties—you get the strongest protection. Your home equity up to $150,000 is protected. That number could increase to $250,000 if proposed legislation passes in 2025.

Live in Dutchess, Albany, Columbia, Orange, Saratoga, or Ulster counties? You’re protected up to $125,000 in equity. All other upstate counties get protection up to $75,000.

Married? Great news. Couples can double these amounts if both spouses own the property. So if you’re a married couple in Queens, you could protect $300,000 together.

Wondering if this applies to you? Check your county. Find your location on the list above, and you’ll know your protection level.

When the Exemption Stops Working

Hold on, this part matters. The homestead exemption has limits. If your home equity exceeds the exemption amount, creditors can push for a sale. But here’s the key: you still keep the exempt amount from the proceeds.

Let me explain with an example. Imagine you own a home worth $500,000 in Queens. You have a $400,000 mortgage. Your equity is $100,000. Since the Queens exemption is $150,000, all of your equity is protected. Creditors can’t touch it.

Now imagine you own the same home, but you’ve paid off the mortgage. Your equity is $500,000. Your $150,000 is protected, but creditors can go after the remaining $350,000. The court can order the home sold, but you keep your $150,000.

Important: The exemption doesn’t protect your home in foreclosures. If you fail to pay your mortgage, the bank can take the home. The exemption also doesn’t apply if your home was pledged as collateral for a debt.

Special Situations: What the Exemption Doesn’t Cover

This part can be tricky. The homestead exemption protects against money judgments. That’s lawsuits where someone gets a judgment against you for money damages. But other things aren’t covered.

Your mortgage lender can still foreclose if you don’t pay. Tax authorities can still force a sale for unpaid property taxes. If you pledged your home as collateral for a loan (like a second mortgage), that lender can take it. Basically, exemptions protect against creditor judgments, not against debts where your home was used as security.

Not sure what counts as a judgment? Talk to a lawyer. But in general, if a court ruled someone should pay you money and you didn’t pay, that’s a judgment.

What Happens After You Die

Stay with me here. The homestead exemption doesn’t end when the owner dies. The protection continues for the surviving spouse and surviving children.

The surviving spouse has the right to live on the homestead for the rest of their life. The surviving children are protected until they reach age 18. After that, only the surviving spouse continues to have rights.

The exemption stays in place for one year after the owner’s death without any issues. After that year, if the surviving family members stop living there, the exemption ends.

If You Move or Stop Living There

The exemption requires you to actually live in the home. If you move away and stop occupying the property as your principal residence, the exemption ceases.

There’s one exception: if you temporarily leave because your home was damaged or destroyed, the exemption continues for up to one year. So if a fire damages your home and you move into temporary housing while repairs happen, you’re still protected.

The Homestead Exemption in Bankruptcy

Listen, bankruptcy works differently than regular creditor lawsuits. If you file for bankruptcy in New York, you can choose between the New York homestead exemption or the federal bankruptcy exemption. You can’t use both.

New York’s exemption is way stronger. You get protection up to $150,000 (potentially $250,000 depending on county and recent changes). Federal bankruptcy protection is much lower—around $31,575 per person, or about $63,150 for married couples.

For most people in New York, the state exemption wins. But there are rare situations where federal protections work better. This is where a bankruptcy attorney becomes your best friend.

Recent Changes and Pending Updates

Heads up: New York is considering increasing homestead protection. Currently, there’s a bill being discussed that would bump up the exemption amounts. For NYC counties, it could go from $150,000 to $250,000. Upstate numbers would increase too.

These changes haven’t been finalized yet, so the current amounts still apply. But stay tuned. If you’re planning to claim the exemption soon, check the current law first.

How to Claim Your Homestead Exemption

Here’s the practical part. In most cases, you don’t need to file anything special. The exemption is automatic. You own and occupy your home as your primary residence? You’ve got the exemption.

But if you’re filing for bankruptcy, you must list your home and claim the exemption on your bankruptcy forms. That’s where it becomes official.

In regular lawsuits where a creditor gets a judgment against you, the exemption is claimed when you respond to the judgment. Your attorney (or you, if you’re representing yourself) will raise the homestead exemption as a defense.

Not sure how to claim it? A lawyer can help. Many offer free consultations. This is worth getting right.

What about Property Taxes?

Good question. The homestead exemption from creditor claims is different from property tax exemptions. They’re separate things. Your homestead exemption protects you from creditors, but it doesn’t reduce your property taxes.

That said, New York does offer other programs to reduce property taxes for homeowners. The STAR program helps many New Yorkers. Check with your local assessor’s office to see if you qualify for additional help.

Who Qualifies for the Exemption?

You must meet these requirements: The property is your primary residence. You own it and have an equity interest. You live there. That’s it. No residency requirement. No income limits. No filing deadline or application needed (except in bankruptcy).

Even renters can’t claim it—only owners. Spouses must both be on the deed to double the exemption amount. If one spouse owns the home alone, only one exemption applies.

Common Questions About the Exemption

Does the exemption protect against all debts? No. It protects against money judgments from lawsuits. It doesn’t protect against mortgages, tax debts, or debts where your home was pledged as collateral.

Can I lose the exemption? Only if you stop living in the home as your principal residence. Moving away means losing protection. A temporary move lasting less than one year (due to home damage) keeps the exemption.

Do I have to do anything to maintain the exemption? Keep living in the home as your primary residence. That’s all. No paperwork needed.

What if my home is worth more than the exemption amount? Creditors can force a sale, but you keep the exempt amount. The sale proceeds are split: you get your exempt amount, creditors get the rest.

Can both spouses claim separate exemptions? Only if you each own different homes as primary residences. If you own one home together, you share one exemption (which is doubled to $300,000 in NYC counties). You can’t protect multiple homes under homestead exemptions.

What to Do If You’re Facing Creditor Claims

If you’re being sued or have a judgment against you, tell your attorney about the homestead exemption. This is crucial. Don’t wait. The earlier your attorney knows, the better they can protect you.

If you don’t have an attorney yet, hire one immediately. Most will let you discuss your situation at a free consultation. They can explain how much protection you have under the homestead exemption law.

Don’t ignore lawsuits or judgments. The longer you wait, the more rights creditors have. Act fast.

The Bottom Line

New York’s homestead exemption is powerful protection for homeowners. It keeps a significant portion of your home equity safe from creditors. The amount depends on where you live, but it’s substantial in most counties.

Remember: you don’t need to do anything special to have the exemption. Own your home and live in it, and the law protects you automatically.

But if you’re facing financial trouble or lawsuits, don’t assume the exemption covers everything. Get legal advice. A lawyer can explain exactly how much protection you have and what steps to take next.

Stay informed about your rights. Know where your home sits on the exemption scale. And when in doubt, ask a lawyer. They’re there to help.