What is the homestead exemption in Pennsylvania and how do I claim it?
Pennsylvania is unusual: its state creditor homestead is essentially nominal, forcing most debtors to federal exemptions.
1. Two Concepts
Pennsylvania has (a) a property-tax homestead exclusion funded by Pennsylvania gaming revenue and (b) a creditor homestead of only $300 under 42 Pa.C.S. § 8123.
2. Creditor / Bankruptcy Homestead
42 Pa.C.S. § 8123 caps the general state exemption at $300, applying to any property including a home. Tenancy by the entirety, however, is a powerful supplemental protection: marital homes owned jointly are immune from individual-spouse judgments under Pennsylvania common law.
3. Automatic vs Declaration
No declaration is needed for the $300 exemption or for tenancy by the entirety.
4. Federal Bankruptcy Cap
Pennsylvania permits debtors to elect federal exemptions under 11 U.S.C. § 522(d), which include a $27,900 homestead (April 2022) — significantly more than § 8123. BAPCPA § 522(p)'s $189,050 cap is irrelevant for most PA debtors because state law is already below it.
5. Property-Tax Homestead
The Taxpayer Relief Act (Act 1 of 2006) authorizes school districts to reduce assessed value via the homestead/farmstead exclusion, funded by slot-machine revenue. Reductions vary by district but typically reach $200-$650 in tax savings.
6. Filing Property-Tax Exemption
File the Homestead/Farmstead Exclusion Application with the county assessment office by March 1.
7. Spousal Protections
Tenancy by the entirety automatically shields the marital home from individual-creditor levies; both spouses must consent to conveyance or mortgage.
8. Loss Triggers
Divorce converts tenancy by the entirety to tenancy in common, exposing the property; abandonment of the property-tax homestead requires withdrawal of the exclusion.
9. Foreclosure & Forced Sale Exceptions
Mortgages, taxes, mechanic's liens, judgment liens against both spouses, and federal liens override entireties protection. Joint tax debts are particularly dangerous for married homeowners.
This is legal information, not legal advice.
- You are deciding between state and federal exemptions in a PA bankruptcy
- A joint judgment against both spouses threatens your marital home
- You are dividing entireties property in divorce while creditors are circling
- 42 Pa.C.S. § 8123
- Pa. Taxpayer Relief Act (Act 1 of 2006)
- 11 U.S.C. § 522(d)
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.