Modern homestead laws provide a level of protection to individual property owners from losing their home to their creditors. Homestead laws are frequently revised, changing the guidelines and limits of their provisions. The Oregon Homestead Act underwent a major revision in 1999, known as Measure 5, to amend Oregon Code Sections 23.164 and 23.240 as it relates to the execution of judgments and created new provisions to Oregon homestead law.
Oregon law requires that the homestead be the actual residence of the owner (or the owner’s spouse, parent or child). The homestead qualification is not compromised by a temporary absence when there is the intention to reoccupy the property as a homestead or even by the sale of the property. The property must be no larger than one city block when in a town or city environment and no larger than 160 acres of rural property.
In Oregon, the homestead exemption is automatic. Homeowners do not need to file any form or document declaring their property a homestead; they need only to meet the homestead qualifications.
Protection From Creditors
In Oregon, a homestead is exempt from liens resulting from debt judgments up to 40 thousand dollars for a single owner or $50,000 for co-owners, except as otherwise provided by law. This means that the first $40,000 to $50,000 of equity of a homesteaded property is off-limits from most creditors.
The homestead property cannot be sold to satisfy the debt, but the debt can remain as a lien against the homestead property. If a court order is obtained authorizing the sale of the property, the sheriff will pay the homestead owner the homestead exemption limit (either $40,000 or $50,000, whichever is applicable) and the liens will be satisfied out of the balance of the proceeds.
Exceptions to the Rule
The homestead protection does not protect against certain debts, such as mortgages, construction liens and tax liens. Oregon courts can also choose to deny all or part of a homestead exemption in the case of delinquent child support judgments.
Although many states grant homesteads a reduced property tax treatment, Oregon does not. Oregon does, however, have a Homestead Deferral Program for seniors (age 62 and over) and disabled homeowners. Under the program, qualified homeowners can defer the payment of all property taxes. The state pays them and charges the homeowner 6 percent interest, which is also deferred until the homeowner dies, sells his home or ceases to occupy his home (except for medical reasons).
- OregonLaws.org: SS 18.395 Homestead Exemption
- OregonLaws.org; SS 18.402 Limitations on Homestead Exemption
- OregonLaws.org: SS18.398 Denial of Homestead Exemption When Judgment is for Child Support
- NOLO: The Oregon Homestead Exemption
- Oregon Department of Revenue: 2019 Oregon Property Tax Deferral for Disabled and Senior Citizens
Lisa Dorward was a corporate financial executive and business consultant for more than 15 years before becoming a writer in 2003. She has B.A. degrees in both history and creative writing and earned her M.F.A. in creative writing in 2008, specializing in novel-length historical fiction.