Washington Homestead Laws

Washington has safeguards in place to protect your primary residence during bankruptcy or collection actions. The Washington state homestead exemption (RCW § 6.13.010) applies to “real or personal property” used as a primary residence. Real property includes the land that the building or personal property sits on, and may include:

• Single-family homes
• Mobile homes, whether attached to the land or not
• Condos or townhomes
• Trailers or boats

To qualify for the homestead exemption, you must have an ownership interest in the property and use it as your principal residence. The exemption extends to any “appurtenances” such as sheds or garages attached to the primary residence.

The homestead exemption automatically applies to the primary residence for bankruptcy protection. Washington has a separate property tax exemption, which differs from the homestead exemption. The tax exemption requires an application and annual updates.

Homestead Exemption Amount

Washington amended its homestead exemption amount in 2021. The exemption is currently the greater of $125,000 or the median sale price of a single-family home in that county in the previous calendar year. There is an unlimited exemption if the property is being seized to repay another state’s income tax arrears for benefits the owner received while a resident of the state of Washington.

Sale of Homestead

The homestead exemption protects the home equity in the property to the statutory value. Equity is the value of the property less the amount you still owe. If the property value is $350,000 and you owe $200,000 on the mortgage, you have $150,000 in equity. If the median sale price of homes in your county was $500,000 last year, your home is fully protected.

Washington law protects the proceeds from recent, voluntary sales of a primary residence. If you use the proceeds to purchase a new homestead property, the bankruptcy exemption applies for one year after the sale. The new property is also covered, even though you haven’t lived in it for the statutory period.

Exceptions to the Homestead Exemption

The homestead exemption only applies to unsecured creditors. It will not prevent forced sales arising from foreclosures without bankruptcy filing. Other liens the exemption does not apply to include:

• Mechanic’s liens and contractor’s liens
• Child support and alimony arrearages
• Tax liens
• HOA or condominium liens

Most child support and alimony changes require an order from a family court.

Get Legal Advice From a Washington Bankruptcy Lawyer

If you’re considering filing for a Chapter 7 or Chapter 13 bankruptcy and need a homestead exemption, consider meeting with a Washington bankruptcy attorney. The laws surrounding state and federal exemptions are complex, and it’s a good idea to get sound legal advice to ensure your bankruptcy is filed correctly.