Making Lemonade

I have a client who recently moved from his own home into assisted living. He’s not likely to return home to live, yet he does not want to sell. This is not an uncommon situation in my practice. One of the concerns for my clients who find themselves in a similar predicament has been the preservation of their principal residence exemption (the “homestead exemption”), as its loss can result in a hefty increase in property taxes.

Merely moving out of one’s home has generally not been the issue. State law has always permitted the continued claim of a homestead exemption while the homeowner is in assisted living or a nursing facility. The problem has been that the home needed to remain unoccupied while the homeowner was away for the homestead exemption to apply.

That problem is now resolved! As of May 2, 2018, a homeowner who is in a nursing home, assisted living, or other location for purposes of convalescence can continue to claim a homestead exemption if he or she maintains the home, and it is not leased or used for any business or commercial purpose.

The happy result of this change is that a homeowner can now arrange for his or her otherwise empty house to have the security of an occupant as long as that occupant pays no rent and the homeowner continues to pay for all utilities, maintenance, repairs, taxes and insurance.

If you have questions about the homestead exemption or any other real estate matter, please give us a call at (248) 477-6300.