Homestead Protection

• Texas law recognizes two types of homestead properties: urban and rural. A urban homestead is real property serving as a home, or as a home and place of business up to 10 acres in size, that is located in the jurisdiction of a municipality. It can be the residence of either a single adult or a family. A property not within a municipality can be a homestead up to 200 acres for a family and 100 acres for a single adult. The homestead exemption dollar amount is unlimited except for some bankruptcy proceedings.
  
  

Debts Not Covered

• Texas homestead law specifies that certain debts are not covered by the exemption. Mortgage debts that were for purchase money, refinanced purchase money mortgages and reverse mortgages are so specified. Most other mortgages will also not be covered. Debts owed to the government are usually not covered. Debts resulting from a divorce action are excepted from coverage. A debt owed from a contractor's lien is also not covered only if certain requirements are met. These include specific prior written disclosures were given to the property owner-debtor by the contractor-creditor.
  
  

Special Bankruptcy Rules

• The homestead exemption is unlimited for all covered debts, except sometimes in a bankruptcy proceeding. A bankruptcy action is part of federal law, and there are special federal bankruptcy rules regarding homestead exemptions. The most important special rule is that the property owner must have owned the homestead in question for at least 40 months before the bankruptcy action to be allowed the unlimited dollar amount exemption. Time that previous Texas homes were owned can count toward this rule if the sales proceeds of the previous home was reinvested in the current homestead property. If the 40-month rule cannot be met, the homestead exemption is limited to $146,450.
  
  

Other Provisions

• The statute does not specify a time requirement to be eligible for a homestead. While the law states that the property should be the owner's home, the owner is allowed to temporarily rent out the property without voiding the homestead status. The abandonment of the property by only one spouse does not negate the homestead for the other spouse. The law specifies that all the sales proceeds of a homestead property are also exempt from covered debts for six months after the sale and can be fully protected again by reinvestment in a new homestead property.