Black and Buono Blog

At Black and Buono, we draft Homesteads at no charge, as a professional courtesy, to our clients. You only pay the recording cost, charged by the Registry of Deeds of $35.00. This represents an average savings of $100.00.

As of March 16, 2011 the revised Homestead Law takes effect (2010 Mass. Acts Chapter 395). The revisions generally expand the scope of Homesteads and also do away with some of the prior law’s more anachronistic provisions.

The statute now provides for an automatic homestead without any action required of the owner. The automatic homestead, under section four, provides for $125,000.00 protection for the owner and his or her family. It should be noted, however, that while this is an improvement upon the old statute where no coverage was provided on an automatic basis, the protection provided is still significantly less than the $500,000 protection provided under the declared homestead.

The new statute provides $500,000.00 protection on the recording of a written Declaration of Homestead. Section 5 provides several amendments for the form of declaration to be recorded, the most notable among these being:

1. Homesteads may now be declared where the home is owned by a trust
2. If the Homestead is declared while the owner is single, and the owner then gets married, the homestead shall accrue to the benefit of the new spouse, and that benefit shall accrue as of the date of the original filing.
3. The new statute anticipates that a homestead may be declared by multiple owners. That is, each co-tenant, joint owner or tenant by the entirety may declare their own homestead.

The risk of venturing into home ownership has been keeping many potential buyers from entering the market and the housing sector continues to struggle as a result. Mortgage interest rates are currently on the rise and the last several weeks are revealing an upward trend for long term rates. American citizens are looking for stability and predictability to help them make the jump into the home buying process. Predictability however, may be taken away.

One carrot that has been dangled to help promote home ownership is the primary residence tax and interest deduction that new home owners could benefit from come tax time. That deduction is on the chopping block and homeowners may no longer be rewarded as they have been in the past for taking on the risks and responsibilities of owning and maintaining a home. The national deficit is swelling more than anyone wants and the income tax deduction for mortgage interest is now a potential provision that the government may extinguish. The cut back is one that the federal government is willing to entertain as a way of working towards lowering the national deficit. It is being considered by the National Commission on Fiscal Responsibility and Reform and it is among several trillion worth of deficit cutting ideas on the table for the government to consider. All in the housing sector will be closely monitoring this push as outcomes will affect the American dream of home ownership.

Source: Stephen Johnson, Author