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Iowa Homestead Laws

Once you own a house, you also gain the worry of losing it. Especially if times are tight and creditors come calling, the first concern could be your home. Luckily, the Hawkeye state homestead protection laws designed to protect people from losing their homes in the event of a bankruptcy. These statutes allow a person in debt to set aside a specific amount of real property, usually referred to as a "homestead," that would be off limits to certain types of creditors. Here is an introduction to homestead laws in Iowa.

Homestead Statutes in Iowa

State homestead laws do place a limit on the value or acreage of property that can be designated as a homestead. The Hawkeye State allows citizens to set aside 40 acres of rural property or a half-acre of urban property under its homestead protections, and caps the value of protected personal property at $500. The chart below below lists the details of Iowa's homestead statutes.

Code Section

Iowa Code 561.1, et seq.: Homestead

Max. Property Value That May Be Designated "Homestead"

$500

Maximum Acreage (Urban)

1/2 acre

Maximum Acreage (Rural)

40 acres

As good as they are, state homestead laws may not protect you from every debtor. As most homestead laws are written, there are four exceptions under which it is possible to be forced to sell or forfeit property or real estate:

  • If there was a pre-existing lien on the property before the establishment of homestead;
  • If the homestead property was specifically pledged as credit for a mortgage;
  • If you owe past due taxes to the State of Iowa and Iowa counties or municipalities; or
  • If you owe money to mechanics, contractors, or builders for work performed in repairing or improving the property.

And because homestead protections exist at a state level, federal income tax liens could be superior to Iowa’s homestead exemptions. The Constitution’s Supremacy Clause makes state law subject to override by federal law. That said, the Internal Revenue Service (IRS) has for the most part been reluctant to foreclose on a citizen’s home to collect on a tax debt. The IRS normally only gets involved in situations where a homestead property is mortgaged or sold off before a federal tax lien expires.

Iowa Homestead Laws: Related Resources

State real estate statutes can be difficult to decipher, especially where bankruptcy laws may overlap. You can find additional articles and resources in FindLaw's section on Homestead Protections. You can also consult with an Iowa bankruptcy attorney or anIowa real estate attorney if you would like legal advice regarding homestead issue.

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