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CSA TRAVEL INFORMATION GUIDE
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Operating Costs
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Closing Costs
These categories will raise considerations that potential purchasers should investigate prior to signing
any offer to purchase.
Homestead Exemptions on U.S. Property
Homestead exemptions are U.S. state laws or regulations that are restricted to permanent or primary
residences rather than seasonal or secondary homes. Individuals apply for homestead exemptions
upon the purchase of their property, and exemptions are based upon the value of the property at the
time of purchase. In some states, homestead exemptions provide forms of creditor protection, and in
others they limit the property tax due and payable in any given year. As such, seasonal or secondary
property owners may be subject to substantially higher taxes than the permanent or primary
residents of any given state.
Permanent or primary residence is defined as the place where an individual has a true, fixed and
permanent home and principal establishment to which the individual, whenever absent, has the
intention of returning. Homestead exemptions do not apply to Canadian citizens and permanent
residents, unless they have U.S. citizenship or U.S. permanent resident status, and can reside beyond
the annual limit of 182 days or 90 days respectively.
When deciding to purchase real property in the United States, it is important for any foreign
(Canadian) buyer to investigate the existence and provisions of:
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Homestead acts
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Homestead exemptions
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“Save Our Homes” state constitutional amendments
As the majority of real estate agents are accustomed to dealing with local purchasers who would
automatically be eligible to apply for a homestead exemption, be sure to verify that any property tax
figures shown or quoted in a real estate listing or offer to purchase truly reflect the rate that will be
paid by a foreign purchaser who is ineligible for a property tax exemption.
Arizona Homestead Exemptions
Arizona homestead exemptions relate to the protection of a principal residence against some claims
made against the owner by certain creditors. Prior to July 1994 this protection was not automatic. In
July 1994 a new law went into effect that generally dispensed with that requirement and made them
automatic. An individual or married couple is entitled to only one homestead exemption. It applies to
the permanent home, condominium, mobile home and the land on which the mobile home sits. It is
limited to $100,000 equity in the principal home and does not apply to the obligations of mortgages,
deeds of trust, tax liens and valid liens for labour or materials supplied to the property.
Arizona homestead exemptions do not affect property taxes.
California Homestead Exemptions
California homestead exemptions, like Arizona, relate to the protection of a principal residence
against some claims made against the owner by certain creditors or in bankruptcy proceeding.
They do not affect the property taxes.