New Hampshire homeowners are about to receive significant new financial protections starting January 1, 2026. Governor Kelly Ayotte signed HB 617 into law in August 2025, increasing the homestead exemption limit.
For homeowners on the NH Seacoast, this change provides meaningful protection for the substantial equity you’ve built in your home. Here’s what you need to know.
What Is the New Hampshire Homestead Exemption?
The homestead exemption is a legal protection that shields your equity in your primary residence from certain creditor claims. Think of it as a safety net that prevents creditors from forcing the sale of your home to satisfy debts.
It’s important to understand that this exemption differs completely from property tax exemptions like the elderly or veteran exemptions that reduce your tax bill.
Here’s what makes New Hampshire unique: You don’t need to file anything to obtain these rights. The protection is automatic as long as you meet the basic requirements. This differs from states like Massachusetts, where homeowners must file a homestead declaration with the registry of deeds.
How the Homestead Exemption Works
The equity you have in your home is the difference between your home’s value and what you still owe on your mortgage. New Hampshire’s homestead exemption protects your equity from “unsecured creditors.”
These are lenders that have provided you with a loan or credit without securing it with collateral.
For example, if you owe $300,000 on a home worth $700,000, your equity is $400,000. Under the new law, an individual homeowner’s entire $400,000 in equity receives protection from most creditor claims.
What Changed Under the New Law
The previous exemption protected just $120,000 for a single person and $240,000 for married couples. These amounts originated from legislation passed in the 1800s. They hadn’t kept pace with modern home values.
The new exemption jumps to $400,000 for an individual and $550,000 total for co-owners. That’s more than a 230% increase for individuals. The new exemption provides substantially more meaningful protection for today’s homeowners.
Additional Protections Added
Beyond raising the dollar amounts, HB 617 added important new protections:
- Medical Debt Protection: The law now provides unlimited protection for debts arising from unpaid medical bills or catastrophic, terminal illness, or injury.
- Rollover Protection: The new law also includes a rollover provision. If you sell your primary residence and buy another one, the proceeds from your sale remain protected as long as you reinvest them in a new primary residence within six months.
We’ll go deeper into how these protections work in the next section. We’ll also explore what the law does not protect against.
Deeper Into the Protections from NH HB 617
The key driver of this law is to provide homeowners with additional protection in times of hardship. Here, we’ll go deeper into how these protections work.
Unsecured Debts Covered
The homestead exemption shields your home from unsecured creditors who obtain judgments against you. Credit card debt, medical bills, personal loans, and similar obligations fall into this category.
If a creditor sues you and wins a judgment, they generally cannot force the sale of your home if your equity falls within the exemption amount.
The exemption also plays a crucial role in bankruptcy proceedings. Whether you file Chapter 7 or Chapter 13 bankruptcy, the homestead exemption helps protect your home equity. In Chapter 7 bankruptcy, the trustee cannot liquidate your home if your equity is fully protected by the exemption.
What the Exemption Does NOT Protect Against
The homestead exemption doesn’t protect you from secured debts tied to your property. Your mortgage lender and home equity lender can still foreclose if you default on those loans.
These creditors hold liens on your property, which supersede the homestead exemption.
Property tax liens also take priority over the homestead exemption. If you don’t pay your property taxes, your municipality can still place a lien on your home and eventually force a sale.
Mechanic’s liens for the construction, repair, or improvement of your homestead are similarly not affected by the exemption.
Condominium and homeowner association liens for unpaid assessments remain enforceable as well. These debts are directly tied to your property ownership and fall outside the homestead exemption’s scope.
Why The Increased Homestead Exemption Matters for NH Seacoast Homeowners
Home values on the NH Seacoast have increased dramatically over recent years. The median single-family home price reached $689,000 in August 2025, up 7.7% from the previous year. Some Seacoast communities command even higher prices.
Many Seacoast homeowners have built substantial equity that far exceeded the old $120,000 or $240,000 limits. Under the previous law, significant portions of your equity remained vulnerable to creditor claims.
To put the increase to the exemption in perspective, the old exemption covered less than 20% of the equity in a median-priced Seacoast home. The new exemption limit covers about 58% of it.
In other words, it provides protection that reflects actual home values in our region.
Better Protection in an Uncertain Economy
Medical debt remains one of the leading causes of bankruptcy filings nationwide. Healthcare costs continue rising, and even families with insurance can face overwhelming bills from serious illnesses or accidents.
According to one report, 41% of U.S. adults have healthcare debt of some kind.
Meanwhile, a survey by the Consumer Bankruptcy Project found that medical debt was the second-most-cited cause of bankruptcy. Specifically, “78% cited a decline in income as a reason for their bankruptcy, and 65% reported that their bankruptcy stemmed from medical issues, such as doctor bills or prescriptions, or medical problems that caused the filer or their partner to miss work.”
The unlimited protection for medical debt under the new law provides crucial security for NH families.
Economic uncertainty makes asset protection increasingly important, as well. Job losses, business failures, and unexpected financial challenges can happen to anyone. Knowing that your home equity enjoys substantial protection offers peace of mind during difficult times.
Qualifying for the New Hampshire Homestead Exemption
You must legally own and occupy the property as your primary residence to qualify for the homestead exemption. The following types of properties do not qualify:
- Second homes
- Vacation properties
- Investment properties
- Rental properties
The law requires continuous use as a primary residence for the previous 12 months before you can claim the exemption.
The exemption applies to various types of residential properties. Single-family homes, condominiums, manufactured homes in mobile home parks where you own the home, and housing cooperatives all qualify.
What matters is that you own and occupy the property as your primary home.
What Homeowners Should Do
Here’s the good news: New Hampshire’s homestead exemption is automatic. You don’t need to file paperwork, record documents, or take any action to receive this protection.
As long as you meet the eligibility requirements, the exemption applies to you starting January 1, 2026.
Maintain Documentation
That said, maintaining documentation of your primary residence status is smart. Keep utility bills, voter registration, and tax returns showing your NH address. If you ever face creditor claims, this documentation proves your eligibility for the exemption.
Reinvest in a New Residence After Selling
If you’re selling your home and buying another, remember the six-month rollover window. You maintain protection on the proceeds from your sale as long as you reinvest them in a new primary residence within six months.
This provision ensures you don’t lose your homestead protection during life transitions.
Speak with an Attorney
Consult with an attorney if you face financial difficulty or creditor claims. While the homestead exemption offers broad protection, your specific situation may involve complexities that require legal guidance.
Seacoast Homeowners and the New Hampshire Homestead Exemption
The increase in New Hampshire’s homestead exemption represents a significant victory for homeowners. Starting January 1, 2026, you’ll have substantially more protection for the equity you’ve worked hard to build in your home.
This change acknowledges the reality of modern home values, particularly on the NH Seacoast, where prices have risen considerably over the past decade.
For most Seacoast homeowners with substantial equity, this change provides meaningful peace of mind. Your home is likely your family’s most valuable asset. Enhanced protection against creditor claims means greater financial security for you and your loved ones.
Remember that this is creditor protection, not a property tax benefit. It won’t reduce your property tax bill. However, it serves as an important legal safeguard that shields your home equity from most unsecured debts and provides unlimited protection against medical debt.
