Escrow & Title

In Oregon, what is a 'homestead exemption' and how does it protect homeowners?

AAn exemption from all property taxes for primary residences
BA protection that shields a certain amount of a primary residence's equity from general creditors and some judgments✓ Correct
CAn automatic exemption from capital gains tax when selling a home
DA zoning designation allowing home-based businesses

Explanation

Oregon's homestead exemption (ORS 23.240) protects up to $40,000 of equity in a primary residence from execution by general judgment creditors. This means a creditor cannot force a sale of the home to collect a judgment if the owner has $40,000 or less in equity. The exemption does not apply to mortgage lenders or to federal tax liens.

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