Representative Litchfield advocates for New Hampshire homestead exemption increase to $1M

New Hampshire's Senate Ways and Means Committee convened on April 16, 2025, to discuss a significant legislative proposal aimed at updating the state's homestead exemption. Representative Melissa Litchfield introduced a bill that seeks to raise the homestead exemption limit from $120,000 to $1 million, reflecting the rising home values across the state.

The proposed legislation aims to protect homeowners from losing their primary residences due to financial hardships, such as medical bills or civil suits. Litchfield emphasized that the current exemption, which has not kept pace with the market, fails to adequately safeguard individuals, particularly in light of New Hampshire's housing crisis. She noted that the median home prices in areas like Portsmouth and Atkinson have surged to over $1 million, making the existing exemption insufficient.

Supporters of the bill, including bankruptcy attorneys and small business advocates, argue that the increase is essential to prevent homeowners from losing their properties during bankruptcy proceedings. They highlighted that many individuals facing financial difficulties often find themselves at risk of losing their homes due to the low exemption limit, which does not reflect the current economic landscape.

However, the proposal has faced opposition from the New Hampshire Bankers Association, which expressed concerns over the dramatic increase in the exemption amount. They argue that such a significant change deviates from historical practices of incremental adjustments based on economic conditions and could create instability in the housing market.

The committee's discussions also touched on various provisions within the bill, including the treatment of trusts and the implications for mortgage lenders. As the debate continues, the outcome of this legislation could have far-reaching implications for homeowners and the financial landscape in New Hampshire. The committee is expected to deliberate further on the bill, weighing the need for homeowner protection against the potential risks highlighted by financial institutions.