Question: What is "homesteading?"

Answer: "Homesteading" today often refers to property tax relief for owner-occupants. Such programs, when they exist, are state specific.

In some states, for example, a "declaration of homestead" may protect some assets in the event of an adverse judgment or bankruptcy.

International Falls, MI was giving away 40-acre lots in 1989. This is an example of a rural homesteading program.

There are also urban homesteading programs designed to encourage property ownership in designated areas. A property is sold for $1, for example, with the understanding that the buyer will renovate the property and use it as a residence once repaired.

For historic information, look at the Armed Occupation Act of 1842 and the Rural Homestead Act of 1862. For current information, check with local brokers, attorneys, and tax professionals to see how "homesteading" applies in your state.