Legal Definition of Homestead: The house and land upon which a person or family makes their permanent residence. A personÆs homestead is generally exempt from debt collection (except by the lender who financed the homestead). The extent and definition of the homestead exemption varies by state | Discover the Legal Definition of Homestead and its Importance in Protecting Your Home. Learn how the legal concept of homestead provides sanctuary and security, and exempts your property from debt collection. Find out how to safeguard your homestead and make informed decisions with expert guidance.