Yes, your home counts in your net worth. The standard calculation adds your home equity (market value minus any mortgage and other loans secured by the property) to your other assets. But the question of whether net worth includes your home has a more complicated answer once you leave general accounting, because several legal frameworks deliberately exclude the primary residence or cap how much of its equity counts. The SEC strips it out of accredited investor calculations, SSI ignores it entirely, Medicaid caps protected equity, and bankruptcy law shields a portion from creditors. Which answer is right depends on why you’re asking.
The Standard Net Worth Calculation
Net worth is everything you own minus everything you owe, and your home sits on the asset side because it can be sold, borrowed against, or passed to heirs. For most American households, real estate is the largest asset category, which means home values move net worth more than any other single factor.
The figure that counts is equity, not the home’s full market value. Equity is what’s left after subtracting every debt secured by the property: the primary mortgage, a second mortgage if you have one, and any home equity line of credit. A home appraised at $400,000 with a $250,000 mortgage balance contributes $150,000 to your net worth. Pay the mortgage down to $200,000 while the home’s value holds steady and your net worth has risen by $50,000.
The math runs the other way too. If total debt on the property exceeds its current market value, the home drags your net worth down instead of lifting it. A $300,000 home carrying $320,000 in combined mortgage and HELOC debt subtracts $20,000 from your balance sheet. This underwater situation was common after the 2008 housing crash and still shows up in markets with sharp price corrections.
Why Home Equity Isn’t the Same as Cash
Home equity is real wealth, but it isn’t liquid. You can’t peel off $50,000 of equity and deposit it the way you could sell $50,000 of stock. Converting equity to cash means selling the property or borrowing against it, and both options come with costs that shrink what you actually receive.
Selling a home typically costs 6% to 10% of the sale price once you add agent commissions, transfer taxes, title fees, and other closing costs. On a $400,000 sale, that’s $24,000 to $40,000 that never reaches your pocket. A professional appraisal to establish fair market value runs a few hundred to over a thousand dollars depending on the property and location. These friction costs mean the equity figure on your personal balance sheet overstates the cash you’d walk away with if you actually sold.
For a realistic personal snapshot, use a current, honest market value (not the highest online estimate you can find) and keep in mind that the equity line is a gross figure. Retirement plans that lean heavily on home equity assume you’ll eventually tap it through downsizing, a reverse mortgage, or an outright sale. Each of those paths carries its own costs.
When the SEC Excludes Your Home
The most consequential legal exception comes from the SEC’s accredited investor standard. To invest in private offerings like hedge funds, venture capital funds, or private placements, you generally need to qualify as an accredited investor. One way to qualify is a net worth above $1 million, individually or jointly with a spouse. For this calculation, your primary residence is completely excluded.
The exclusion removes both the home’s value from the asset column and the mortgage from the liability column. The home and its associated debt disappear from the equation. If you have $850,000 in non-home assets and $20,000 in non-home debt, your accredited investor net worth is $830,000, whether your home is worth $200,000 or $2 million.1U.S. Securities and Exchange Commission. Accredited Investor Net Worth Standard
The exclusion applies only to a primary residence. Vacation homes, rental properties, and other real estate still count as assets.2U.S. Securities and Exchange Commission. Review of the Accredited Investor Definition Under the Dodd-Frank Act A rental property worth $600,000 with a $400,000 mortgage adds $200,000 to your accredited investor net worth, while the home you live in adds nothing.
Two Traps to Watch For
If your mortgage exceeds your home’s fair market value, the excess counts as a liability even though the home itself is excluded. A home worth $600,000 with an $800,000 mortgage creates a $200,000 liability that reduces your accredited investor net worth.1U.S. Securities and Exchange Commission. Accredited Investor Net Worth Standard
If you increased the debt secured by your home in the 60 days before purchasing securities, that increase also counts as a liability. The SEC added this rule to prevent people from taking out home equity loans specifically to pad their investment accounts and reach the $1 million threshold.1U.S. Securities and Exchange Commission. Accredited Investor Net Worth Standard
If removing your home from the calculation drops you under $1 million, there’s an income path to the same status. You qualify if you earned more than $200,000 individually (or $300,000 jointly with a spouse) in each of the prior two years and reasonably expect the same in the current year.3U.S. Securities and Exchange Commission. Accredited Investors
When Government Benefit Programs Ignore Your Home
Federal benefit programs handle home equity under their own rules, separate from standard accounting or SEC regulations. The stakes are high because getting this wrong can cost eligibility for benefits that cover nursing home care or basic living expenses.
Supplemental Security Income
SSI provides cash assistance to low-income individuals who are aged, blind, or disabled, and it excludes a primary residence from its resource limits regardless of the home’s value. Someone could own a $2 million home and still qualify for SSI as long as they live there and meet the program’s other financial tests. The exclusion ends if the owner moves out without intending to return, at which point the equity becomes a countable resource. Victims of domestic abuse who flee their homes keep the exclusion until they establish a new primary residence.4Social Security Administration. 20 CFR 416.1212 Exclusion of the Home
Medicaid Long-Term Care
Medicaid takes a more nuanced approach. Federal law disqualifies individuals from nursing facility coverage if their home equity exceeds a threshold that states set between two federally defined limits, adjusted annually for inflation.5Office of the Law Revision Counsel. 42 USC 1396p Liens, Adjustments and Recoveries, and Transfers of Assets For 2026, those inflation-adjusted limits are approximately $752,000 and $1,130,000, depending on the state. Home equity below the applicable limit is generally protected during the recipient’s lifetime.
The lifetime protection has a catch. After a Medicaid recipient dies, states are required to seek recovery of payments from the deceased person’s estate for nursing facility and home-based care services. In practice, the state often places a claim against the home, and equity that was excluded during life effectively reimburses the government out of sale proceeds. States cannot recover while a surviving spouse, a child under 21, or a blind or disabled child of any age still lives in the home.6Medicaid.gov. Estate Recovery
How Much Home Equity Is Safe From Creditors
Bankruptcy and creditor law uses yet another framework, focused on what creditors can and cannot take. The federal homestead exemption under 11 U.S.C. § 522(d)(1) protects up to $31,575 of equity in a primary residence from being seized in bankruptcy, doubled to $63,150 for married couples filing jointly.7Office of the Law Revision Counsel. 11 USC 522 Exemptions
State homestead exemptions vary widely. A handful of states offer unlimited protection for home equity regardless of value, often with acreage limits on the property. Others provide no specific homestead exemption. Most fall somewhere between. Which exemption applies depends on the state and whether the debtor can elect state or federal exemptions, since not every state allows the choice. Outside of bankruptcy, judgment creditors can place liens on a home but rarely force a sale unless the equity significantly exceeds the homestead exemption plus existing mortgage debt and foreclosure costs.
Investment and rental properties receive no homestead protection. A creditor can pursue those properties without the equity shields that apply to a primary residence.
Picking the Right Answer for Your Situation
How you count your home depends on why you’re counting it. For a general financial snapshot, include your home equity using a realistic market value. For SEC accredited investor purposes, exclude it entirely and watch for the underwater and 60-day traps. For government benefit planning, know that the home is usually protected while you live in it but may be subject to Medicaid recovery after death. And for practical planning around actually spending the money, discount your equity by the 6% to 10% it would cost to convert it to cash. Each framework exists for a different reason, and using the wrong one either overstates your wealth or hides opportunities that are legitimately available.