Most real property owners in Kentucky have to pay property taxes. While property taxes in Kentucky are relatively low overall, there are fewer discounts and exemptions compared to other states.
Who has to pay Kentucky property taxes?
Almost every real property owner in Kentucky has to pay property tax. This includes both homeowners and businesses.
There are limited exemptions for the elderly and disabled that often only reduce not eliminate property taxes (more below).
What is the Kentucky property tax rate?
Kentucky currently has a statewide property tax rate of 12.2 cents per $100 in assessed value. For example, the statewide property tax on a home with a $100,000 assessed value would be $122.
Under Kentucky law, if property tax revenues increase by more than 4% in a year, the state must lower the statewide property tax rate. Statewide property tax rates are set on July 1 each year.
Each Kentucky county and school district can also set a local property tax rate. Local governments also usually have to set their property tax rates so their property tax revenues don’t go up by more than 4% per year, but they can set a higher property tax rate after a public hearing.
The total property tax rate on a Kentucky home usually works out to between 0.6% and 1% depending on which county you live in.
When are Kentucky property taxes due?
Kentucky property taxes are usually due on December 31. Some counties have an early payment discount if you pay by a certain date before then.
Property tax bills usually go out in September, but county tax bills may arrive separately in October or November.
You may receive multiple property tax bills and may have to make multiple payments. This could be directly to the state, your county, or your city. Make sure you’re aware of who taxes properties in your area as not receiving a property tax bill doesn’t mean you don’t have to pay.
What is the penalty for not paying Kentucky property taxes?
Kentucky property tax penalties vary by county.
You may see a penalty of around 5% to 20% or higher of your tax owed if you pay your property tax bill a month or two late. Some places increase the penalty after a certain amount of time.
Once your property tax bill remains unpaid for long enough, a tax lien may be placed on your home, and your home may be subject to an eventual foreclosure and tax sale.
Kentucky Homestead Exemption
The Kentucky homestead exemption allows eligible homeowners to reduce their property taxes.
How much is the Kentucky homestead exemption?
The Kentucky homestead exemption is adjusted for inflation every two years. In 2021 and 2022, the exemption is equal to $40,500.
This means that $40,500 of your home’s value is exempt from property taxes. For example, if your home is assessed at $100,000, you’ll only pay property taxes as if it’s worth $59,500.
Assuming a 1% property tax rate, you can expect a $405 property tax savings once you have the homestead exemption. Many counties have a slightly lower tax rate which gives you a smaller savings but lower taxes to begin with.
Note: There is a separate bankruptcy exemption worth $5,000 with different requirements than the property tax exemption.
Who qualifies for the Kentucky homestead exemption?
In order to qualify for the Kentucky homestead exemption, the home must be your permanent residence. Rental properties, vacation homes, or second homes generally won’t qualify.
You also must fall into one of two categories. Kentucky’s homestead exemption doesn’t apply to all homeowners.
Age 65 or Older
You can receive the homestead exemption if you’re age 65 or older. You can prove your age with a driver’s license, birth certificate, passport, or similar documentation.
If you’re married, typically only one spouse needs to be age 65 or older to qualify if you’re both living in the home.
You generally only need to be age 65 during the tax year, so you can typically receive the exemption in the year you turn 65.
Do you have to pay property tax after age 65 in Kentucky?
Remember that the exemption only reduces your home’s assessed value. It doesn’t stop all property taxes.
Unless your home’s value is equal to or lower than the exemption amount, you have to pay property taxes after age 65 unless you qualify for another special exception.
Disability
People who are any age and have been classified as totally disabled can also receive the homestead exemption. The determination must be made by an agency of the U.S. Government (such as the VA or Social Security), a Kentucky retirement system, or another state’s retirement system.
You typically also need to be receiving disability payments to qualify. See Ky. Rev. Stat. § 132.810.
You must provide documentation of your disability when you apply for the homestead exemption.
You also have to renew your application annually unless you’re
- A veteran of the U.S. armed forces and have a service-connected disability,
- The Social Security Administration has determined you to be totally and permanently disabled, or
- The Kentucky Retirement Systems have determined you to be totally and permanently disabled.
Is there an income limit for the homestead exemption?
There is no direct income limit for the homestead exemption unlike the North Carolina homestead exemption.
In some cases, having income could impact your disability eligibility and ability to qualify for the disability exemption.
How do you apply for the homestead exemption in Kentucky?
To apply for the homestead exemption, you’ll need Application For Exemption Under The Homestead/Disability Amendment – Form 62A350.
Return the application to the property value administrator for your county. You can also contact your property value administrator if you have questions about the requirements or application process.
You can also usually visit your property value administrator’s office. Some counties also have special sign-up events at various places to give you additional options.
The deadline to apply is typically December 31st each year.
What happens if you move?
If you move, you will usually need to complete a new application for your new home. The homestead exemption generally won’t automatically transfer even though you’ll usually continue to qualify.
Can there be multiple homestead exemptions on the same home?
There is generally only one homestead exemption per household. So if you and your spouse are both over age 65, you wouldn’t get a double exemption.
Can you lose the homestead exemption?
You may lose the homestead exemption if:
- You no longer maintain the home as your primary residence
- You no longer have a spouse age 65 or older if you are not also 65 or older
- You no longer meet the disability requirements
You must notify the property value administrator if you no longer meet the requirements for the homestead exemption.
You generally need to do so immediately rather than waiting for the next application renewal, since it could impact the current tax year.
If you continue to claim the homestead exemption when you’re not eligible, you could have to pay additional property taxes plus fines.
