Kentucky

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State of Kentucky Property Taxes


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State Tax Summary
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Real property tax is called property tax in the state of Kentucky. The state of Kentucky has one hundred and twenty counties, the third largest number of counties in the United States, with the county treasurer as the ex-officio collector in all counties. Kentucky has a large number of counties to make sure everyone could travel round trip on the poor roads and by horseback in a single day to the county seat. County Appraisers maintain and set property valuations as fair cash value, unless the real property qualifies for an assessment moratorium. The Board of Commissioners appoints, by contracts, the County Appraisers. County Clerks hold 4 year elected terms and certify market values and taxes. The County treasurers hold 4 year elected terms and collect current and delinquest taxes.

The Kentucky Department of Revenue http://revenue.ky.gov/ may assist local governments for compliance with the law and to ensure property tax assessments are fair. It does not collect or use property taxes. All county taxing authorities offer a 2% discount for payments received in the first 30 days. Property taxes are determined by the final tax rate as a result of budgets established to provide services, an assessor's assessment, a county auditor's calculations, and laws administered by the Kentucky Department of Revenue http://revenue.ky.gov/. Property assessment in Kentucky is established as the price if the property were sold at a voluntary and fair sale, except real property in assessment moratorium.. The Kentucky property tax is a tax on land, buildings, structures, and other improvements attached to the land, or placed upon a foundation. Typical improvements may be a building, house or mobile home, fences, and paving. Chapters 131 – 136 of the Kentucky Revised Statutes and the Kentucky Constitution contain the Property Tax laws (http://revenue.ky.gov/individual/propertytax.htm). The Kentucky constitution has personal exemptions for homeowners sixty-five years and older, and those who are classified as totally disabled. There are statutory exemptions for agriculture crops, alcohol production facilities, biotechnology products, bridges, cemeteries, certified pollution control facilities (local taxes only), financial institutions, motor vehicle dealers, religious , charitable and educational organizations. Property owners have four levels of appeal: 1. A conference with the property valuation administrator, beginning on first Monday in May and lasting for 13 day period; 2. An appeal to the County board of assessment; and 3. An appeal to the Kentuky Board of Tax Appeals (BTA) within 30 days after ruling from the Department of Revenue. 4.0 The judicial review of decious of the BTA can be appealed, within 30 days, to the Franklin County Circuit Court of court of county in which taxpayer is protesting. Taxpayers appealing the BTA must pay the tax contested or post a bond or send email to Albert.Becker@ky.gov for more information. The state agency is Kentucky Department of Revenue, 200 Fair Oaks Lane, Frankfort, KY 40620 (502) 564-4581. Property value administrators have specific property tax information and forms on website for Kentucky Department of Revenue http//:revenue.ky.gov/taxpro/PVA.htm There is a state issued assessor's manual, Boeckh Manual, is available for $15.00 from Kentucky Department of Revenue, Centrally Assessed Property, 330 Versailles Roaed, Suit 6, Frankfort, Kenturcky 40620; (502) 564-8175; FAX (502) 564-8192. The Chicago ASC (Area Service Center) provides tax service for Kentucky.

Contents

Assessment dates and rates

  • Assessment date January 1
  • Fiscal year : July through June 30
  • Tax payment date September 15, except for city taxes, which vary by class of city.
  • Reassessment cycle Not required
  • Classification of property :All property has no provision for different classes. All property in Kentucky is assessed at 100% of fair cash value
  • Level of government responsible for assessment County, City, School
  • Economic Loss Dates: One billing; One installment - all taxes due 30 days before the economic loss date. All counties offer a 2% discount for the first 30 days. Blue Ridge Manor and Briarwood City clerk collect a 25% discount for early payment . Fairview and Paduch offer payments in two installments and Paducah requires payment of the full amount at first installment if the tax is less than $35.00.
  • Tax Collector and Officials: The county taxes are colled by the county sheriff; the City taxes are collected the by city clerk; and the school taxes are collected by the school or the city clerk.

Personal Exemptions

Exemption claims must be filed by persons who own the property as a primary residence. Only one exemption is allowed per residence regardless of the number of qualified occupants.

  • Homestead Exemption

Homestead exemption applies to the value of real property only. Property owner must be at least sixty-five years of age or permanently and totally disabled The exemption amount is $26,800, exemption changes every two years and owner must have occupied their home as a primary residence since January 1 of the tax year .

  • Rehab of residential property

A moratorium may be declared for up to five years on existing residential property to encourage restoration, rehabilitiation, repair and stabilization of existing improvement.

  • Restricted Tax Bill Areas

A homeowner authorization form is not required for restricted Kentucky tax bill areas.

Form

A homeowner must file an application with the property valuation administrator in the county where applicant lives. Organizations must file Form 62A023 with the Kentucky Department of Revenue, 592 East Main Street, Frankfort, Kentucky 40260.

Commercial Exemptions

  • Coal credit

A coal fired electric generated plan may be claim for a credit for the purchase of coal used by the taxpayer to generate electricity. The credit is $2 for each ton of coal with this incentive, subject to coal tax, and purchased to generate electric power in the year. Credit may begin on July 15, 2001, and allowed for 10 years. A claim form for a coal incentive credit must be filed before or by March 15 annually.

  • Energy systems

An energy production facility may receive reduced state tax rates, and is exempt from local taxes.

  • Manufacturing

To encourage manufacturing, a local government may exempt a manufacturing establishment from local taxes for up to five years.

How property tax determined

Residential property is assessed at 100% of market value or Fair Cash Value = Assessed Value. Assessed Value – Exemption X Tax Rate = Taxes due. The assessor can use three methods:

  • Cost Approach at current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when the building is new, unique or no sales date for comparable properties.
  • Income Approach for an apartment or office building, estimate how much income the property can produce, when sufficient rental market information is available.
  • Sales Approach using other comparable properties that have sold recently, determine the most probable sales price of the subject property, when there are substantial sales.

How to prepare and Appeal and File

  • Valuation Notices : Notices are mailed in April if the appraised value is greater than preceding year; if appraised value is greater than value provided by owner; property was missing from assessment roll (US 1st). All property must be physically examined at least every four years, as prescribed by the Kentucky Revenue Cabinet.
  • Appeal Procedure or Levels

Any property owner or aggrieved taxpayer has four levels of protest. The first appeal process may start when the first-half of the taxes are paid by December 20. The property owner may not appeal twice, in December and April.

  • Appeal Calendar 45 days from date of mailing of notice

Personal property tax

  • Classification of property : Personal Property YES
  • Assessment rate: Within 45 days of assessment notice, protest must be made to the Kentucky Department of Revenue if taxpayer does not agree with personal property tax.

Commercial property tax

  • Classification of property Commercial and Industrial is Class VI
  • Assessment rate* : Class VI is assessed at 25% fair market value.

Agricultural property tax

  • Classification of property Agricultural is Class II
  • Assessment rate Class III is assessed at 30% of usage

Agricultural real estate is assessed at net earning capacity value and productivity. The assessor establishes agricultural income using prices,expenses, production and local conditions.

Additional tax bills and charges

If taxpayer cannot pay tax in full, contact the Kentucky Department of Revenue immediately, within 45 days and apply for a formal payment agreement http://revenue.ky.gov/laws/paymentagreement.htm

  • Corrected bill When an error results in a partial release or omissions, a new bill is issued any time during the year. When corrections are made, the corrected bills are issued.
  • Special Assessment bills

Taxpayers receive special assessment bills with property tax bills. These have the same due date as property taxes; however, if the first installment is delinquent, the full amount plus interest is due.

Penalty and Interest charges

Regular tax bills from the county that are not paid are delinquent on January 1 after the assessment date and 5% penalty for the month of January. After January 31, tax bills incur a 10% penalty and a 10% sheriff's fee. In Louisville City, the interest is 1.5% per month and 10% penalty is added in April for any uppaid taxes due.

  • Delinquent taxes : Payments may be made to collectors for current taxes when delinquent taxes are due . There is no data available if delinquency notices are sent when property taxes in Kentucky are late.
  • Construction Work in Progress* : Kentucky statutes are silent for work in progress, however, a building under construction is taxed if it is completed or not.
  • Leased property: Leased property is taxable to the lessor If part or all of the property is used or leased to a government agency, under the Governmental Leasing Act, then the property is exempt from all state, county, or local taxes in Kentucky.
  • Mobile Homes: Kentucky statutes classify mobile homes for tax levy and assessment of ad valorem taxes, as real property, regardless if mobile unit is on a fixed, permanent foundation or if wheels are still attached. Every April, valuation notices are mailed.

Equalization

None.

Omitted Property

For Kentucky, the sheriff collects omitted real property taxes. After 30 days, all omitted tax bills are delinquest and incur an 10% penalty of the total tax. After 30 more days, the sheriff must add 10% penalty and the interest is subject to change every year .

Current Legislation and Pending Issues

References





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