Kentucky Property Tax law establishes the assessment date as January 1st of each year. All property is assessed as of that date. Property tax is an ad valorem tax, which means according to value.
Kentucky has had a tax on property since June 1, 1792, the date the State was created.
The Department of Revenue was created in 1936 to administer all state taxes.
In 1965, the Kentucky Court of Appeals ruled in the Russman vs. Luckett case that the fair cash value standard must be adhered to.
The Department of Revenue was changed to the Revenue Cabinet in 1982. The Department of Property Taxation (now the Department of Property Valuation) was created. The department is comprised of the Commissioner’s Office plus three divisions:
- State Valuation
- Local Valuation
- Technical Support
The Revenue Cabinet is one of the administrative agencies of the Executive Branch of State Government.
Real Property includes all lands within this state and improvements thereon.
In 1990 the General Assembly, as part of the Kentucky Educational Reform Act (KERA) mandated that all real property be assessed at 100% of Fair Cash Value.
| Examples of Different House Values |
1
$165,000 |
2
$165,000 |
3
$150,000 |
4
$105,000 |
If two pieces of property are equal, they should be assessed equally.
What’s the Problem
When equal property is assessed equally, at fair market value, there is no problem. The problem comes when two comparable properties, like numbers 3 and 4 above, have different valuations.
What’s being done to solve the problem?
All taxable real estate in Rowan County is revalued to ensure that everyone is treated fairly and equally. Our systematic approach will revalue property, equalize assessments and comply with state laws.
What requires that property be revalued?
The Kentucky Constitution and KRS 132.690. The Kentucky Revenue Cabinet monitors and enforces compliance with the law. All property must be revalued each year and must be physically examined at least once every four years.
What is “Fair Market Value?"
It is the estimated prices that a willing buyer would pay and a willing seller would accept. In other words, it is an estimate of how much a property is really worth.
How can I estimate what is the “fair market value” of my property?
Simply look at similar properties that have sold recently. This will give you a good idea of the value of your home or property.
Why are some assessments unequal?
This is the most common situation.
1
$105,000 |
2
$150,000 |
1. Property #2 sells and the actual sale price sets the assessed value for the property.
2. Similar property #1 has not sold in many years. It has an older assessment that is not as high as the “fair market value” established by the property that sold.
3. The properties are equal, but the assessments are not.
4. Property #2 will be used as a comparable value when property #1 is reassessed.
Personal Property includes all property except real estate.
Tangible Personal Property includes automobiles, construction equipment, manufacturing machinery, merchandise, livestock, and furniture and fixtures.
Intangible Personal Property includes property which has no intrinsic value such as bonds, mortgages, notes, and accounts receivable.
Two Constitutional Amendments were passed to lessen the tax burden on certain groups of property owners: The Agricultural Land Use Exemption and the Homestead Exemption, which was broadened to include totally disabled homeowners.
