The basis of assessments for property taxes in Kentucky is one hundred (100) percent of fair cash value. The county Property Valuation Administrator (PVA), an elected state official, assesses taxable property for the state, the county, school districts, and for most special taxing districts. Only one school district tax is imposed, depending on the company’s location in the county or city. Assessments are based upon property held on January 1st of each year. Taxpayers are required to report the value of all of their taxable property to the local PVA annually.

State and Local Property Tax Rates

For Further Information visit the Kentucky Rate Book.

*Separate Jurisdictions encompass fire districts, community college, libraries and other local community services.

Property Tax Exemptions/Reductions

• Private leasehold interests in property owned and financed by a governmental unit through industrial revenue bonds are taxed by the state at $0.015 per $100 of leasehold value with approval from KEDFA. The same KEDFA approval will exempt the leasehold value from local property taxes. Exemption from local property taxes only on the leasehold value (no state property taxes included), does not require KEDFA approval. Businesses leasing real estate or personal property from a tax-exempt owner, other than property financed by industrial revenue bonds, must pay full state and local property taxes on their leasehold value.
• Cities may exempt the property of new manufacturing facilities from city property taxes for up to five (5) years as an inducement for the location of a plant in the city. This exemption cannot be granted by the state, by counties, by special districts, or by school districts.
• Enterprise zones have been established in ten (10) redevelopment areas in Kentucky. Both the city and county may exempt buildings owned by qualifying businesses in an enterprise zone from increases in assessed value for a five (5) year period. In addition, city and county property tax rates may be set as low as 1/10 cent per $100 valuation.
• Tangible personal property located in a federally designated and activated foreign trade zone (or sub-zone) are exempt from all local property taxes , provided that the zone is activated in accordance with the regulations of the United States Customs Service and the Foreign Trade Zones Board. The state rate is only 1/10 of 1 cent per $100 of assessed value.
• City and county governments may grant a moratorium on increases in the assessed value of property taxes of older commercial structures for up to five (5) years following their rehabilitation, repair, restoration, or stabilization by owners or lessees. Structures must be at least twenty (25) years old to qualify. The project becomes eligible for a second assessment moratorium after a three (3) year waiting period.
• State law allows for favorable tax treatment for finished goods inventories. The state rate on finished goods inventory is only five (5) cents per $100 of assessed value. Cities, counties, and urban-county governments may exempt or levy rates on these business inventories that are less than the prevailing rate of taxation on other tangible personal property.
• Personal property placed in a warehouse or distribution center for subsequent distribution to an out-of-state location within six months is exempt from state, city, county, and school district personal property taxes. Finished goods at the end of the manufacturing process that are placed in a warehouse or distribution area for subsequent shipment out-of-state, may qualify for the in transit goods property tax rate.
• A Brownfield incentives program provides a state property tax rate of $0.015 per $100 value assessed on all qualifying voluntary environmental remediation property provide the purchaser has obtained a covenant not to sue from the Environmental and Public Protection Cabinet. This rate shall apply for 3 years following the issuance of the covenant not to sue; after which the regular rate will apply. The local property taxes are exempt for the 3-year period.
• Intangible property (money in hand, notes, bonds, accounts receivable, mortgage receivables, intercompany intangible personal property due from affiliates, patents, copyright, trademarks, and other credits) effective January 1, 2006, is exempt from state and local property tax, with the exception being the intangible property of financial institutions and life insurance companies.