Property Taxes in Kentucky (Fayette Co. is below)
1. They are paid in arrears, annually, on a calendar year.
2. All bills get mailed out sometime during the month of October, by each county’s sheriff’s department.
3. Tax bills most always get mailed to whoever the owner of record was, on January 1st of the current year. This means that the seller, not the buyer, will receive the tax bill in the mail in October. If you have a lender and you escrow your taxes/insurance, then where the bill gets mailed does NOT matter – Why? Because the lender will get online and get your tax bill and pay it – they do not wait to get something in the mail.
However, if you paid CASH for your house, or if you waived escrow, then because the bill gets mailed to the seller and NOT you the buyer, then YOU have to be the one who calls the sheriff (or get on their website) to find out what your tax bill amount is, in October the FIRST year you own the home, and then pay your tax bill. Once January 1st rolls around, they will pick up your new address and mail it to you thereafter. That 1st year, however, you’ll have to get the bill yourself. Whether you get a bill in the mail or not, it does not matter, you are still 100% responsible for its’ payment.
4. There is a 2% discount if paid in November.
5. The face amount of the bill is due if you pay in December.
6. Late fees will be a assessed if you pay after December 31st.
7. You may apply for a homestead exemption by calling your county’s PVA office (Property Valuation Authority). – That exemption (discount) is for folks over certain ages. You might not be able to get this exemption in the year in which you buy your new home.
8. January 1st of each year, all new deeds are reviewed and the purchase prices are entered as your property’s new tax assessment value.
9. This means the year in which you buy your home, you will pay the tax bill based on the seller’s tax assessed value – usually less than the purchase price. So, you get a little bit of a discount the first year. The following year, on January 1st, the new price will be picked up and entered as the new assessed value of the property.
Fayette County is the only county out of 120 counties that does theirs a little differently – this difference ONLY affects pro-rations on the closing disclosure:
1. The issuance and payment of tax bills are the exact same in al 120 KY counties, as detailed above.
2. However, in Fayette County, when you pay your 12-months’ worth of taxes at the end of each year, you are actually paying half in arrears, and half in advance…that’s for the 2nd half of this year, and the 1st half of next year. This is because Fayette County’s taxes are assessed on a fiscal year of July 1-June 1. All this means is that the tax prorations on the closing disclosure my appear odd to folks not from Fayette County. That’s it!
3. Example: Say you’re the buyer and your closing is going to be March 1st. The sellers have paid their taxes, and that’s for all the way through June 30th. So, you owe them back for the portion of the year they paid for but which you will be owning the home – you owe them a refund for the tax amount for March 1st thru June 30th. The title company will show this prorated amount on the closing disclosure. It will show as a charge to the buyers, and a credit to the sellers.