These Cities Have The Lowest Property Taxes In Kentucky

Lowest Property Taxes In Kentucky

One of the things that you absolutely must think about before buying a home is all of the different costs involved. For example, even if you can afford the mortgage, you shouldn’t buy a home if you can’t also afford the property taxes. So, it’s important to consider property taxes. Here are the cities with the lowest property taxes in Kentucky.

Kentucky Property Taxes

Every state taxes real estate. However, they vary a lot in how they do so. For example, in some states, you have to pay both local and state-level real estate taxes. Oftentimes, this can amount to a high rate for your taxes. After all, you pay a combined tax. However, even though Kentucky does have both levels of property tax, they also have a unique law that limits how much homeowners pay.

Stacker explains that that “anytime the statewide real property assessment total exceeds the previous year’s assessment totals by more than 4%,” the state real property tax must be reduced. This has resulted in declining real estate property tax rates at the state level. Moreover, although each county is responsible for setting their local tax rates, additional laws limit the amount of annual property tax increases there as well.

Kentucky Compared To The Rest of The United States

There are a few different factors to take into consideration when comparing a state’s property taxes with those of other states. Of course, you want to look at the effective real estate tax rate. This refers to the percentage of the property’s value that you pay each year in taxes. So, it’s given as a percentage number. This number, according to WalletHub, ranges from just 0.28% in Hawaii up to 2.49% in New Jersey. Kentucky is listed as .86%. It’s ranked 23rd on the list, so it’s right in the middle range of the country’s property tax rate.

However, you also want to consider the median home price in the state. After all, a low property tax rate on a very expensive house is still a high number. In contrast, where homes are less expensive, a higher property tax rate doesn’t cost as much in terms of real money paid. WalletHub reports that Kentucky’s median home value is $141,000, resulting in annual property taxes of $1210 for that median home value. If you had a home worth $217,500 in Kentucky then you’d pay $1866 per year in taxes.

SmartAsset’s numbers are slightly different but within a relatively similar range. They report that Kentucky’s effective property tax rate is 0.83%, resulting in median property tax payments of $1257 annually. They note that the median across the country is more than twice that, so Kentucky does have low property taxes compared to many other states.

Lowest Property Taxes In Kentucky

There are 120 different counties in the state of Kentucky. As aforementioned, each county sets their own property tax rates. According to Smart Asset, Campbell County has the highest average effective tax rate in the state, way up at 1.17%. Kenton, Gallatin, and Pendleton counties also all have effective tax rates exceeding 1%.

In contrast, the cities with the lowest property taxes in Kentucky are located in Carter Country. There, the average effective rate is .51%. If you look at that nationwide Wallet Hub list, you’ll see that this county is comparable to Colorado, the third lowest effective property tax rate in the nation at the state level.

According to this report, there are three other Kentucky counties that have a rate lower than 60%: Magoffin, Johnson and Todd counties.

Cities with the Lowest Property Taxes in Kentucky

Here are the cities within each of those four counties that have the lowest property taxes in Kentucky:

Carter County:

Magoffin County:

Johnson County: 

Todd County

Note that there are also many unincorporated communities within each of these Kentucky counties.

Median Annual Property Tax Payment

As aforementioned, it’s important to factor in a variety of different things when looking at home buying and property taxes. Just like at the state level, a county that has higher or lower median home values can have higher or lower annual property taxes despite the effective percentage rate. So, we have to consider the median home values as well. When we factor in both the median home value for each Kentucky county as well as the county’s effective tax rate, we discover that there are both similarities and differences in the cities with the lowest property taxes in Kentucky.

In this calculation, Clinton County is lowest with a median home value of just $65,400 and an annual payment of just $412. Magoffin County is on the list again, at number two, with a median home value of $72,300 and an annual payment of $414. There are actually 16 Kentucky counties where the average annual property tax payment is below $500! Carter County is also on that list, although Todd and Jonhson counties are not.

Cities with the Lowest Annual Property Tax Payments in Kentucky

Here are the cities in those 16 counties:

  • Albany
  • Blackey
  • Campton
  • Clay City
  • Concord
  • Fleming-Neon
  • Frenchburg
  • Fulton
  • Grayson
  • Hickman
  • Hindman
  • Hyden
  • Jackson
  • Jenkins
  • Manchester
  • Middlesboro
  • Olive Hill
  • Pineville
  • Pippa Passes
  • Salyersville
  • Sandy Hook
  • Stanton
  • Vanceburg
  • Vicco
  • Whitesburg

So, by that particular way of calculating, those would be the 25 cities with the lowest property taxes in Kentucky. Again, remember that there are also many unincorporated communities in these 16 counties.

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