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January 27, 2022

See how low property taxes in Kentucky are

EQRoy // Shutterstock

See how low property taxes in Kentucky are

Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.

Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.

To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.

Kentucky by the numbers

– Effective real estate tax rate: 0.86%
– Annual taxes on $217.5k home: $1,866
– Kentucky’s median home value: $141,000
– Annual taxes on Kentucky’s median home: $1,210

Unlike many of the states on this list, the property tax in Kentucky is assessed on a state and local level. In many cases, having a state and local real estate tax to pay would increase the cost of real estate taxes overall for homeowners. That’s not the case for Kentucky, thanks to a unique state law that requires the state real property tax rate to be reduced anytime the statewide real property assessment total exceeds the previous year’s assessment totals by more than 4%. That law has been responsible for the state real property tax rate declining from 31.5 cents per $100 of assessed valuation to just 12.2 cents.

That said, each county in Kentucky determines what the property tax will be for the towns and cities within the county limits. However, most counties in the state are limited by law on the increases that can be made to property taxes each year—at least without either a public hearing or a recall petition—which helps to keep the overall tax rate low in the state.

In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.

If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state’s median home. Whether you’re looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.

States with the lowest property taxes

#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate

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