A residential property in Bowling Green, Kentucky has a fair cash value of $280,000. The local tax rate is $0.50 per $100 of assessed value. Kentucky law requires assessment at 100% of fair cash value. The owner qualifies for the senior homestead exemption under KRS 132.810, which reduces the assessed value by $40,500. What is the owner's annual property tax bill?
Correct Answer
A) $1,197.50
Step 1: Determine assessed value. Kentucky assesses at 100% of fair cash value, so assessed value = $280,000. Step 2: Apply the KRS 132.810 senior homestead exemption. Taxable assessed value = $280,000 − $40,500 = $239,500. Step 3: Calculate tax. Tax = ($239,500 ÷ $100) × $0.50 = 2,395 × $0.50 = $1,197.50. The annual property tax bill is $1,197.50.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
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