Kentucky transfer tax is:
Question & Answer
Review the question and all answer choices
No transfer tax
Kentucky does in fact impose a real estate transfer tax under KRS 142.050, so the statement that there is 'no transfer tax' is factually incorrect — this answer would describe states like Texas, which genuinely has no state-level real estate transfer tax.
$0.50 per $500 of value
1% of sale price
A 1% of sale price transfer tax would be significantly higher than Kentucky's actual rate and would describe a structure used in other states; applying this rate to a $250,000 Kentucky sale would incorrectly calculate a $2,500 tax instead of the correct $250, a tenfold error that would dramatically miscalculate seller net proceeds.
Flat $100
A flat $100 transfer tax would be a fixed fee structure regardless of property value, which Kentucky does not use — Kentucky's tax is variable and scales proportionally with the consideration amount, ensuring that higher-value transactions generate proportionally more tax revenue.
Why is this correct?
Kentucky Revised Statutes Section 142.050 establishes the state's real estate transfer tax at $0.50 for each $500 of value or fraction thereof of the consideration paid for the transfer of real property. This rate has been in place for many years and is collected at the county clerk's office at the time of deed recordation. The tax is calculated on the full consideration amount, meaning a $250,000 sale would generate a transfer tax of $250 (500 units of $500 × $0.50 per unit).
Continue Learning
Explore this topic in different formats
More Transfer of Title Videos
Continue learning with related video lessons
Ready to Ace Your Real Estate Exam?
Access 2,000+ free video lessons covering all 11 exam topics.