01/14/2026
Very important information for all homeowners to keep an eye on 👁️
LEGISLATURE CONSIDERS UPDATING THE HOMESTEAD EXEMPTION
UPDATE: SB51 received a favorable vote in the State & Local Government Committee to advance in the state senate.
Kentucky’s Homestead Exemption (“HEX”) needs an update. The exemption reduces the taxable value of the primary residence for seniors and the disabled by a fixed dollar amount that is adjusted every two years based on the consumer price index. Unfortunately, the consumer price index has not kept pace with the inflated housing prices seen across the country over the past few decades. I estimate the value of the HEX, as a percentage of your home's value, in only half what it was when introduced in 1972.
Several bills have been introduced in Frankfort again this year, the first of which will receive public discussion before the Senate’s State & Local Government Committee Wednesday morning at 11am. Here is the link to watch a live stream:
https://ket.org/live/
For the most part, legislative fixes for the HEX fall into one of two categories: 1.) Reset the dollar amount of exemption (currently at $49,100) or 2.) freeze the assessments for HEX recipients at their current levels or for future recipients, freeze the assessed value at the time the HEX is awarded.
The most significant consideration regarding the various approaches is their immediate and future impacts on the various taxing districts (local and state governments, schools and first responders) and the taxpayers in general. A freeze would have little immediate impact but rather would just limit increases in the overall tax roll going forward and likely causing tax rates to increase more than they would otherwise. But, increasing the amount of the HEX would likely cause an immediate drop in the tax roll causing tax rates to increase across the board to compensate and keep taxing districts not only whole but allow for a 4% increase which is baked into our property tax laws. One bill proposes to increase the exemption from it’s current $49,100 to $100,000 potentially doubling the cost of the HEX to the taxpayers – all at once. Obviously, both approaches have plusses and minuses and deserve significant attention by the legislators.
I will closely follow Homestead Exemption legislation and provide updates here when warranted.