Louisville Metro Council is expected to tweak property tax rates for residents at its meeting on Thursday.
They’re expected to approve an ordinance lowering the rate for residents in suburban Jefferson County, while increasing the property tax rate for those living in the old city limits or what’s called the Urban Services District. Because those living in the old city also pay the county-wide tax, officials say the changes will result in a net rate decrease for everyone.
The county-wide property tax rate will decrease from 12.89 cents per $100 of assessed value to 12.40 cents, or a savings of $4.90 for someone with a home worth $100,000. The rate for residents in the urban core will increase slightly from 35.46 cents per $100 of assessed value to 35.80 cents, or about $3.40 on a $100,000 home.
Residents pay property taxes once a year.
District 9 Metro Council Member Bill Hollander, a Democrat who is the chair of the Budget Committee, said the city has to make changes to the rate every year to comply with a state law that limits local governments from collecting more than 4% in additional property tax revenue. That means that when home values rise in an area, the tax rate has to drop to avoid pushing revenue above that threshold.
“This year, the assessments were principally outside of the urban services district,” Hollander said. “In some years, they’ve been inside the urban services district. I live in the USD. My reassessment was a couple years ago, and [my home value] increased substantially.”
Residents living inside the limits of the old City of Louisville pay both the county-wide and urban services district property tax because they get more services from Metro Government, including fire protection, trash pickup and street lighting.
Louisville Metro’s Chief Financial Officer, Monica Harmon, said in a recent statement that the city’s economic rebound from the COVID-19 pandemic, coupled with high demand for real estate, contributed to the increase in residents’ assessed home values. Income from property taxes accounts for roughly a quarter of the city’s annual budget.
Business owners in Jefferson County also pay a personal property tax on things like office equipment, machinery and raw materials. The tax rate for those items is also set to decrease, regardless of where a business is located. The county-wide rate will go from 16.60 per $100 of assessed value to 16.41 cents, while the USD rate will decrease from 56.60 cents per $100 of assessed value to 56.00 cents.
The Jefferson County Board of Education, which oversees the school district, voted last week in favor of cutting their own property tax rate for homeowners. The new rate will be 76.3 cents per $100 dollars of assessed value, down from the previous year’s rate of 79.6-cent.
Property tax bills will be issued by the Jefferson County Sheriff’s Department in November.