Homeowners in Louisville could see a slight drop in their property tax rate later this year.
Officials announced the proposed rate changes earlier this month, and Metro Council’s Budget Committee recommended adopting them last week. Louisville Metro has two different property tax rates: one for residents in the city, and another for all Jefferson County residents. Both are poised to go down this year.
In a statement, Louisville Mayor Greg Fischer said budget officials expect to collect $163 million in property taxes this year.
“Despite the impact of COVID-19, our economy is continuing its pre-virus momentum,” Fischer said. “A decrease in property tax rates is a tangible benefit for our citizens.”
City residents could see their tax rate drop by around 3.5%. That’s roughly $25 in savings on a home worth $200,000. The county-wide tax rate could also drop by about 1.5%, or about $2 in savings on a similarly priced home in one of Louisville’s suburban cities. Property taxes make up roughly 25% of the city’s budget.
Louisville Metro, like all local governments in Kentucky, cannot raise revenue from property taxes more than 4%, year-over-year. Under state law, they’re required to decrease the tax rate if they expect revenue to exceed 4%. Metro officials said the proposed changes are meant to ensure revenues remain within that limit.
At last week’s Budget Committee meeting, District 19 Council Member Anthony Piagentini, a Republican, presented numbers showing that the property tax rate for all Louisville residents has decreased in recent decades.
“It doesn’t mean you’re paying less in property taxes,” Piagentini said. “That’s dictated by the value of your property, which ostensibly should have been going up this whole time. But I just want to say that this constitutes a fairly significant decrease in the rate.”
Housing values in the United States started rising in 2012, with the pandemic causing them to shoot up even faster.
A public comment meeting on the proposed tax changes will be held Thursday at noon in Room 106 of Louisville Metro Hall. Metro Council is expected to take a final vote that night.