Louisville Metro Council approved a decrease in the property tax rates for Jefferson County residents Thursday night, meaning some homeowners could see a smaller bill this year.
Louisville Metro has two different property tax rates: one for residents in the city, and another for all Jefferson County residents. The tax rate for city residents will see their tax rate drop by around 3.5%, or roughly $25 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.
Budget Committee Chair Bill Hollander, a Democrat representing District 9, warned, however, that homeowners whose property values recently increased may not see any savings.
“For many people in the community, there will be a small tax reduction ‘cause their assessed value did not go up,” he said. “For people whose assessed value did go up, they may well be paying more, even though the tax rate fell.”
Housing values in the United States started rising in 2012, with the pandemic causing them to shoot up even faster. But Hollander said reassessments in Louisville are only done every few years, or when a home is sold.
In addition to rising home values, a recent vote by the Jefferson County Board of Education will also limit the potential savings homeowners can expect. Earlier this month, the board voted to increase its property tax rate by about 5% over last year. That’s about an $80 increase on a home worth $200,000.
Louisville Metro, like all local governments in Kentucky, cannot collect 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. Property taxes make up roughly 25% of the Metro budget.
Property tax bills will be issued by the Jefferson County Sheriff’s Department in November.