State sets homestead exemption limits for next two years

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FRANKFORT, Ky. (WTVQ) – The Kentucky Department of Revenue (DOR) has set the maximum homestead exemption on real estate owned by qualified individuals at $40,500 for the 2021 and 2022 tax periods.

By statute, the amount of the homestead exemption is recalculated every two years to adjust for inflation. The 2021-2022 exemption reflects a $1,200 increase over the 2019-2020 exemption of $39,300.

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To qualify for the homestead exemption, a person must be at least 65 years old during the tax period or have been classified as totally disabled by any public or private retirement system.

The property must also be owned, occupied and maintained by the taxpayer as a personal residence on the Jan. 1 assessment date.

“The homestead exemption entitles eligible Kentucky homeowners to a deduction off their propertys assessed value, which may result in hundreds of dollars in tax savings,” said DOR commissioner Tom Miller. “By deducting the exemption amount from the assessed value of the applicant’s home, property taxes are calculated based upon the lesser remaining assessment, reducing the property tax liability of the eligible homeowner.”

The amount of the homestead exemption is adjusted biennially in accordance with KRS 132.810 to compensate for changes in the purchasing power of the dollar.

During the 2020 tax year, the exemption provided state and local property tax savings of approximately $248 million for more than 460,000 elderly or disabled Kentuckians.

An application for the homestead exemption is available here.

This application must be completed and submitted to the property owners local Property Valuation Administrators (PVA) office no later than Dec. 31 of the eligible tax year.

The application can be submitted online, by mail or in person.

Eligible property owners should contact their PVAs office to learn the best application method to use for local submission.