Older Kentuckians who own their home could see future property tax savings under a constitutional amendment proposed Monday in the Kentucky Senate.
The savings would come from expanding the state’s homestead exemption, a statutory tax break for Kentuckians 65 and older that exempts a set amount of a home’s value from the property tax rolls. The exemption is currently set at a maximum of $46,350. The proposed amendment would freeze the home’s taxable value, exempting it from future increases.
Kentuckians who have the exemption would see tax savings in future tax years if the amendment in Senate Bill 23 gets House approval this session and voter approval this November. The bill cleared the Senate on a bipartisan vote of 32-2, with one pass vote.
The question asked of voters in the proposed amendment would be: “Are you in favor of providing an additional ad valorem tax exemption for real property maintained as the permanent residence of an owner who is 65 years of age or older by amending the Constitution of Kentucky to read as stated below?” The new constitutional language would also be on the ballot.
Kentuckians age 65 and older or classified as totally disabled must own and occupy their home to qualify for a homestead exemption under Kentucky law.
Sen. Michael Nemes (R-Shepherdsville) is the sponsor of SB 23. He told the Senate Monday that older Kentuckians have a growing property tax burden the amendment would relieve going forward.
A homeowner “will still pay the property taxes when he turns 65 or when he purchases the house, but not additional on the assessment,” Nemes said.
All but two Republican senators voted in favor of SB 23. One of the two voting against the bill was Sen. Stephen West (R-Paris), who cited concerns with how the proposed amendment could impact schools and other public institutions.
“A lot of these local taxes go to support our schools and libraries, and so for that reason, although I respect the sponsor’s intent, I personally vote no today,” West said.
The only pass vote was from Sen. Karen Berg, a Louisville Democrat who said she can’t vote for an amendment that would benefit her financially when she turns 65.
In response to Berg’s comments, Senate Majority Floor Leader Damon Thayer (R-Georgetown) said that no senator is precluded from voting for the bill by virtue of their elected office.
“The only reason under the ethics law and the constitution whereby we would be compelled to not vote is if the bill was just affecting us, and one of us alone,” Thayer said. “That is the reason why teachers can vote on education bills and lawyers can vote on bills related to the court system, and we can go on and on. We are actually expected to vote on behalf of our constituents on all matters that come before us.”
Current state law requires the state’s homestead exemption amount to be adjusted for inflation every two years. The current exemption, set in 2022, is $5,850 more than the prior exemption, according to state revenue officials.
The 2022 tax year exemption provided approximately $258 million in savings for more than 468,000 Kentuckians, according to the state revenue department.
Gov. Andy Beshear praised the current exemption as “an important way we can help protect the homes of our seniors and other vulnerable Kentuckians” in a 2022 revenue department press release.
Kentuckians age 65 or older or who are classified as totally disabled by a public or private pension system must apply to the state in order to be considered for a homestead exemption. Applications must be submitted to the homeowner’s local property valuation administrator office by Dec. 31 of the eligible tax year to qualify for that year’s exemption.
The application, available on the state revenue department website, can be accessed here.