- Boone County Fiscal Court votes to lower real property tax rate to 8.5 cents per $100 valuation.
- County property tax rates have declined annually since 2014.
- Officials say the cut balances taxpayer relief with maintaining county services.
Boone County residents will see another reduction in the property taxes this year.
On Aug. 19, the Boone County Fiscal Court voted unanimously to reduce the county’s real property tax rate to 8.5 cents per $100 of assessed value–down from last year’s 9.2 cents. This means that a Boone County homeowner with a house valued at $300,000 would pay only $255 on their property tax bill.
Meanwhile, the county’s personal property tax rate will be 9.5 cents per $100 valuation, while its motor vehicle tax rate will be 14.2 cents per $100 valuation.
Boone County’s property tax rates have steadily declined year over year since 2014, when the rate was 10.5 cents.
“I’m pleased that it’s seven tenths (of a tax cut),” Boone County Judge/Executive Gary Moore said. “I think that is a substantial reduction in the rate and something that our taxpayers deserve.”
Property values, including residential valuations, are set by the county’s Property Valuation Administrator, or PVA, who is an elected official. The PVA’s office, based in the Boone County Administrative Building in Burlington, is not a county employee office but operates under the Kentucky Department of Revenue.
The Kentucky Department of Revenue defines real property as land and any permanently attached structures. Tangible personal property is considered physical and taxable items such as manufacturing machinery, artwork, antiques, coin collections, and construction equipment. Registered cars and watercraft are not classified as tangible personal property.
A compensating tax rate is the rate a taxing authority needs to set to generate the same revenue from real property as it did the previous year. The rate may be higher or lower than the previous year, depending on changes in property valuations. In Kentucky, calculations for the compensating rate do not include valuations for new properties within a jurisdiction.
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
How do property taxes work?
Boone County Administrator Matthew Webster explained the county’s rationale while presenting to the fiscal court.
“We believe one of the charges that we’ve had over the last year or two is to move our tax rates as low as we can be, to give as much relief to the taxpayers as possible, without sacrificing services. We believe that this is kind of right in that wheelhouse,” he said.
Webster explained that the process of setting rates starts with independent evaluations by the Property Valuation Administrator, then proceeds to certification by the Kentucky Department of Local Government, which determines the compensating rate and the 4% growth rate.
Based on data from Boone County, the county’s real property values increased by 4.75% year over year to $18.6 billion, while personal property values dropped 9.5%, from $4.1 billion to $3.7 billion. Overall, Boone County’s total property valuations increased nearly 2%, providing the county with an opportunity to lower the property tax rate while still meeting revenue goals.
Boone County Commissioner Jesse Brewer told LINK nky that reducing the property tax rate helps residents save money, while enabling the county to continue funding parks, public safety and infrastructure.
“We are able to lower our property tax rates without sacrificing any services or quality,” Brewer said.
Near the end of the discussion, Moore, once again, addressed calls for a consumption tax to replace property taxes. Moore explained that Kentucky’s Constitution prohibits imposing a local sales tax without a constitutional amendment approved by voters.
“I just wanted to explain why we’re not discussing sales tax,” Moore said. “It would be a preferred model. We’ve talked about that for many, many years, but we can’t do it, so the tools we have before us now are what we’re discussing.”
