Boone County has opted to lower its real property tax rate from the previous year.
At a meeting on Tuesday, the Boone County Fiscal Court voted 2 to 1 to lower the county’s real property tax rate from 9.6 cents to 9.2 cents per $100 valuation. The county’s personal property tax rate will be 8.9 cents per $100 valuation. The county’s compensating tax rate will also be 8.9 cents per $100 valuation.
Boone County estimates it will generate $16,373,893 from the new real property tax rate. in 2025. Additionally, Boone County expects to generate $15,839,961 from its new compensating tax rate and $3,731,104 for its personal property tax rate.
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?
The tax revenue received in excess from the preceding year is set to be allocated for public service delivery related to roads and infrastructure-related capital projects. This amount totals $607,558, according to county officials.
The Kentucky Department of Revenue defines real property as land and any permanent structures attached. Tangible personal property is defined as physical and taxable property like manufacturing machinery, artwork, antiques, coin collections and construction equipment. Registered cars and watercraft are excluded from qualifying as tangible personal property.
A compensating tax rate is the rate a taxing body needs to charge to bring in the same amount of revenue on real property as the previous year. The rate can be higher or lower than the prior year, depending on how much property valuations have changed. In Kentucky, compensating rate calculations do not include valuations for new properties in a jurisdiction.
Before the fiscal court’s vote, Boone County Judge/Executive Gary Moore called the rollback “substantial.”
“We are, once again, here in Boone County seeing the reduction of taxes, no matter which option is chosen,” he said.
Moore said Boone County was reducing its real property tax rate because the assessed value of property countywide has grown, so the county can cut the rate and still generate equal to or more revenue than the prior year.
Property values, such as residential valuations, are determined by the county’s Property Valuation Administrator, or PVA—an elected official. While the PVA’s office is located in the Boone County Administrative Building in Burlington, it is not an employee of the county but rather an office governed by the Kentucky Department of Revenue.
“I will say that the local PVA has a certain standard to maintain, as required by the Department of Revenue, and when a county PVA doesn’t assess at a level that the state revenue cabinet deems reasonable, they will force or demand that the PVA go back and reassess so they have some discretion,” Moore said. “People do have the opportunity to appeal if you feel like your assessment is too much, but that’s all set out in statute.”
Residential property values in Northern Kentucky have steadily risen since the pandemic. Home prices in Kentucky increased by 55.34% over the past five years, according to an August report published by the Federal Housing Finance Agency. Over the past year, Kentucky home prices increased by 6.03%.
Ultimately, Commissioners Cathy Flaig and Jesse Brewer voted to approve the measure, while Chet Hand voted against it.
As the lone ‘no’ vote, Hand explained that he heard from many constituents that they personally wanted “the lowest tax rate possible.” Furthermore, Hand said that property taxes are immoral and that the free market should determine property valuations.
“I made it pretty clear that my base position is I think property taxes should be zero,” Hand said. “I think they’re immoral at their core, and realistically, at the end of the day, if the state didn’t have property taxes, we would have no need for a PVA. Values would be driven by the market.”
Hand said he thought the county should go with “the lowest possible rate” and look to reduce spending in other areas. Hand said he believes the county should reduce the real property tax rate to lower than 9.2 cents per $100 valuation. He then suggested the county could eliminate property taxes in the future and instead implement countywide sales tax in addition to the state of Kentucky adopting a usage tax.
Moore said he prefers consumption taxes to property taxes but reminded the legislative body that counties in Kentucky do not currently have the power to levy sales taxes.
“Currently in Kentucky, cities and counties do not have the power to levy sales taxes, and it would take a constitutional amendment statewide by the legislature, and then a vote of the people that would allow cities and counties to be able to do a sales tax,” Moore said. “Right now, that’s not a tool in our toolbox.”
Brewer agreed with some of Hand’s rationale but said that the property tax rate reduction is a correct step in the immediate term.
“There’s a lot of things that we need to do that we don’t have the funding for, and these are the kind of steps that we had to take until the state does something different for us to make that happen,” Brewer said.
