Covington’s real estate property tax rate will officially remain unchanged from last year. Additionally, the personal property tax rate has been lowered.
The Covington City Commission voted Tuesday to keep the real estate property tax rate at $0.277 per $100 of property valuation for the 2025 fiscal year, which runs through June 30. This move comes after city staff had recommended raising the rate in August to $0.286.
August’s proposal called for $0.286 for every $100 of assessed real property, which Finance Director Steve Webb estimated would add $9 a year onto the tax bill of a home worth $100,000.
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 personal property rate, on the other hand, has been lowered to $0.326 for every $100 of personal, or tangible, property from last year’s rate was $0.359. This is also lower than the city staff recommendation of $0.336.
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, generally refers to property that isn’t real estate. This mostly applies to businesses and includes machinery and other movable equipment and supplies.
The commission voted to amend the proposed tax ordinance at a special meeting last week, where Mayor Joe Meyer argued the increased revenue from the staff’s proposal would be “inconsequential” and that the city needed to balance its priorities in the face of the region’s anxieties about housing.
Additionally, Meyer said, the city was already bringing in more payroll tax than expected.
“So with this sort of increase in our payroll tax collections, I need to balance the equity between the amount of this small tax increase versus keeping the property tax rate at a time when a lot of people are struggling, at a time when we’re getting a lot of discussion about housing affordability and issues associated with it,” Meyer said, even if it meant the city “forego about $280,000.”
Covington property taxes were high in the 1970s—the real property tax rate was $0.78 in 1975—and began to decline in 1977. Rates fluctuated throughout the subsequent decades and most recently leveled off in fiscal year 2018 with a real property rate of $0.327 and a tangible rate of $0.349. Those rates persisted until fiscal year 2023.
The city is still in the throes of a deficit in its general fund, from which it draws most of its operations budget. The deficit comes from reduced payroll tax revenue from the city's largest employers, particularly Fidelity, which revised their tax withholding policies when employees (many of whom do not live in Covington) began to work more frequently from home during the pandemic.
Payroll taxes make up the lion's share of the city's tax revenue, and the city's elected officials hope to recover their revenue streams from potential payroll taxes generated from businesses at the Central Riverfront Development.