At their Sept. 9 city council meeting, Dayton city officials held a first reading of a proposed real property tax rate for fiscal year 2025-26.
The new rate of .398 per $100 of assessed value represents the compensating rate plus 2%, half of the increase allowed by Kentucky state statute.
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?
City Administrator Jay Fossett explained that state law allows for up to a 4% increase over the compensating rate, the amount that would bring in about the same income as the previous year. The additional 4% is designed to cover inflation costs from year to year. Most cities take that additional amount, he said.
“The last three or four years, we’ve done the 4%,” said Fosset. “This year, because of the financial situation, the city’s in good shape, we decided that we would just do 2%, and that way we would actually be able to reduce our city rate for another year, making it, I think, the lowest right we’ve had in 16 years.”
The city set a date of Sept. 30 for a special meeting of the council to hold a second reading and vote on the new tax rate. The special meeting will be held at 5:30 p.m. at the Dayton Community Center, 625 Second Avenue in Dayton.
Following that meeting, council will join Dayton Independent Schools at the district’s Administration Building (200 Clay Street) for another special meeting at 6 p.m. This will be a joint meeting to discuss projects and priorities for the coming year.