Businesses and individuals owning real estate valued at $1,000,000 or more for tax purposes should act now to reduce their Kentucky real estate tax bill. Long-term lessees obligated to pay property taxes should also take action.
Although, in Kentucky, the County Sheriff sends out property tax bills for real property in the fall, the time to dispute “overvaluations” of real estate is the spring. The process is the same throughout Kentucky, whether your real estate is located in Jefferson County, Fayette County, Boone County or any other Kentucky County.
The statutory “inspection period” for disputing the tax values set by the County Property Valuation Administrator begins on the first Monday in May and lasts for thirteen days. So, this year, it begins no later than May 6, 2019, and ends on May 20, 2019. Appeals must be filed with the PVA before the end of the inspection period; otherwise, the right to appeal is lost. So, the sooner the better.
When the PVA reassesses real estate in the spring, the PVA sends the owner a notice to inform them of the reevaluation. The PVA generally does not send a notice when no change in value is made. Even so, an owner may dispute the value of their real estate, even if they do not receive a notice.
The savings can really add up. For example, in Jefferson County (Metro Louisville), a reduction of $100,000 in value will typically result in an annual decrease in real property tax of approximately $1,300, and a reduction of $1,000,000 in value will result in an annual tax decrease of $13,000. The results are similar in other Kentucky Counties like Fayette and Boone. A valuation which results from a contested assessment may continue for up to four years or more, thus, multiplying the tax savings.
Although many choose to represent themselves in disputing “overvaluations,” at the PVA, many pitfalls and traps exist for those unfamiliar with the process. The conference with the PVA is just the first step in a multi-step process, and failure to request or to go through any given step will preclude an appeal to the next required step, such as an appeal to the County Board of Assessment Appeals or to the Kentucky Claims Commission. Another consideration is getting off on the right foot, and experience helps in this regard. As such, it is generally more prudent to involve an attorney on the front end, who knows the process and property tax law.
If you receive a notice advising you or your business of the tax value of your real property, review it; if you do not receive a notice, take a look at your property tax bill from Fall 2018. Then, ask yourself if the property’s value for tax purposes is greater than the amount that you could get if you sold it – particularly given the overall state of the real estate market. If so, you should consider taking steps to reduce your 2019 real estate tax bill.
You cannot wait until the real estate tax bill comes out in the fall to protest the value. By that time, the value is set by law and it cannot be protested. Act now, before the inspection period closes.