Covington officials just cut the city’s property tax to its lowest rate in decades, but some homeowners will still see a higher tax bill this year.
Mayor Joe Meyer says that’s because property values increased dramatically in the last year.
“If the value of a person's home has not increased, or has increased just a little bit, they will be paying significantly lower taxes than they were the year before,” Meyer said. “If their assessed value increased significantly, they could wind up paying more than they did last year. But it would still be less than it would have been if the rate had stayed the same.”
Covington’s property tax rate was level for five years before this change. The new annual rate is $271 per $100,000 in home value, about $56 lower than last year.
“Generally speaking, people who live in modest homes that haven't appreciated in value a whole lot will be getting a tax break,” Meyer said. “And those are the people who would probably benefit most from the tax reduction. It's more money they can keep in their pocket to spend on other things for their lives.”
The city’s overall assessment rose to $3.85 billion, an increase of about $650 million over last year. That’s the largest increase in at least two decades, according to the city’s finance director.
Meyer says the jump is thanks to a couple different factors: new construction, big increases in the housing market, and a reassessment of property values that happens every four years.
The decision to reduce the tax rate is partly based on Kentucky law, which says local government rates can generate no more than 4% additional revenue than the year before.
“So there's a cap — a very effective cap — on how much Kentucky's real estate property can increase without being subject to a recall referendum,” Meyer said.
Tax bills go out Sept. 15.
