When it comes to moving to a new city there are certain things that everyone must consider. Home values, neighborhoods, and school districts are just a few of these factors, but what about property taxes. Property taxes are a harsh reality that any homeowner must deal with every year and knowing what type of taxes and what tax rates you may run into can truly help make your home buying experience far easier and can prepare you for what’s to come. Lexington, KY has a few different tax districts and knowing about each may help you determine where you want to live within the city.
What Factors Make Up Property Taxes in Lexington, KY?
Instead of there being a set tax rate for everyone or a set rate that determines how much each district pays, the tax rate is instead made up of several different rates that have to do with public services and public properties. There is of course the state tax, this is going to be the same across the board for all residents of the state of Kentucky, and this rate is somewhat small at a rate of 0.122 per every $100 of value.
There is then the county rate which is going to be set for all residents of that county and those living in Fayette County where Lexington is located will be paying 0.08 per $100 of value. There is then school taxes at 0.74 per $100 of value, extension services at 0.0032 per $100 of value, soil and water conservation at 0.0005, health department at 0.028, and Lextran at 0.06.
There are then area or district specific taxes that affect the overall tax rate for each district. District 1 pays a full service tax of 0.1738, district 3 pays a refuse tax of 0.1431, district 4 pays a streetlight tax of 0.0210, district 5 pays a refuse and streetlight tax of 0.1641, District 6 pays a street lights and street cleaning tax of 0.0307, district 7 pays a refuse and street cleaning tax of 0.1528, and district 8 pays only a state tax of 0.0150. These districts therefore all have specific tax rates that can affect how much you pay in property taxes each year.
So What Tax Rate Does Each District Pay?
Since each district has a different tax rate, a home that is valued at one set price will incur different taxes in each district. District 1 pays a set tax rate of $1.2075 per every $100 of value. This means that a home that is valued at $125,000 will be taxed $1509.38. District 2 pays a tax of $1.0337 making the same house that is valued at $125,000 incur $1292.13 in taxes. District 3 pays a tax of $1.1768 per $100 of value making the home we have discussed cost about $1471.00 in taxes each year.
District 4 pays a tax of $1.0547 per $100 of value making taxes on a $125,000 home about $1318.38. District 5 pays taxes of $1.1978 making taxes on that same home about $1497.25. District 6 pays $1.0644 per $100 of value making taxes on our example home about $1330.50. District 7 pays $1.1865 making taxes on our $125,000 home around $1483.13. The last district would charge taxes of around $18.75 if a home were built in this area which is not likely.
Where Does Lexington Fall in Districts?
Sadly there is no one set area that Lexington falls into, instead, different parts of the city are covered by different taxing districts. This means that in order to know exactly how much your property taxes are going to be, you would need to pay close attention and find out what the actual district that you would be living in is. For a simpler way to get a basic idea, you can simply average the rates that we have already discussed together to get a better picture of average tax rates in Lexington and surrounding areas in Fayette county.
The average taxes that would be paid on a home that is valued at $125,000 would be about $1414.54. this is a pretty standard tax rate for the state of Kentucky, and since there are no hidden taxes to drive this number up, you are most likely safe using this as a jumping off point if you are considering purchasing a home in Lexington, KY and you want to know about tax rates.
What Are Tax Rates Across the State and Country?
Tax rates do fluctuate across the state and can affect your overall taxes. A great example is in a smaller town like Bardstown, KY. Tax rates in Bardstown are 0.918% so taxes on a $125,000 home would be around $1,143. Taxes in a larger city like Louisville would be around $1,393 with a 0.934% tax rate. Across the country these rates also change. Texas for example has a tax rate of almost 2% at 1.81% which means a $125,000 home would owe $2,262. Tax rates in New Hampshire, the highest in the country, are 1.86% and would incur a tax of nearly $3,000 for a $125,000 home. These rates are all something you should pay attention to when buying your home.
What Do Property Taxes Actually Do?
For many, it seems silly that you have to pay for your home via mortgage payments every month, and you also have to pay property taxes at the end of each year. It is helpful however to understand just what your property taxes are being spent on every year to help soften the blow. For starters, property taxes are already allocated to a number of different causes before they are ever even collected, this is how your tax rate is determined.
Remember the breakdown from earlier? Well, things like refuse removal, street cleaning, schools, roads, and more are all being paid for out of your property taxes. Though it may seem unfair that you have to pay these taxes on top of all your other bills, this money is going to a great cause. In most cases, the money collected from property taxes goes to making your community a better, cleaner, and safer place to live so you are going to have great streets that are clean and streetlights that work and schools that are capable of teaching our children.
2 Point Highlight
Instead of there being a set tax rate for everyone or a set rate that determines how much each district pays, the tax rate is instead made up of several different rates that have to do with public services and public properties.
Property taxes are a harsh reality that any homeowner must deal with every year and knowing what type of taxes and what tax rates you may run into can truly help make your home buying experience far easier and can prepare you for what’s to come
