Every fall I get calls from homeowners who just opened their tax bill and want to know why their neighbor pays less. Usually the answer is the homestead exemption. Their neighbor turned 65 and filed for it, and they never did.
It’s one of the few property tax breaks in Kentucky that almost anyone gets eventually, and it isn’t automatic. You have to apply. Here’s how it works, who qualifies, and what it does to a mortgage payment, since that’s the part I deal with.
What the Kentucky homestead exemption is
The homestead exemption lowers the assessed value of your home before the tax rates are applied. For the 2025 and 2026 tax years the amount is $49,100. If the PVA has your house assessed at $250,000, you’re taxed as if it were worth $200,900.
The Department of Revenue resets the amount every two years to keep up with inflation. It was $46,350 for 2023 and 2024. The next figure, for 2027 and 2028, should be announced around the end of 2026, and I’ll update this post when it is.
Source: Kentucky Department of Revenue, 2025-2026 homestead exemption announcement.
Who qualifies
There are two ways in. You need one of them, plus the ownership rule.
- Age. You’re at least 65 at some point during the tax year. You don’t have to be 65 on January 1. If you turn 65 in November 2026, you qualify for 2026.
- Total disability. You’ve been classified as totally disabled under a federal government program or a retirement system, and you’ve received disability payments for the entire assessment period.
- Ownership and occupancy. You own the home and live in it as your primary residence on January 1 of the tax year.
The January 1 rule trips up buyers. If you’re 70 and close on a house in Louisville in May, you don’t get the exemption on that house for the current year. You apply for the next one.
A household gets one exemption. If you qualify for both age and disability, you don’t get to stack them. The amount is the same either way.
Reapplying when you qualify through disability
If you qualify through disability, you generally have to reapply every year. According to the Department of Revenue, three groups don’t:
- Veterans with a service-connected disability
- People determined totally and permanently disabled under Social Security Administration rules
- People determined totally and permanently disabled under Kentucky Retirement Systems rules
Your county PVA can tell you which documents they need and whether you’ll have to renew.
If you’re a veteran shopping for a house, my page on VA loans in Kentucky covers the loan side. The VA funding fee has its own eligibility rules, separate from the property tax exemption.
What it saves in Louisville
The savings depend on your tax rate, and in Jefferson County that depends on where you live. Every house pays the state, Metro and school rates. Inside the old city limits you also pay the Urban Services District rate. Outside it, you pay a fire district rate instead.
Here’s what $49,100 comes to under the 2025 rates on the Jefferson County PVA tax rate schedule:
Computed as $49,100 ÷ 100 × the combined rate (state 0.106 + Metro 0.118 + school 0.717, plus the USD or fire district rate) from the 2025 Jefferson County PVA tax rate schedule. Small cities inside the county can add their own tax, so your bill may have other lines. Illustrative, not a tax estimate.
So for most Louisville homeowners it’s somewhere around $500 to $620 a year. That’s $40 to $50 a month, which matters a lot more on a fixed income than it sounds like on paper.
How to apply in Jefferson County
You file with the Property Valuation Administrator in the county where the house is. In Louisville that’s the Jefferson County PVA, and the process is short:
- Fill out the homestead application. You can do it online through the Jefferson County PVA, or mail it to Jefferson County PVA, Attn: Homestead, 815 W. Market Street, Suite 400, Louisville, KY 40202.
- Include a copy of a valid Jefferson County driver’s license, REAL ID, or Jefferson County ID.
- Get it in by December 31 of the tax year you’re claiming.
If you’re approved through age, you don’t have to reapply every year. You do have to file again if you move, because the exemption belongs to the house you live in, not to you. Outside Jefferson County it works the same way through your own county’s PVA. The Department of Revenue says you can file online, by mail, or in person.
One thing people mix up: this is the property tax homestead exemption. Kentucky also has a homestead exemption that protects some home equity from creditors in bankruptcy. They share a name, but they’re two separate laws.
What it does to your mortgage payment
If you have a mortgage with an escrow account, your lender pays the tax bill out of that account and sets your monthly payment to cover it. A lower tax bill lowers the tax part of that payment, but not right away.
Your servicer looks at the escrow account once a year. The lower tax bill can reduce the tax portion of your escrow payment at the next review. Your total payment may still change because of homeowners insurance costs or an existing escrow shortage. If that review shows a surplus of $50 or more and you’re current on the loan, federal rules require the servicer to refund it within 30 days of the review. If you got the exemption and your payment didn’t move at the next review, call your servicer and ask them to rerun the escrow analysis with the new bill.
If you’re buying from someone who had the exemption
This one is on the buyer side, and it catches people. Say you’re 40 and buying a house from a 75-year-old seller. The most recent tax bill on that house has the seller’s exemption on it. You don’t qualify, so your first full tax bill will be higher, by $500 or more in Louisville.
A tax estimate based on the seller’s exemption can understate what you’ll pay if you don’t qualify for it. On a purchase, I base the tax estimate on your eligibility, not on the seller’s bill. Taxes and homeowners insurance can still change after closing. You can try a payment estimate with taxes included on my Kentucky mortgage calculator.
If you’re 65 or older and thinking about refinancing
If you’re considering refinancing in Louisville, check whether you qualify for the exemption and whether it shows up in your tax estimate. I can compare refinance options using your current mortgage details and an updated estimate of taxes and insurance. Your county PVA can explain the application and when an approved exemption takes effect.
Quick answers
How much is the homestead exemption in Kentucky? $49,100 off your assessed value for the 2025 and 2026 tax years.
Do I have to reapply every year? Once you’re approved based on age, you generally don’t reapply. Disability-based exemptions usually renew every year, with exceptions for service-connected veterans and people found totally and permanently disabled under Social Security or Kentucky Retirement Systems rules. Either way, tell the PVA if you move.
Is there an income limit? No. It’s based on age or disability, plus owning and living in the home.
Can I get it on a rental or a second home? No. It only applies to the home you own and live in as your primary residence.
Who do I call with questions about my application? Your county PVA. In Louisville that’s the Jefferson County PVA. If your question is about your escrow or your payment, call me at (502) 457-6615 and I’ll look at it with you.