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Kentucky Property Tax Updates

UPDATED september 2023

Kentucky's New Affordable Multifamily Housing Law

Kentucky has enacted legislation designed to provide more certainty to assessments of affordable multifamily housing, though questions remain about the implementation and application of the law.

KRS 131.191(5) states that the value of multi-unit rental housing that is subject to government restriction on use may be determined in two ways.  The first is an income approach using actual income and stabilized expenses.  The capitalization rate is to be determined annually by the Department of Revenue, subject to specified parameters.  Second, the value may be determined by adjusting the unrestricted market value of the housing, based on a ratio of restricted rents to unrestricted rents.  The statute specifically prohibits income tax credits from being included in any determination of the property's income.

The law places new obligations on the taxpayer.  The property owner is required to notify the county property valuation administrator of any government restrictions on use, or if the property is no longer subject to those restrictions.  More importantly, the property owner will be required to file with the property valuation administrator the information necessary to value the property under the methods described above, meaning that the owner will be required to submit income and expense information and rental rates to the county. Failure to comply with these notification and reporting requirements could subject the property owner to a penalty not to exceed $200.

The Department of Revenue is tasked with promulgating the necessary regulations and forms to implement the new program.  To date, neither the regulations nor the forms have been published.

This email address is being protected from spambots. You need JavaScript enabled to view it.Morgan Pottinger McGarvey
American Property Tax Counsel (APTC)

Kansas Property Tax Updates
Louisiana Property Tax Updates

American Property Tax Counsel

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