UPDATED JUNE 2019
Deed Price Doesn't Necessarily Equal Value
As anyone who has purchased property in Kentucky knows, the consideration paid for the property and listed in the deed will almost certainly become the amount of the new property assessment. The Kentucky Claims Commission recently affirmed that “consideration” and “fair cash value” are not interchangeable. In Agree Hazard KY LLC v. Perry County PVA, Order No. K-25925 (May 22, 2019), the KCC adopted the portion of the hearing officer’s recommended order holding that, while the sale price for a property is “clearly evidence” of fair cash value, it is not necessarily determinative of valuation for property tax purposes. If the property owner can present evidence showing that the deed price should be disregarded, the KCC will reject an assessment based on the deed consideration.
While the KCC adopted the hearing officer’s recommended order with respect to the deed price, it rejected the hearing officer’s finding that the property in question should be valued using market sales and rents, and instead found that the leased fee should be valued using the actual contract rent.
Morgan Pottinger McGarvey
American Property Tax Counsel (APTC)