The purpose of a property tax is to fairly distribute the necessary tax burden among all property owners based upon the market value of their property. Properties are appraised so that some of the costs associated with providing services, such as public education, fire and police protection, roads and utilities, can be allocated to property owners in proportion to the market value of their individual property.
Section 172 of the Constitution of Kentucky requires that all property be assessed for taxation at its fair cash value. The assessment date is January 1st of each year. Fair cash is defined as the price a piece of property would bring with a voluntary sale and a willing buyer and seller.
Market value is how much property would sell for, in an open market, under normal conditions. Before assessing any parcel of property, the assessor estimates its market value.
The centralized system for property tax assessments on motor vehicles is a piggyback program supported by the Automated Vehicle Information Systems (AVIS).
All real property commonly known as real estate is assessed. KRS.132.690 states that each parcel of taxable real property or interest there in subject to assessment by the property valuation administrator shall be assessed annually by the Property Valuation Administrator at its Fair Cash Value in accordance with standard prescribed by the Kentucky Revenue Cabinet.
Tangible personal property is physical property, usually movable, that has value and utility in and of itself. Examples: office equipment, trade tools, fixtures, inventory.