Lexington, August 14, 2025
News Summary
The Lexington-Fayette Urban County Council has voted to reduce the property tax rate from 0.076% to 0.075%, despite a 4% increase in revenue for the upcoming fiscal year. Homeowners may not see a decrease in their overall tax bills due to rising property values. With the average home price at $260,000, the new tax rate will result in an average tax payment of approximately $195. The council’s decision reflects a balance between fiscal responsibility and the realities facing homeowners in Lexington.
Lexington – The Lexington-Fayette Urban County Council has voted to lower the property tax rate slightly, despite generating a 4% increase in revenue for the upcoming fiscal year. The council’s decision, made during a recent work session, will reduce the tax rate from .076% to .075% (7.5 cents per $100 of assessed property). However, homeowners may not see a decrease in their overall property tax bills due to increased property values and the addition of new properties to the tax rolls.
Currently, homeowners in Fayette County are facing an average home price of $260,000, leading to an average tax payment of $197.60 to the general fund of the merged government. With the adjusted tax rate, a homeowner with a property valued at $260,000 will pay approximately $195 in taxes for the next fiscal year.
The property tax bills encompass various entities, making the merged government’s share only about 6% of a homeowner’s total tax payment. The majority of property tax revenue, over 64%, goes to the Fayette County Public School system, which is slated to set its property tax rate later this month. Homeowners also contribute to local services such as waste pickup, street lights, and street cleaning through separate charges, averaging around $455, expected to decrease to $449.80 with the new tax rates.
The newly calculated tax rate’s impact on the general fund, which funds critical services like police and fire departments, coupled with the separate costs for city services, illustrates the complexity of property taxes in Lexington. The council’s vote reflects an effort to balance fiscal responsibility while responding to the changing real estate landscape in the area.
An important aspect to consider is that no objections were reported regarding the proposed tax rate during the meeting. The council is scheduled to hold a public hearing and take a final vote on the new tax rate on August 28. While the property tax burden may vary depending on the urban service districts and individual property values, the adjustments aim to maintain essential services while also adjusting to the financial realities facing residents.
Breakdown of Property Taxes for a $260,000 Home
- State: 9.1%
- Fayette County Public Schools: 64.1%
- Lextran: 4.7%
- LFUCG General: 6.1%
- Waste collection: 11%
- Street lights: 2%
- Street cleaning: 0.7%
- Fayette County Extension Service: 0.3%
- Fayette County Soil and Water District: 0.1%
- Lexington-Fayette County Health Department: 1.9%
The total annual property tax bill for this average home amounts to approximately $3,271.58, demonstrating the burdens property taxes impose on homeowners. As the city prepares for the fiscal adjustments ahead, the council’s actions represent an ongoing commitment to address rising property values while aiming to ensure that essential public services continue to be funded adequately.
Frequently Asked Questions (FAQ)
What was the tax rate before the reduction?
The tax rate was .076% (7.6 cents per $100 of assessed property) before it was reduced to .075% (7.5 cents).
How much will a homeowner with a $260,000 house pay in taxes next year?
A homeowner with a $260,000 property will pay approximately $195 in taxes to the merged government’s general fund next year.
How does the property tax revenue get allocated?
Over 64% of the property tax revenue goes to the Fayette County Public School system, with other allocations to city services and state funding.
When will the final vote on the tax rate take place?
The council will hold a public hearing and take a final vote on the new tax rate on August 28.
Key Features of the Property Tax Rate Changes
| Feature | Current Rate | New Rate |
|---|---|---|
| Tax Rate | 0.076 (7.6 cents per $100) | 0.075 (7.5 cents per $100) |
| Average Tax Payment for $260,000 Home | $197.60 | $195 |
| Average City Services Payment | $455 | $449.80 |
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Additional Resources
- Kentucky.com: Fayette County Property Tax Changes
- WLTX: Lexington City Council Retains Flat Property Tax Rate
- The State: Property Tax Impacts on Homeowners
- Wikipedia: Property Tax
- Lexington Progress: Mayor Presents Budget Without Tax Rate Increase
Author: STAFF HERE LEXINGTON KY STAFF
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