Kentucky Real Estate Transfer Taxes: An In-Depth Guide (2024 Update)

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By Jon Stubbs Updated March 19, 2024


Who pays transfer taxes? | When are transfer taxes paid? | Methodology

Kentucky's current transfer tax rate is $0.50 per $500. So, for a house worth $196,550 — the median home price in the state — the transfer tax due will be $197. It doesn’t stop there, however, as cities within the state may charge an additional fee on top of the standard rate, which can cause your total dues to increase.

The specifics on who pays the transfer tax in Kentucky are sometimes up for negotiation, but usually the seller is responsible.

Clever Real Estate can help you cut costs here — our concierge team will partner you with an experienced agent who can help you negotiate a good deal with your buyer on transfer taxes. Not to mention, you'll save big by paying only 1.5% in commission.

💰 Find an agent who can negotiate your transfer taxes

You can't change transfer tax rates. But, an experienced Clever Real Estate agent can help you win the negotiation battle so you aren't stuck paying all of the transfer taxes on your own.

When you choose Clever, you'll work with a full-service realtor with transfer tax expertise in your local market.

Clever's service is totally free, with zero obligation — you can walk away at any time.

Who pays transfer taxes in Kentucky: The buyer or the seller?

In Kentucky, usually, the seller is responsible for paying the transfer tax.

There are some circumstances where the buyer might pay the transfer tax. If the buyer and seller are up for negotiating terms during the selling and buying process, you can ask that the buyer pays a portion or all of the transfer tax.

How Much Are Transfer Taxes in Kentucky?

When ownership in Kentucky is transferred, an excise tax of $.50 for each $500 of value or fraction thereof, is levied on the value of the property. For example, the sale of a $200,000 home would require a $200 transfer tax to be paid. Keep in mind, a deed cannot be recorded unless the real estate transfer tax has been collected. However, if the deed is a gift or indicates nominal consideration, the tax is paid on the estimated price the property would bring in an open market. The tax is also paid in the county in which the house is being bought or sold.

There are circumstances where there is no transfer tax needed. Some of these are deeds of gift, foreclosure deeds, deeds from local, state, or federal government, and certain leases with a term of fewer than 10 years.

Can You Deduct Transfer Taxes?

It's understandable that we want to look for ways to make tax deductions. As hard working people, we want to keep as much of our income as possible. While there are many things homeowners can do to maximize their tax deductions, such as utilizing property taxes, transfer taxes is not one of them. Transfer taxes are needed to legally impose a transfer of real estate. In some situations, they can be deducted as a work expense if the property is being used as a rental home or real estate investment.

Transfer taxes become part of the cost basis of the property, which is used to calculate the final gain on sale if the property is sold. The amount you spent on the transfer tax can be taken from your profit so that your capital gains tax bill can be reduced.

The good news is that you won't even need to make this reduction if you owned the home for more than two years. A married couple who lived in the house for two of the last five years could exclude $500,000 of capital gains.

When do you pay transfer taxes in Kentucky?

Transfer taxes are paid at the closing of a deal, and in most cases are paid by the seller. So, when filing taxes, sellers should be sure to deduct the transfer tax from their capital gain.

This is especially important because capital gains tax is paid to the federal government and the transfer tax is paid to the state government. So, chances are, you'll be paying both these taxes separately, and at different times.

Other Considerations

Learning all about taxes and fees isn't typically the first item on someone's list of things to learn about. Especially since many people will only go through the closing process on a home a minimal amount of times in their life. This is obviously why most buyers and sellers don't have all the closing costs and transfer taxes memorized.

When it's time for you to learn about taxes and closing costs, it's easier to speak to a professional face to face and take the time to explain it. This is where Clever Partner Agents in Kentucky come into the equation. They are educated and trained real estate professionals whose job is to assist you during the buying and selling process of your home.

We’ll partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the state average of 3.00%! The money you'll save can more than offset the cost of the transfer taxes.

» SAVE: Learn more about how a Clever agent can help you navigate Kentucky transfer taxes


  • Transfer tax amounts are based on government website information as of February 2024.
  • We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
  • Home values, list prices, and sale prices are based on Zillow data as of February 2024.

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