Kentucky · Real Estate Property Taxes
Real Estate Property Taxes in Kentucky (2026)
Real estate property taxes are deductible when itemizing, subject to the combined SALT cap ($40,400 for most filers, $20,200 married filing separately). Kentucky has a flat 3.5% income tax, so a Kentucky filer's combined marginal rate on the next dollar at $55,573 of income is about 15.5% (12% federal + 3.5% KY).
2026 savings example for Kentucky
Planning estimate for a single filer earning $55,573 (Kentucky median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; KY tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$775
Federal savings
$600
$4,489 → $3,889 · 12% bracket
KY state savings
$175
$1,827 → $1,652 · 3.5% marginal
Combined marginal rate
15.5%
≈ $155 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $40,400.
Federal × Kentucky marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The KY column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | KY marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 3.5% | 13.5% | $135 |
| 12% | $28,500 - $66,500 | 3.5% | 15.5% | $155 |
| 22% | $66,500 - $121,800 | 3.5% | 25.5% | $255 |
| 24% | $121,800 - $217,875 | 3.5% | 27.5% | $275 |
| 32% | $217,875 - $272,325 | 3.5% | 35.5% | $355 |
| 35% | $272,325 - $656,700 | 3.5% | 38.5% | $385 |
| 37% | Over $656,700 | 3.5% | 40.5% | $405 |
Eligibility & forms
Available to homeowners who itemize deductions and pay property taxes on real estate they own.
- Must itemize deductions
- Taxes must be on property you own
- Must be imposed uniformly on all properties in the jurisdiction
- Combined state/local/property tax deduction generally limited to $40,400 ($20,200 if MFS)
Federal forms: Schedule A
Kentucky filing notes
Flat 3.5% simplifies planning. Be aware of inheritance tax for non-immediate family. Kentucky offers pension exclusions up to $31,110. Standard deduction is low ($3,360).
Common mistakes: Exceeding the SALT cap; Deducting taxes on property not owned by you; Double-counting taxes paid through escrow; Including special assessments that increase property value.
Frequently asked questions
How much can the Real Estate Property Taxes save a Kentucky taxpayer in 2026?
In LevyIO's example, a single filer with $55,573 of income (the Kentucky median household income in our state dataset) who removes $5,000 from taxable income saves about $600 in 2026 federal tax (12% marginal bracket) plus about $175 in Kentucky tax (3.5% state marginal rate), roughly $775 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's KY bracket data, not a survey figure.
What is the Kentucky income tax rate for 2026?
Kentucky has a flat 3.5% income tax. The KY standard deduction in LevyIO's dataset is $3,360 single / $3,360 married. Flat 3.5% for 2026 (reduced in stages from 5%). Inheritance tax (4-16%). Pension exclusion up to $31,110.
Who qualifies for the Real Estate Property Taxes in Kentucky?
Available to homeowners who itemize deductions and pay property taxes on real estate they own.. The federal rules are the same in every state; the requirements are: Must itemize deductions; Taxes must be on property you own; Must be imposed uniformly on all properties in the jurisdiction; Combined state/local/property tax deduction generally limited to $40,400 ($20,200 if MFS). Kentucky filers should confirm on the KY return whether the state follows the federal treatment.
Which forms do I file to claim the Real Estate Property Taxes?
Federal: Schedule A. Kentucky: check the Kentucky Department of Revenue instructions for the matching state schedule. Common mistakes: Exceeding the SALT cap; Deducting taxes on property not owned by you; Double-counting taxes paid through escrow; Including special assessments that increase property value.
Real Estate Property Taxes in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.