A proposed constitutional amendment that would freeze property tax assessments for 65-and-older residents in Kentucky has cleared a state Senate committee — one of several efforts to limit rising tax bills for elderly homeowners.
Senate Bill 51, sponsored by state Sen. Mike Nemes (R-Shepherdsville), would lock in the assessed value of a senior’s primary residence and prevent higher property tax bills driven by valuation increases.
Seniors would still pay property taxes but on the home’s frozen value.
If approved by three-fifths of both chambers of the Kentucky General Assembly, the measure would go before voters in November as a constitutional amendment.
“As we know, the assessments have been going up on them, and a lot of people are having income problems on fixed income,” Nemes told Louisville Public Media last month. “We need to help them.”
Under the proposal, a home assessed at $200,000 that later rises to $300,000 in value would still be taxed at the original $200,000 assessment.
State Sen. Cassie Chambers Armstrong (D-Louisville) voted for the measure, citing the need for relief for low-income seniors.
She said she would prefer a means test so that the policy does not apply to wealthier homeowners, suggesting it not extend to homes valued above $1 million or $2 million.
Nemes said a legislative fiscal note estimates the proposal would reduce state revenue by about $5.5 million annually.
Local governments — which rely heavily on property taxes and set their own rates — have not yet received a formal impact statement, Louisville Public Media added.
“We’ve helped the working-class people with the income tax,” Nemes said. “Well, these elderly people have paid income tax all these years, and now they’re not paying income tax. We need to help them also.”
Five related bills have been introduced in the Kentucky House, including a measure by Rep. Daniel Grossberg (D-Louisville) that would cap the exemption on homes valued at $500,000. Other Republican-backed bills would increase the existing homestead exemption from about $49,000 to as much as $75,000 or $100,000.
Policy group warns of broader impact
The Kentucky Center for Economic Policy, a nonpartisan research organization, cautioned that broad changes to property taxes could strain funding for schools and local services.
In 2023, Kentucky collected $4.94 billion in property taxes on real estate, vehicles, boats, airplanes and business equipment — with most revenue coming from real estate. Nearly half of real estate property tax revenue in the state goes to schools.
Property taxes provide 72% of local school district revenue and 24% of total school funding statewide. They also account for nearly 35% of county revenue and 23% of locally generated city tax revenue, according to the organization.
“The property tax is a critical component of a diverse, resilient tax system because it adds stability to revenues,” the center wrote. “Capping, freezing or even eliminating property tax for broad groups of individuals, as some are proposing, disproportionately benefits the wealthy and harms Kentucky communities because it serves as the primary source of revenue for so many local services.
“The property tax can be modified in ways that would make it fairer, but it should be protected as a vital revenue source.”
There are 445 special taxing districts statewide — many of which rely primarily or entirely on property taxes — funding services such as fire protection, libraries, ambulance services, soil conservation and public health.
The current homestead exemption for seniors and people with disabilities is $49,100 in 2026, adjusted every two years for inflation.
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