If you sell a house in Kentucky, there is a state tax on the deed. Most people hear about it for the first time at the closing table. So here is the whole thing in plain English, with the math.
The Kentucky real estate transfer tax is fifty cents for every $500 of the price written in the deed. The seller pays it. That works out to $1 for every $1,000, so on a $285,000 sale the tax is $285.
Where the rule comes from
The rule is in Kentucky Revised Statutes (KRS) section 142.050. A tax is placed on the person selling, called the grantor, for the privilege of transferring title. The rate is $0.50 for each $500 of value, or fraction of $500, declared in the deed.
The words "or fraction" matter. The tax is figured in $500 steps, and any leftover amount counts as a full step. Here is the formula: divide the price by $500, round up to the next whole number, then multiply by fifty cents.
What it costs at different prices
Sale price | Transfer tax |
|---|---|
$150,000 | $150.00 |
$200,000 | $200.00 |
$285,000 (about the Louisville median) | $285.00 |
$285,100 | $285.50 |
$350,000 | $350.00 |
$500,000 | $500.00 |
$750,000 | $750.00 |
The $285,000 row uses the September 2026 median sold price for single-family homes in Jefferson County. See the details in What Is the Median Home Price in Louisville? The $285,100 row shows the "fraction" rule: that extra $100 counts as one more $500 step, so the tax goes up fifty cents.
Who pays and when
The seller pays. It is collected by the county clerk when the deed is recorded, and the clerk cannot record the deed until the tax is paid. In a normal sale you never write a separate check for it, because the closing company collects it from the seller's proceeds and pays the clerk.
The tax is collected once per transaction, in the county where the property sits. If a property sits in more than one county, it is collected in the county where the greater part of it lies.
What number the tax is based on
It is based on the value written in the deed. For a normal sale, that is the price actually paid. If the deed is a gift, or only a nominal amount is listed (like "$1 and other consideration"), the tax is figured on the estimated price the property would bring on the open market.
Deeds that skip the tax
Section 7 of the statute lists transfers that are exempt. A few examples from the list:
A deed that only confirms or corrects a deed already recorded.
A transfer from a parent to a child, or a grandparent to a grandchild, when only a nominal amount is paid.
A transfer between a trustee and a successor trustee.
A transfer from a borrower to the lender in place of a foreclosure.
A transfer between a person and their own company for a nominal amount, up to that person's share of the company.
A transfer ordered by a court in a divorce.
This is a short list, not the full one, and exemptions have conditions. Ask the county clerk or a real estate attorney before you count on one. You can read the statute itself at Justia's copy of KRS 142.050, and a newer version may exist.
How it fits in your closing costs
The transfer tax is small next to the real estate commission, but it is a real line on the seller's side of the closing statement. For every cost on both sides of a Louisville closing, see How Much Are Closing Costs in Louisville, Kentucky? If you are deciding when to list, Is Louisville a Buyer's Market or a Seller's Market? shows where the market sits right now.
To run your own numbers, use the free Kentucky transfer tax calculator or read who pays taxes when you sell a house in Kentucky.
This is general information, not legal or tax advice. Questions about your own sale? Text or email me at (502) 305-8915 or [email protected].
Rob Bergeron, Owner-Realtor, Winner Realty