Kentucky's Homestead Exemption Is Not a Veteran Benefit. One Rule Is.
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
We are a lender, and two of the three things on this page are unwelcome. We would rather you heard them from us before you were under contract than from an appraiser afterwards.
★★★ The exemption is real, and it is not about your service
Most states in this network write a property-tax benefit specifically for disabled veterans. Kentucky does not. Ky. Const. § 170 exempts the permanent residence of an owner who is:
"sixty-five years of age or older, or is classified as totally disabled under a program authorized or administered by an agency of the United States government or by any retirement system either within or without the Commonwealth…"
★★★ A veteran gets in through the disability door, on the same terms as any other totally disabled Kentuckian. Your service is what produced the rating; it is not itself the qualification. Every condition, and the amount.
★★★ But there is exactly one rule written for veterans, and it is worth knowing
KRS 132.810(2)(d) requires every totally disabled claimant under 65 to apply for the exemption every single year: with named exceptions:
"a. A service-connected totally disabled veteran of the United States Armed Forces; or b. A totally and permanently disabled individual found disabled under i. … the Social Security Administration; ii. … the Kentucky Retirement Systems; or iii. Any other provision of the Kentucky Revised Statutes; shall document the disability at the time of application … and shall not be required to apply for the homestead exemption on an annual basis."
★★ Small, specific, and almost nowhere reported. Every other under-65 disabled Kentuckian re-files annually; you document once. What that means in practice.
★★ What it is worth
$49,100 of assessed value for the 2025 and 2026 assessment years, up $2,750 from $46,350. The Department of Revenue's own worked example: a residence assessed at $200,000 is taxed on $150,900.
★ The figure traces to a constitutional $6,500, which KRS 132.810 says means $6,500 "in terms of the purchasing power of the dollar in 1972", reset every two years if the cost-of-living index moves at least 1%. The full 1972-to-present table.
★★★ And the part no lead-generation site wants to tell you
13 of Kentucky's 20 metros fell in typical value over the year to August 2026. Only 7 rose.
★★★ That is not a national pattern. We built the Ohio and Missouri sites in this same round, from the same file and the same month: Ohio had 39 of 40 metros rising, Missouri 24 of 25. Measured across every state with at least ten metros, Kentucky has the second highest share of falling metros in the country at 65%, behind only Florida at 72%. All 20 metros, and how we checked.
★★★ The sharpest edge of it for a VA borrower: Elizabethtown, the metro containing Fort Knox, fell 3.5% to $247,027: and it fell in every single month of that year. A VA buyer with full entitlement puts nothing down, so there is no equity cushion to absorb a decline. What we actually advise there.
★ That describes the last twelve months. We publish no forecast, because we do not have one and nobody honest does.
★ Three things that are straightforwardly good here
- ★ Transfer tax is 0.10%, $0.50 per $500, and KRS 142.050 puts it upon the grantor, the seller. The statute
- Loan limits never bind. All 120 counties sit at $832,750, and with full entitlement the VA says there is no limit anyway. Why
- ★★ Prices are low and getting lower. That is bad if you are selling in two years and good if you are buying to stay. Which one you are is the whole question. How we work through it
★ Our lane
We are a lender. We do not grant the exemption, set its amount, or decide your disability rating, and we are not affiliated with the VA or any Kentucky agency. We raise the tax question because property tax is escrowed into the payment we underwrite, and the market question because a zero-down loan is where a falling market bites hardest.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
Does Kentucky have a property tax exemption for disabled veterans?
Not a veteran-specific one. Section 170 of the Constitution of Kentucky exempts the permanent residence of an owner who is sixty-five or older, or who is classified as totally disabled under a program authorized or administered by an agency of the United States government. A veteran qualifies through the total-disability route on the same terms as any other totally disabled Kentuckian.Is there anything in Kentucky property tax law written specifically for veterans?
One provision. KRS 132.810(2)(d) requires every totally disabled claimant under sixty-five to apply for the homestead exemption annually, but exempts a service-connected totally disabled veteran of the United States Armed Forces, who documents the disability once at the time of application and is not required to apply on an annual basis.How much is the Kentucky homestead exemption in 2026?
$49,100 of assessed value for the 2025 and 2026 assessment years, up $2,750 from the $46,350 that applied in 2023 and 2024. The Department of Revenue's own example is that a residence assessed at $200,000 is taxed on $150,900.Is the Kentucky housing market falling?
Thirteen of Kentucky's twenty metros fell in typical value over the year to August 2026 and only seven rose. Across every state with at least ten metros in the same dataset, Kentucky had the second highest share of falling metros in the country at 65 percent, behind only Florida at 72 percent. That describes the past twelve months and is not a forecast.What is the VA loan limit in Kentucky?
All 120 Kentucky counties carry a one-unit limit of $832,750 for 2026, and Kentucky has no high-cost county. For a borrower with full entitlement the VA states there is no loan limit at all, subject to affordability, the appraisal and lender approval.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. Kentucky's homestead exemption is established by section 170 of the Constitution of Kentucky and KRS 132.810 and is administered by county Property Valuation Administrators, not by Cornerstone; the amount is reset every two years by the Kentucky Department of Revenue and the tax effect depends on local rates. Housing market figures describe the twelve months to August 2026 and are not a forecast. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.