Behind on Property Taxes in Kentucky?

Back Taxes in Kentucky: Your Options

This page explains what happens in Kentucky when property taxes on a lot or acreage go unpaid. It covers the discount and penalty schedule, how an unpaid bill becomes a certificate of delinquency at the county clerk, the yearly sale of those certificates to third-party purchasers, the interest and fees they may charge, and the court foreclosure that can follow. It is written for owners of vacant land, including heirs who inherited a parcel with back taxes.

Back taxes do not stop you from selling. Kentucky has no tax deed sale. A certificate of delinquency is a lien, and land is lost only if the certificate holder wins a foreclosure case in court and the land is sold. Until then, you can pay the certificate or sell the land and have it paid from the sale at closing. This page is general information, not legal or tax advice; for your own parcel, ask your county clerk, county attorney or a Kentucky attorney.

When Kentucky property taxes are due and when they become delinquent

Kentucky property taxes are paid to the county sheriff and are due by December 31 of the assessment year (KRS 134.015). The schedule rewards early payment and penalizes late payment:

• Paid in full by November 1: 2 percent discount.
• Paid November 2 to December 31: the face amount on the bill.
• Paid January 1 to January 31: 5 percent penalty.
• Paid after January 31: 10 percent penalty.

From the sheriff to the county clerk: the certificate of delinquency

On April 15, unpaid tax bills move from the sheriff's office to the county clerk's office. Each one becomes a certificate of delinquency, which is a lien on the land.

From then on the bill grows. A certificate of delinquency bears simple interest of 12 percent a year, counted by the month, with each part of a month counted as a full month (KRS 134.125). That is the same rate the Kentucky Department of Revenue states as 1 percent per month. The Department also lists a county clerk fee of 10 percent and a county attorney fee of 20 percent.

The county attorney sends a first notice to delinquent taxpayers by May 15 and a second notice by June 15 if needed. You can ask the county attorney for an installment payment plan.

The yearly sale of certificates to third-party purchasers

Each county clerk holds a yearly sale where registered third-party purchasers pay off certificates of delinquency. The state sets the schedule, and each sale falls 90 to 135 days after the sheriff files the unpaid bills with the clerk (KRS 134.128). The Department of Revenue says most sales run from mid-July through August, with some as late as October.

At least 30 and no more than 45 days before the sale, the clerk publishes a notice listing each certificate by owner, address and parcel number where available. A $5 advertising fee and a share of the ad cost are added to each certificate. Certificates under a payment plan with the county attorney in good standing are not offered.

The purchaser pays the county and takes over the certificate. The purchaser does not own your land. You now owe the purchaser instead of the county.

What a third-party purchaser may charge

Kentucky law limits what a purchaser can collect before filing a lawsuit (KRS 134.452):

• The amount the purchaser paid for the certificate.
• Interest at 12 percent a year on that amount (KRS 134.125).
• Prelitigation attorney fees: up to 100 percent of a certificate of $5 to $350 (max $350), up to 80 percent of a certificate of $351 to $700 (max $560), and up to 70 percent above $701 (max $700).
• Up to $115 for preparing, recording and releasing the assignment at the clerk's office.
• An installment processing fee if you agree to a payment plan with the purchaser.

If the certificate is not paid: court foreclosure

A certificate holder may sue to collect after one year from the date the taxes became delinquent, and must sue within eleven years (KRS 134.546). The purchaser can sue you for the debt, sue to enforce the lien against the land, or both. Once a case is filed, the purchaser may also add reasonable attorney fees for the litigation; fees above $2,000 need court approval (KRS 134.452).

If the court orders the land sold, it is appraised first, and the redemption right in KRS 426.530 applies. If no one buys at the foreclosure sale, the master commissioner deeds the land to the certificate holders (KRS 134.546). An attorney can tell you whether a redemption right applies after a sale in your case.

Your options if you owe back taxes on Kentucky land

The cheapest time to pay is before April 15, while the bill is still with the sheriff. After that, interest and fees grow, and they grow faster once a third-party purchaser holds the certificate.

• Pay the sheriff before the bill moves to the county clerk on April 15.
• Pay the certificate at the county clerk, or set up a payment plan with the county attorney, before the yearly sale.
• If a third-party purchaser holds it, pay the purchaser or ask for a payment plan.
• Sell the land. The certificates, interest and fees are paid from the sale price at closing.

Selling Kentucky land that has back taxes

You can sell land with certificates of delinquency on it. At closing, the closing attorney or title company gets payoff figures from the county clerk and any third-party purchaser and pays them from the sale price. The buyer receives clear title, and you receive the rest.

EasyLotBuyer buys vacant land with back taxes, liens and title issues. We make a cash offer within 24 hours, charge no fees or commissions, pay the closing costs, and can close in as few as 7 days. The back taxes are paid at closing from the sale.

Where to check your Kentucky tax status

For the current year's bill, contact your county sheriff. For older unpaid bills, contact the county clerk, who can tell you whether the state, the county or a third-party purchaser holds each certificate and how to get a payoff. The Kentucky Department of Revenue explains the process and posts delinquent tax bill lists on its Delinquent Property Tax page.