Tax Foreclosure in Kentucky: What Homeowners Need to Know
A guide from AuctionBlock.org — a mission-driven company dedicated to foreclosure prevention education
Kentucky uses a tax lien system. Counties sell certificates of delinquency to third-party purchasers, who can eventually foreclose if the taxes are not paid.
How It Works
Property taxes in Kentucky are collected by the county sheriff. Under KRS 134.010 et seq., unpaid taxes are transferred to the county clerk's office, which issues certificates of delinquency. These certificates are then sold to third-party purchasers at an annual sale.
The certificate purchaser pays the delinquent taxes and receives the right to collect the debt plus interest (12% per year under KRS 134.125). If the homeowner does not pay, the certificate holder can file a lawsuit to foreclose on the lien.
Redemption Period
Under KRS 134.490, the property owner has a right of redemption. The owner can redeem the property by paying the delinquent taxes, interest, penalties, and costs at any time before the court enters a judgment of foreclosure. Once the court enters a judgment and the master commissioner's sale occurs, the right of redemption is generally extinguished.
Key Programs and Exemptions
Homestead Exemption: Under KRS 132.810, homeowners 65 and older are entitled to a homestead exemption that exempts a portion of their property's assessed value from taxation. The exemption amount is adjusted periodically by the Kentucky Department of Revenue. Apply through your local Property Valuation Administrator (PVA).
Disabled Veteran Exemption: Under KRS 132.810, totally disabled veterans may qualify for the same homestead exemption available to senior citizens.
Homeowner Assistance Fund: Kentucky received federal HAF funding under the American Rescue Plan Act. Check current availability through the Kentucky Housing Corporation at kyhousing.org.
Where to Get Help
- Legal Aid Society (Louisville): Call (502) 584-1141 or visit laslou.org.
- AppalReD (Appalachian Research and Defense Fund): Serves eastern Kentucky. Call (859) 431-3004 or visit ardfky.org.
- Kentucky Legal Aid: Serves western and south-central Kentucky. Call 1-866-452-9243 or visit klaid.org.
- HUD-Approved Housing Counselors: Call 1-800-569-4287 or visit hud.gov/counseling.
Take Action
Contact the county sheriff's office or county clerk before your taxes are sold at the certificate of delinquency sale. Ask about payment options.
Visit auctionblock.org/get-help for free resources and referrals.
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Laws and programs change. Verify current rules with your local PVA or a licensed attorney. AuctionBlock.org is a mission-driven company.