Request By:
Mr. John T. Yeager
10010 Morgan Avenue
Fairdale, Kentucky 40118
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General it is stated that the homestead exemption was passed in 1971 to exempt from taxation property of assessed value up to $6,500 on single family residences owned and occupied by persons 65 years old or older. In 1975 it was extended to residences other than single family residences.
It is also stated that this homestead exemption has been changed to $7,000 by the so-called "rubber dollar" opinion.
The question is by what authority is this increase made since the Constitution provided for a $6,500 exemption.
The increase is based on an opinion of the Court of Appeals, now the
Supreme Court of Kentucky, in Lester v. City of Fort Thomas in 1975, Ky. 531 S.W.2d 491. There the Court stated that the "rubber dollar" principle as applied to the $6,500 homestead exemption limit is valid.
The General Assembly in 1974 stated that the $6,500 exemption is to be construed to mean $6,500 in terms of the purchasing power of the dollar in 1972. Every two years thereafter, if the cost of living index by the United States Department of Labor is changed as much as one percent the maximum exemption is to be adjusted accordingly. See KRS 132.810(2)(c).
For the year 1977 the homestead exemption has been adjusted to $8,900.