Request By:
Mr. William Huff
Supervisor
Department of Property Taxation
Revenue Cabinet
592 East Main Street
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; By: John A. Miller, Assistant Attorney General
You have asked for a review of OAG 81-429. That opinion was written in response to the question of whether an owner who otherwise qualifies for the homestead exemption provided by Section 170 of the Kentucky Constitution should receive the full exemption even if he owns the property for less than the entire year. We answered that question in the affirmative. The opinion went on to express the view that if one qualified to receive the homestead exemption ". . . sells one residence and buys another he is entitled to the exemption on both homes . . . ."
We have concluded that OAG 81-429 should be modified. While the opinion is not entirely incorrect, it overlooks a key feature of the property taxation scheme. It is true that one qualified for the homestead exemption need not own the property for the entire year in order to receive the exemption. However, this is only true because ". . . liability for ad valorem taxes is related to an assessment date, rather than a levy date or a collection date." City of St. Matthews v. Trueheart, Ky., 274 S.W.2d 52 at 54 (1955). In the case of real property, the assessment date is January 1 of each year. KRS 132.220. Thus, it is the ownership of the property as of January 1 of each year which determines whether or not it is entitled to receive the benefit of the homestead exemption.
Under the principle annunciated above, if real property is owned by one entitled to the homestead exemption as of January 1, the property will receive the benefit of the entire exemption for that year even though it may be sold to a non-exempt owner sometime during the year. It is the record owner as of the assessment date who is responsible for listing the property for taxation and for paying the tax. KRS 132.220(1); OAG 64-710. This is so even though, as between the parties, ultimate liability may fall upon one other than the owner as of the assessment date. See KRS 134.060.
The essential point which OAG 81-429 failed to comprehend or consider is that whether the property qualifies for the homestead exemption is determined as of January 1 each year. City of St. Matthews, supra. If one who is qualified for the homestead exemption owns the property as of that date, the property will receive the benefit of the exemption. If the property is owned as of the assessment date by one not qualified to receive the exemption, it will not receive the exemption for that year even though it may be acquired during the course of the year by one who is entitled to the exemption. To the extent that OAG 81-429 failed to recognize the controlling nature of the assessment date, it is overruled.