Property tax rates for city of Lexington are decreasing. Here’s what you need to know

Property tax rates for the city of Lexington will be decreased for the next year.

On Tuesday, as recommended by Lexington Mayor Linda Gorton, the Lexington-Fayette Urban County Council voted unanimously to keep an increase in property tax revenue at 4% by rolling back the rate.

The tax rate for the urban services fund — which pays for street cleaning, street lights and garbage pickup — will be reduced as well, from 17.31 cents per $100 of assessed valuation to 16.8 cents per $100 of assessed valuation for a homeowner with all three services , said city budget director Melissa Lueker.

The council will take a final vote on the tax rates at its Aug. 30 meeting.

For the general fund, the tax rate will be 7.8 cents for every $100 of assessed real property and 8.8 cents for every $100 of personal property. The prior year tax rate is 8 cents for every $100 of assessed real property and 8.9 cents for every $100 of personal property.

For a $220,000 home that receives all city services, taxpayers will pay $608.52, according to city estimates. The total property tax bill would decrease by about $20 from last year, said city spokeswoman Susan Straub. Property owners whose homes have been reassessed may have a higher tax bill.

Each year the Urban County Council sets property tax rates.

By state law, the amount of revenue produced by property taxes can only increase 4% in a year. If the property tax produces more than an increase of 4% in revenue, the property tax rate is subject to referendum — the public can vote to roll back the rate.

Such a vote won’t happen in Fayette County based on the rates approved Tuesday.

The council also sets tax rates for other special taxing districts. Tax rates for the Lexington-Fayette County Health Department is 2.6 cents per $100 of assessed valuation.

The Soil and Water Conservation District will be .06 cents per $100 of assessed valuation.

The Fayette County Cooperative Extension Office is keeping their real property rates the same at .4 cents per $100 of assessed valuation, said Lueker.

For a $220,000 home, the total average tax bill would be a total of $8.80 for the extension service tax.

Most property taxes go to the Fayette County Schools. About 63.5% of all property taxes go to the schools, according to city officials. Among the several recipients, the state receives 9.4% of property taxes while the Lexington general fund receives 6.3%.

Some of Lexington general fund tax collections goes to the Lexington Public Library. If the tax rates are approved as expected on Aug. 30, the property taxes for the general fund will generate a total of about $19.4 million for the library and $9.5 million for the city’s general fund.

Lexington has one of the lowest property tax rates in the state, Straub said.