Journal · Closing Costs
Kentucky’s real estate transfer tax is imposed on the seller, not the buyer. The statute puts it “upon the grantor named in the deed” at fifty cents for each $500 of declared value, and the county clerk collects it before the deed will be accepted for recording. If you are buying a house in Lexington, Richmond or Beattyville, this is one closing-cost line that is not yours by law — though it is negotiable by contract.
Who pays the transfer tax when a Kentucky house sells?
The grantor — the seller. KRS 142.050(2) imposes the tax “upon the grantor named in the deed” at fifty cents per $500 of value, or any fraction of $500.
That works out to $1.00 per $1,000 of declared value, or one tenth of one percent. The “or fraction thereof” language matters: the count rounds up to the next $500 increment rather than prorating. On a deed declaring $300,000, the arithmetic is 600 increments of $500 at fifty cents each — $300.00. On a deed declaring $300,100, it is 601 increments — $300.50.
What the tax is calculated on is defined, not estimated. Under KRS 142.050(1)(b), “value” for an ordinary sale is “the amount of the full actual consideration therefor, paid or to be paid, including the amount of any lien or liens thereon.” For a gift, a nominal-consideration deed or a deed with no stated consideration, value becomes “the estimated price the property would bring in an open market and under the then prevailing market conditions in a sale between a willing seller and a willing buyer, both conversant with the property and with prevailing general price levels.”
Who actually collects it, and when?
The county clerk, at the recording window. KRS 142.050(3)(a) makes collection “a prerequisite to acceptance of the deed for recordation” — no payment, no recording.
Three mechanics follow from the same subsection and the one after it. The clerk computes the amount on the basis of the value set forth in the deed, not on an independent appraisal. The tax “shall be collected only once on each transaction,” and in the county where the deed is required to be recorded under KRS 382.110(1). And under KRS 142.050(4) the clerk certifies the date and amount of collection on the deed itself, retains five percent as the collection fee, and remits the balance every three months to the county treasurer, who deposits it in the county general fund.
Two practical consequences. First, the certification is stamped on the recorded instrument, so the amount paid is a public record you can read back off the deed later. Second, because the money lands in the county general fund, this is county revenue — which is why the declared value on a deed is not a casual number.
The statute says the seller owes it. Your purchase contract can say something else — and that is a term, not a correction.
Which transfers are exempt?
KRS 142.050(7) lists fifteen categories of transfer the tax does not reach. Several come up routinely in Central Kentucky and Gorge-region files.
| Exempt transfer | Subsection |
|---|---|
| Between husband and wife, or between former spouses as part of a divorce proceeding | (7)(e) |
| Between parent and child, or grandparent and grandchild, with only nominal consideration | (7)(l) |
| Under a foreclosure proceeding, or a voluntary surrender under a mortgage in lieu of foreclosure | (7)(j) |
| A deed that confirms or corrects a deed previously recorded | (7)(d) |
| Solely to provide or release security for a debt or obligation | (7)(c) |
| Between a trustee and a successor trustee | (7)(n) |
| Between a limited liability company and any of its members | (7)(o) |
| On partition | (7)(g) |
| On sale for delinquent taxes or assessments | (7)(f) |
| Pursuant to merger, consolidation or entity conversion among corporations, partnerships, limited partnerships or LLCs | (7)(h) |
The remaining five cover deeds recorded before March 27, 1968, gifts or nominal-consideration deeds to or from government bodies, parent-subsidiary transfers for no or nominal consideration, proportionate-interest contributions into an entity for nominal consideration, and matching proportionate distributions out of an entity on dissolution. Note how many of the exemptions turn on the words “nominal consideration” — the exemption is doing work the deed has to state.
Also worth knowing what a “deed” is not. KRS 142.050(1)(a) defines it as any document conveying real property or an interest in it, “other than a will and other than a lease or easement.” A lease or an easement grant is outside the tax by definition, not by exemption.
How this shows up on a real closing statement
In practice the transfer tax is a small number that gets noticed for the wrong reason. It is almost never the dollar amount that causes a problem — it is the assumption. Buyers arrive expecting to pay every tax at the table and sellers sometimes arrive expecting the buyer to cover it, and the statute settles neither question for your particular contract, because the contract can allocate it however the parties agree. What I do is simple: confirm who the purchase contract assigns it to in writing, early, and confirm that the declared value on the deed is the number everyone believes it is. The second one matters more. Where a transfer looks like it may land in one of the KRS 142.050(7) exemption categories — a family transfer, an LLC-to-member transfer, a correction deed — that is a question for your closing attorney and the county clerk before the deed is drafted, not a decision for your agent. I am your agent, not your attorney or your tax adviser.
Transfer tax is one line among several. The recurring one is on Kentucky property taxes, the earnest-money mechanics are on earnest money in Kentucky, and if you are buying in the Gorge region start at homes for sale in Beattyville or with Marcos Gil Realty directly.
Questions that follow
Can the buyer agree to pay the Kentucky transfer tax?
The statutory burden in KRS 142.050(2) falls on the grantor, and the clerk collects before recording regardless of who hands over the money. How the parties allocate the cost between themselves is a contract term. Put it in writing.
What is the Kentucky transfer tax on a $250,000 house?
At the statutory rate of fifty cents per $500 of declared value, $250,000 is 500 increments — $250.00. The rate is set in KRS 142.050(2); the amount always turns on the value declared in the deed.
Is the transfer tax charged twice if the property crosses county lines?
No. KRS 142.050(3)(c) states the tax “shall be collected only once on each transaction,” and in the county in which the deed is required to be recorded by KRS 382.110(1).
Source: KRS 142.050, Real estate transfer tax — Collection on recording — Exemptions, read from the Kentucky Legislative Research Commission on October 31, 2026. Dollar figures above are arithmetic from the statutory rate, not quotes or estimates of any particular transaction.
Last updated October 31, 2026.
By Marcos Gil, REALTOR® — Keller Williams Commonwealth · KY Real Estate License No. 296259 · Call or text (859) 310-1209.
Leave a Reply