Kentucky Puts the Transfer Tax on the Seller, by Statute, at a Tenth of a Percent
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
A VA loan removes the down payment. It does not remove the cost of transferring the deed, which is one of the few places Kentucky is unambiguously cheap.
The statute
KRS 142.050(2), verbatim:
"A tax upon the grantor named in the deed shall be imposed at the rate of fifty cents ($0.50) for each $500 of value or fraction thereof, which value is declared in the deed upon the privilege of transferring title to real property."
★ $0.50 per $500 is 0.10%. And the incidence is not convention or custom, the statute says upon the grantor, which is the seller.
★★ What that is worth against the states we built alongside it
| Where | On transferring a deed |
|---|---|
| ★ Kentucky | 0.10%, upon the grantor by statute |
| Ohio | auditor fee plus county tax, capped at 0.40% |
| Missouri | a new transfer tax is constitutionally barred |
| Philadelphia | 4.578% combined |
★★ Kentucky is at the cheap end of a cheap region, and the charge falls on the other side of the table. For a VA buyer arriving with no deposit, that is a real and under-stated advantage: closing costs are a far larger share of the cash a zero-down buyer actually needs.
★★ What "value" means, and the part that surprises people
KRS 142.050(1)(b): for a deed that is not a gift, value is "the amount of the full actual consideration therefor, paid or to be paid, including the amount of any lien or liens thereon."
★★ That last clause matters. The measure is not the cash that changes hands; it is the consideration including liens. For a gift or a nominal-consideration deed, value is instead "the estimated price the property would bring in an open market… between a willing seller and a willing buyer."
★ The clerk collects it, and will not record without it
KRS 142.050(3)(a): when a deed subject to the tax is offered for recordation, the county clerk ascertains and computes the amount due and collects it as a prerequisite to acceptance of the deed.
★ So this is not a bill that arrives later. It is settled at the counter, and an unpaid transfer tax is a recording problem, not just a tax problem.
★★ A Kentucky deed requirement worth knowing before closing
KRS 382.135 requires a Kentucky deed to carry the full names and mailing addresses of grantor and grantee, a statement of the full consideration, an in-care-of address for the property tax bill, and, for an ordinary sale, a sworn, notarized certificate signed by BOTH the grantor and the grantee that the consideration in the deed is the full consideration paid.
★★ A clerk is prohibited from filing a non-compliant deed. Your closing agent handles this; it is worth knowing it exists, because it is a signature requirement that catches out-of-state parties who expect the seller alone to sign.
★ What the VA loan does and does not do here
It removes the down payment for a borrower with full entitlement, and for an exempt veteran it removes the funding fee. It does not pay the transfer tax, though in Kentucky the statute puts that on the seller anyway. The fee exemptions.
★ And it is a different tax from the homestead exemption, which reduces the recurring property tax rather than the one-off transfer charge. Two taxes, similar-sounding names. The homestead exemption.
★ What we are not publishing
- Any county recording-fee schedule. Those are county-administered and we did not read them at a primary source.
- ★ Any claim about a local or county transfer-tax add-on, in either direction. We publish what KRS 142.050 says and nothing more. We did not audit Kentucky's 120 counties for local add-ons, so we are not telling you there are none, only that the state rate is the one above. Your title company or county clerk has the complete figure for your address.
- Any rate, annual percentage rate or payment figure. This site publishes none.
★ Allocation of closing costs is a contract matter between buyer and seller. We are the lender; we do not advise on purchase-contract terms, and we are not your attorney or tax adviser.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
How much is the Kentucky transfer tax?
KRS 142.050(2) imposes a tax upon the grantor named in the deed at the rate of fifty cents for each $500 of value or fraction thereof, which is 0.10 percent of the declared value.Who pays the transfer tax in Kentucky?
The seller, by statute. KRS 142.050(2) imposes the tax upon the grantor named in the deed, rather than leaving it to custom or negotiation, though parties can still allocate closing costs between themselves by contract.How is value calculated for the Kentucky transfer tax?
For a deed that is not a gift, value is the full actual consideration paid or to be paid, including the amount of any lien or liens on the property. For a gift or a deed with nominal or no stated consideration, it is the estimated price the property would bring in an open market between a willing seller and a willing buyer.When is the Kentucky transfer tax paid?
At recording. KRS 142.050(3)(a) requires the county clerk to ascertain and compute the tax due when a deed is offered for recordation and to collect it as a prerequisite to accepting the deed.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. Kentucky's homestead exemption is established by section 170 of the Constitution of Kentucky and KRS 132.810 and is administered by county Property Valuation Administrators, not by Cornerstone; the amount is reset every two years by the Kentucky Department of Revenue and the tax effect depends on local rates. Housing market figures describe the twelve months to August 2026 and are not a forecast. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.