KY vs. IN Property Taxes 2026: Same $350K Home, $1,175 Gap

Kentucky vs Indiana · Louisville KY & Southern Indiana · Updated October 2026

Kentucky vs. Indiana Property Taxes 2026: What the Same Home Actually Costs

The same $350,000 home, taxed on both sides of the river, with the 2026 math shown step by step.

Owner-occupied home, 2026 rates, assessed value equal to purchase price. Illustrative.

Statewide averages make Kentucky and Indiana look almost identical. Local bills tell a different story, because the two states calculate taxes in completely different ways. Here's the side-by-side math for the same house on both sides of the river.

Compare the bill on the actual home, not the statewide average.

Key Terms, in Plain English

How are Kentucky property taxes calculated?

In Jefferson County, the bill is the assessed value times the combined local rate, with no cap. For a home in Louisville's Urban Service District, the 2026 rates add up to about $1.25 per $100 of assessed value:

Homes in a fire district or a small city such as Anchorage or Jeffersontown pay different rates. For the full breakdown, see why Jefferson County tax bills jumped this year.

Outside Jefferson County, Shepherdsville (Bullitt County) and Elizabethtown (Hardin County) use the same Kentucky system with their own local rates and no cap. The Shepherdsville buying guide and Elizabethtown buying guide cover those costs.

How are Indiana property taxes calculated?

Indiana subtracts deductions first, applies the local rate, then caps a homestead's bill at 1% of its gross value. In high-rate city districts, the cap often decides the bill.

How it works, step by step

The 2026 rates in the largest Southern Indiana cities are high: about $2.96 to $3.10 per $100 in the City of Jeffersonville, depending on the district, and $2.75 in New Albany. That's why the cap matters so much. More on the 2026 changes in what's changing on Clark and Floyd County bills.

What does the same $350,000 home cost on each side of the river?

About $4,375 a year in Louisville vs. about $3,200 in Jeffersonville or New Albany. Here's the math.

Louisville (Urban Service District)

Jeffersonville (City of Jeffersonville, $2.9594 district)

New Albany's rate ($2.7474) produces $4,978 before the cap, so it also lands at about $3,200.

The difference

Illustrative. Assumes assessed value equals a $350,000 purchase price and 2026 rates. In lower-rate areas like Georgetown Township ($1.7772), the bill comes in under the cap: $181,200 ÷ 100 × $1.7772 = $3,220, minus the $300 credit, is about $2,920. Voter-approved referendum taxes can be added on top of Indiana's cap, and land beyond one acre is capped at 2%, not 1%.

Why do online averages say the two states are about the same?

Because statewide averages blend in very different homes. An "effective rate" divides tax paid by home value across a whole state, mixing rural counties, older assessments, and exemptions. It can't show you that Jeffersonville's high city rate is capped while Louisville's isn't. For a real decision, compare the actual bill on the actual home.

When does Kentucky come out ahead?

For homeowners 65 and older, the gap shrinks. For rental property, Kentucky usually wins.

Homeowners 65 and older

Kentucky's homestead exemption takes $49,100 off the assessed value, worth about $614 a year in Louisville. That brings the Louisville bill to about $3,761. Indiana's Over 65 Credit takes up to $150 off for owners under the income limits, bringing Jeffersonville to about $3,050. The gap narrows to about $711 a year. See how Kentucky's senior exemption works.

Rental and investment property

Indiana's 1% cap applies only to the home you live in. Other residential property, including rentals, is capped at 2% and gets no homestead deductions. On a $350,000 Jeffersonville rental, the tax before the cap would be about $10,358, capped at about $7,000. The same rental in Louisville still pays about $4,375. Investors should read the Louisville vs. Southern Indiana investment comparison.

Putting it together: three example buyers

Examples, not recommendations.

Common mistakes

Your next steps

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Frequently Asked Questions

For a homeowner, Southern Indiana's 1% cap usually means a smaller property tax bill on the same home. Whether that makes Indiana the better buy depends on the rest of your monthly cost, so run the whole picture before you choose a side of the river.