The value of used cars has increased by as much as 40% and that means vehicle owners will be paying more this year in property taxes.
The Kentucky Department of Revenue recently sent a letter to local property value administrators alerting them of the “unprecedented” rising value of most motor vehicles.
Warren County PVA Susan Oliver Lewis said a variety of factors are contributing to the hefty increase, including constraints on new vehicle production and inventory, higher prices for new vehicles, and a limited supply of used vehicles.
“So if there’s less supply and demand is still there, prices go up," Lewis told WKU Public Radio. It’s not necessarily a tax rate increase. It’s supply and demand. If vehicles are costing more, then you’re going to pay more in property tax.”
The new values are based on estimates by the National Automobile Dealers Association. Lewis says individuals who believe their vehicle isn’t worth the NADA value should contact her office. The PVA can adjust the value of vehicles based on high mileage, as well as poor condition, which could apply to many vehicles in Warren County following the Dec. 11, 2021 tornado.
In the meantime, legislation has been filed in the Kentucky General Assembly that would provide taxpayer relief from escalating vehicle taxes.
Lewis said valuation increases vary greatly in Warren County. For example, the value of a 2006 Jeep Wrangler last year was estimated at $8,000, while this year, it's valued at $8,125. The owner paid $98.48 in property taxes on the vehicle last year and this year's bill would be $100.01.
Comparatively, the trade-in value last year for a 2019 Dodge Ram truck the was $56,125 and this year, the vehicle's value is assessed at $68,900. The county tax bill on the truck in 2021 was $689.78 compared $846.78 in 2022.