Kentucky taxes the transfer of real estate at 50 cents for each $500 of value, and the statute imposes the tax on the grantor. The county clerk computes it from the value declared in the deed and collects it before the deed is recorded. For a sale the value is the price; for a gift it is the property's fair cash value, the figure the consideration certificate supplies.
The same statute lists the transfers that owe no tax. This page explains how the tax is measured, goes through every exemption with the family transfers marked, and says how to claim one on the deed.
How the Tax Is Measured
The statute defines a deed broadly: any document, other than a will, lease or easement, by which real property in Kentucky or any interest in it is conveyed, transferred or assigned. A quitclaim deed is a deed. The tax is imposed on the grantor named in the deed, at 50 cents for each $500 of value or fraction of $500, on the value declared in the deed.
- 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 on the property. A buyer who takes over a $120,000 mortgage and pays $30,000 cash has paid $150,000 for tax purposes.
- For a gift, or a deed with nominal consideration or no stated consideration, value is the estimated price the property would bring in an open market, under the conditions then prevailing, in a sale between a willing seller and a willing buyer who both know the property and the market.
Reciting $1 on a family deed therefore does not reduce the tax to nothing. It makes the deed a gift deed, and the tax, if any is due, is worked out on the fair cash value the consideration certificate states. Where the deed is exempt, the certificate still gives the value, and the tax is nil.
Who Pays, and When
The grantor. When a taxable deed is offered for recording, the clerk ascertains and computes the tax and collects it as a prerequisite to accepting the deed. The clerk then certifies the date of payment and the amount on the deed itself, keeps five percent as the collection fee, and remits the rest to the county. A separate section of the recording law says a deed is not legally lodged for record until the tax is paid, so an unpaid tax is not a debt that follows recording; it is the reason the deed did not record.
The tax is collected once for each transaction, in the county where the deed has to be recorded, which is the county holding the property or the greater part of it.
Every Exemption
The statute says the tax does not apply to a transfer of title in these cases. The ones a family quitclaim deed meets are in bold.
- Recorded before March 27, 1968.
- By a deed of gift or for nominal consideration to, or by any deed from, the United States, Kentucky, a city or county in Kentucky, or an agency of any of them.
- Solely in order to provide or release security for a debt or obligation.
- Which confirms or corrects a deed previously recorded.
- Between husband and wife, or between former spouses as part of a divorce proceeding.
- On sale for delinquent taxes or assessments.
- On partition, where co-owners divide property between themselves.
- Pursuant to a merger, consolidation or conversion of corporations, partnerships or limited liability companies.
- Between a subsidiary and its parent corporation for no or nominal consideration, or for the surrender of stock.
- Under a foreclosure, or by voluntary surrender under a mortgage in lieu of foreclosure.
- From a person to a corporation, partnership or limited liability company, for nominal consideration, to the extent of the transferor's proportionate interest in the entity.
- Between parent and child or grandparent and grandchild, with only nominal consideration.
- From an entity to an owner on the entity's dissolution, for nominal consideration, to the extent of that owner's proportionate interest.
- Between a trustee and a successor trustee.
- Between a limited liability company and any of its members.
A separate subsection covers transfers to a trustee to hold in trust, and from a trustee to a beneficiary. Those are exempt if the grantor is the sole beneficiary of the trust; if the grantor is a beneficiary and a direct transfer from the grantor to all the other individual beneficiaries would have been exempt under the list above; or if a direct transfer from the grantor to all the other individual beneficiaries would have been exempt. A parent deeding a house into a revocable living trust for the parent's own children passes the second or third test, as long as every other beneficiary is someone the parent could have deeded the house to tax-free, such as a spouse, child or grandchild. It does not pass the first, because the parent is not the only beneficiary.
Read the list for who is missing. Brothers and sisters are not on it. Nor are aunts, uncles, nieces, nephews, cousins, stepchildren, or unmarried partners. A quitclaim deed giving property to any of them is taxed on the fair cash value the consideration certificate states, and the tax falls on the person giving the property away.
Claiming an Exemption on the Deed
The statute does not prescribe words for claiming an exemption. The clerk decides from the face of the deed whether tax is due and how much, so the deed should say plainly which exemption applies and why. A sentence near the consideration is enough:
This conveyance is exempt from Kentucky real estate transfer tax under KRS 142.050(7)(l), being a transfer from parent to child for nominal consideration.
Change the letter and the reason to match: (e) for a transfer between spouses or as part of a divorce, (d) for a correction deed, (c) for a deed only securing or releasing a debt, (g) for a partition, (n) between a trustee and successor trustee, and subsection (8) for a transfer into or out of a qualifying trust. The relationship the exemption depends on should be stated in the deed. The consideration certificate is completed regardless, and for a gift it still states the fair cash value.
What the Tax Comes To
Where no exemption applies, the arithmetic is one dollar for each $1,000 of value, rounded up to the next $500:
- $75,000 of value: $75
- $150,000 of value: $150
- $250,000 of value: $250
- $400,000 of value: $400
The recording charges are separate and are paid on every deed, exempt or not: $50 for a deed of up to five pages and $3 for each page beyond five. Inside the $50 is a $4 state tax on each conveyance of real property, imposed by a different statute, that the transfer tax exemptions do not reach.
Kentucky Transfer Tax Exemptions — Common Questions
How much is Kentucky's real estate transfer tax?
Fifty cents for each $500 of value, or fraction of $500, which works out to one dollar for each $1,000. The statute imposes the tax on the grantor. For a sale, value is the full consideration paid or to be paid, including any lien on the property. For a gift, or a deed reciting a nominal sum or nothing, value is what the property is estimated to bring on the open market. On a $150,000 property the tax is $150. The county clerk computes it from the value in the deed and collects it before recording.
Is a gift to a family member exempt?
Only for the relatives the statute names. A transfer between husband and wife is exempt, and so is one between former spouses as part of a divorce. A transfer between parent and child, or grandparent and grandchild, is exempt when the consideration is only nominal. Every other family gift, between siblings, from an aunt or uncle to a niece or nephew, from a stepparent to a stepchild, is taxed on the property's fair cash value as stated in the consideration certificate.
What about a deed into my living trust?
Exempt, in the ordinary case. The statute lifts the tax from a transfer to a trustee to hold in trust, or from a trustee to a beneficiary, where the grantor is the sole beneficiary of the trust, or where a direct transfer from the grantor to all the other individual beneficiaries would itself have been exempt. A parent's revocable trust for the parent's own children qualifies under the second test, as long as every other beneficiary is a spouse, child or grandchild. A transfer between a trustee and a successor trustee is exempt on its own line.
How do I claim an exemption on the deed?
The statute sets no form of words, and the clerk decides from the deed whether tax is due, so say plainly in the deed which exemption applies, for example: "This conveyance is exempt from real estate transfer tax under KRS 142.050(7)(e) as a transfer between husband and wife." The consideration certificate still has to be completed, and for a gift it still gives the fair cash value; the exemption removes the tax, not the certificate.
Does the exemption cover the recording fee?
No. The transfer tax and the recording charges are different things. An exempt deed still pays the county clerk's recording fee, $50 for the first five pages and $3 for every page after that. The $50 includes a $4 state tax on every conveyance that no exemption in the transfer tax statute reaches.
Official Sources
Kentucky's laws are collected in the Kentucky Revised Statutes, and a citation such as KRS 142.050 is an address: the chapter, then the section within it. Each links to the section on the Kentucky Legislature's website, where it opens as a PDF in a new tab.
- KRS 142.050 — the transfer tax: the definition of a deed and of value, the rate, the grantor's liability, the clerk's collection and certification, the fifteen exemptions and the trust subsection.
- KRS 382.260 — a deed is not legally lodged for record until the tax is paid.
- KRS 382.135 — the sworn consideration certificate that supplies the value for a sale or a gift.
- KRS 142.010 and KRS 64.012 — the $4 state tax on each conveyance, and the county clerk's recording fees.
Tax and fee amounts checked against the Kentucky Revised Statutes on September 3, 2026.