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PVA Addresses Farm Assessment Issue, But Rules Remain "Highly Ambiguous"

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The Kentucky Department of Revenue and the Fayette County Property Valuation Administrator has announced changes aimed at preventing abuse of tax breaks, but officials say legislative action is needed to clean up “inadequate” rules.

In 2016, a Lexington Herald-Leader investigation uncovered 43 Lexington properties slated for development that benefited from tax breaks intended for working farms. By classifying the land, including some large lawns surrounding suburban homes, as agricultural, owners were able to decrease their tax bills by as much as 40 percent.

While no revisions to the tax statutes are anticipated during the 2017 legislative sessions, the PVA’s office is tightening its interpretation of the existing rules. Tuesday, the PVA announced four changes – including using “best efforts” to continually verify that the land is being used as intended, a new application process for the agricultural classification on properties on or after January 1, 2013, and the exclusion of residences in determining whether land meets minimum acreage requirements.

According to the Herald-Leader, Kentucky waived more than $36 billion in property value in 2015 for acres assessed as agricultural – but in most counties, no one authenticated the designation.