Hi, I'm Todd Kornack with Schuler Bauer Real Estate Services. "Which side is cheaper?" is one of the top questions I get, and the honest answer is that it depends on your income, your home price and where you work. Here are the pieces I walk buyers through, using numbers I can point to. Tax rules change, so always confirm the current figures with a tax professional before you decide.
Home prices
My November market update showed the median sales price in Greater Louisville sitting right around $300,000, while Southern Indiana was near $285,000. Across both sides of the river there were roughly 3,500 active listings, which means buyers on either side have more choices and more room to negotiate than last year.
Property taxes
Indiana caps property tax bills on a homestead at 1% of the home's assessed value, under the state constitution. To get that cap and the homestead deduction, you need to file for it. Kentucky does not use the same cap. Your bill depends on your county, city, school district and special districts. In Kentucky, if your county mails bills by October 1, you get a 2% discount for paying in full by November 1, and a penalty starts January 1. When we look at a specific house, I pull its last tax bill so you are comparing real numbers, not guesses.
Transfer taxes when you sell
Kentucky charges the seller a state transfer tax of 50 cents per $500 of value, which is $1 per $1,000. On a $300,000 sale that is $300. Indiana does not have a state real estate transfer tax. It is not a big number either way, but it is a real difference.
Income taxes
Both states use a flat state income tax, and both have been lowering their rates in recent years. Indiana adds a county income tax that varies by county. In Louisville, Metro Louisville and the school district collect an occupational license tax on wages. If you live in Indiana and work in Louisville, or the reverse, your paycheck can be taxed differently than your neighbor's, so this is the one I tell people to run with an accountant. It can matter more than the house price.
Insurance and other costs
Homeowners insurance depends on the house, the age of the roof and whether it sits in a flood zone. Homes near the river or creeks in both states sometimes need flood insurance, which can change your monthly budget a lot. We check the flood map on every home before you write an offer.
My plain advice
Do not pick a state on taxes alone. Start with the commute, the school district and the house you want, then run the full monthly cost for your top two or three homes, including taxes and insurance. I am licensed in Kentucky and Indiana, so I can show you homes on both sides and help you compare them fairly.
Todd Kornack, Schuler Bauer Real Estate Services. Your agent on both sides of the river. Call or text (502) 232 1915 or visit https://toddsellskentuckiana.huzi.site/
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