Updated 2026 · Based on median market data for London, KY
The effective property tax rate in London, KY is 0.81%. On the median home price of $155,000, that's an annual tax bill of approximately $1,256 — or $105/mo. This is below the national average of ~1.1%, giving investors a meaningful expense advantage.
Property taxes consume 9.3% of gross rental income in London. At under 10% of gross rent, taxes are a minor expense that leaves plenty of room for cash flow. This is a significant advantage over high-tax markets. Without property taxes, the cap rate would be 7.46% — the 0.81% tax rate reduces it to 6.65%, a drag of 0.81 percentage points.
Property tax bills are based on assessed value, which may differ from market value. In many jurisdictions, assessed values lag behind market prices, meaning your actual tax bill after purchase could increase once the property is reassessed. In KY, check whether purchases trigger automatic reassessment — if so, budget for taxes based on your purchase price, not the seller's current bill. Also investigate whether KY offers any homestead exemptions that landlords would NOT qualify for, as this could increase your effective rate.
With a relatively low tax rate, London's tax environment is already investor-friendly. Focus your optimization efforts on the other expense categories — insurance, maintenance, and vacancy management — where there's more room to improve returns.
London vs Kentucky state average and national average across key investment metrics. London outperforms both benchmarks on cap rate.