Kentucky · 109th largest metro area

Buying a home in Lexington, Kentucky

In Lexington, the median value of owner-occupied homes is $293,500, Fayette County's effective property tax rate is 0.87%, a purchase mortgage carried a median $4,524 in total loan costs in 2025, and median gross rent is $1,164 a month.

Data as of : Census ACS 2020-2024, Census Vintage 2024, HMDA 2025, HUD FY 2027. Sources

Lexington home costs, fact by fact

About Lexington

Lexington, with 329,437 residents, lies in the Lexington-Fayette metro area, ranked 109th nationally. Median gross rent is $1,164 per month, and HUD's Fair Market Rent for a two-bedroom in Fayette County is $1,416. Fayette County's effective property tax rate is 0.87%, and 53.8% of homes are owner-occupied.

Reading the Lexington figures

Lexington's value of $293,500 is above the Kentucky median of $242,000 and above Louisville's $233,900, the only other covered Kentucky city. Rent leans the same way, though less sharply: $1,164 in Lexington against $1,120 in Louisville. The gap shows up most in ownership. Lexington owners hold 53.8% of households, while Louisville reaches 60.7%, so Lexington has the larger renter base.

Fayette County is unusual in this fiche because its median value, $293,500, matches the city's exactly. Tax runs at 0.87% of value, a typical bill of $2,542 a year. A buyer pricing a home near the city median can therefore read the county rate without adjusting for a different base value.

HUD's yardstick for the Lexington-Fayette, KY MSA is $1,416, and the larger home reaches $1,948, both above the $1,164 city median. Remember that HUD publishes a benchmark, not a market median. Mortgage costs in the county were recorded across 2,397 loans in 2025, with a typical figure of $4,524 and the bulk between $3,262 and $7,430. Lexington has 329,437 residents inside a metro of 533,366 (109th), while Louisville counts 640,796.

Calculate for Kentucky

If you buy

Kentucky state transfer tax

Real estate transfer tax (KRS 142.050): $0.50 for each $500 of value, or fraction of $500. Change the price: the amount is recalculated instantly.

Price$242,000
State transfer tax$242
Share of the price0.1% of the price
Who paysThe seller

Default price: the Kentucky median value of owner-occupied homes, $242,000 (Census ACS 2025). Rule: Divide the value by $500, round up to the next whole unit, multiply by $0.50. In a sale, value is the full actual consideration including liens; in a gift it is the estimated open-market price. No minimum or maximum is stated. Who pays: KRS 142.050 imposes the tax on the grantor named in the deed. The sources do not say whether a contract can shift it to the buyer. Not included: county and city transfer taxes, recording fees, title insurance and lender charges. Kentucky transfer tax guide · all 50 states.

If you sell

Capital gain and the federal tax on it

Same federal rule in every state: Section 121 of the Internal Revenue Code excludes up to $250,000 of gain on a main home ($500,000 for a married couple filing jointly).

Capital gain$350,000
Section 121 exclusion$250,000 (limit $250,000)
Taxable gain$100,000
Type of gainLong-term (owned over 1 year), 15% chosen
Federal tax on the gain$15,000

Section 121 excludes $250,000; the rest is taxable.

Gain = sale price minus your adjusted basis (purchase price, buying costs and improvements); selling expenses reduce it (IRS Publication 523). Long-term rates for sales in 2026, by taxable income including the gain (IRS Rev. Proc. 2025-32, section 4.03): 0% up to $49,450 single or $98,900 married filing jointly, 15% up to $545,500 single or $613,700 jointly, 20% above. Not included: Kentucky state income tax on the gain (not computed), the net investment income tax, depreciation recapture on a rental or home office, and the reduced exclusion for an early sale. Agent commissions are negotiated and never set by law. Capital gains on a home sale.

Questions about buying a home in Lexington

How much is property tax in Lexington?

Homeowners in Fayette County pay a median $2,542 a year in property tax, 0.87% of the county median home value of $293,500 (Census ACS 2020-2024). Your bill depends on your assessed value and local rates.

What are closing costs on a mortgage in Lexington?

Home-purchase mortgages in Fayette County carried median total loan costs of $4,524 in 2025; half of the 2,397 loans fell between $3,262 and $7,430 (HMDA). Total loan costs are the lender and settlement-service charges of the Closing Disclosure; transfer taxes and prepaid items come on top.

Is there a transfer tax when you buy a home in Lexington?

Kentucky charges a real estate transfer tax of $0.50 for each $500 of value or fraction of $500, which is $242 on a $241,700 sale. The statute puts it on the grantor named in the deed, the seller, and the county clerk collects it before recording.

Is it cheaper to rent or buy in Lexington?

It depends on your mortgage rate, down payment and how long you stay. As a benchmark, the median value of owner-occupied homes in Lexington ($293,500) equals 21 years of the median gross rent ($1,164 a month), both from Census ACS 2020-2024.

Run your own numbers: rent vs buy calculator · closing costs calculator.

Kentucky rules that apply in Lexington

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Sources

Kentucky · All states · Federal guides