Request By:
Mr. Martin Palmer
1126 Garden Row
Louisville, Kentucky 40213
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: William S. Riley, Assistant Attorney General
In your recent letter an opinion is requested concerning whether a person 65 years of age who leases a plot of ground for 99 years and built his home is entitled to the homestead exemption provisions of the Kentucky Constitution.
Under Section 170 of the Kentucky Constitution, real property maintained as the permanent residence of the owner who is 65 years of age or older, up to the assessed valuation of $6,500 is exempt from assessment, except for special benefit assessments. Under legislation passed by the General Assembly and subsequently approved by the courts the $6,500 exemption has been construed as being tied to the cost of living index by the United States Department of Labor. See KRS 132.810(1)(c). By further amendment to Section 170 of the Kentucky Constitution, the homestead exemption was expanded to include real property held by legal or equitable title, by the entireties, jointly, in common, as a condominium, or indirectly by the stock ownership or membership representing the owner's proprietary interest in a corporation owning a fee or a leasehold initially in excess of 98 years.
In Purcell v. City of Lexington, 186 Ky. 381, 216 S.W. 599 (1920), the Court stated that where land was leased for a 99-year term at a nominal rental, with covenant by lessor to renew for successive 99-year terms perpetually, the leasehold was taxable against the lessee, whether considered as real or personal property and was not an interest required to be listed by the owner of the fee.
It would appear that in light of the Constitution and ruling of the courts, if the lease is for 99 years and is transferable, the person 65 years of age or older who leased the ground and built a home upon it is entitled to the homestead exemption.
We are enclosing a copy of OAG 76-2 which may be of some interest to you concerning this question.