Free Kentucky Residential Purchase Agreement Template

A Kentucky residential purchase agreement is the written contract that locks in a home’s price, conditions, and closing date. Its sale price also matters later, because the deed’s declared value sets the state transfer tax.

Kentucky’s main closing rule is its real estate transfer tax. Account for it when you draft your Kentucky residential purchase agreement.

How the Tax Is Figured

The tax is fifty cents for each $500 of value, or fraction of $500, declared in the deed (KRS 142.050). It’s figured on the value of the transferred property as the deed sets it out. For example, a $250,000 sale carries $250 in transfer tax.

For this tax, a deed means any document conveying Kentucky real property or an interest in it. Wills, leases, and easements don’t count.

Gifts and Nominal Prices

Some deeds are gifts or show only nominal consideration. For those, the county uses the estimated price the property would bring on the open market. The Kenton County Clerk’s office explains this in its transfer tax guidance.

Paid Before Recording

Once someone offers a taxable deed for recording, the county clerk computes the tax. The clerk collects it before accepting the deed, and collects it only once per transaction, in the county where the deed must be recorded. Rates can change, so confirm the amount with the county clerk before closing.

The seller. Kentucky’s statute imposes the tax on the grantor named in the deed (KRS 142.050). In a sale, that’s the seller, and the tax comes due at recording rather than when the agreement is signed.

That differs from states where the tax falls on whoever the contract names. Still, use the purchase agreement to confirm the price the deed will show. That figure drives the tax.

Kentucky sales usually close in this order.

1. Set the terms. Both sides execute the Kentucky residential purchase agreement.
2. Have the deed written up. Your closing agent includes the declared value.
3. Budget for the tax. The seller plans for the transfer tax at the statutory rate.
4. Offer the deed for recording. The county clerk calculates and collects the tax.
5. Finish recording. Payment clears the way for the deed to be recorded.

List these terms in the contract:

• Each party’s full legal name
• The home’s location and full legal description
• Purchase price, deposit, and financing
• Who pays each closing cost besides the transfer tax
• Inspection and appraisal deadlines
• Closing and move-in dates