Utah Property Taxes: How Do They Work?

Trying to find a state with the lowest property taxes have mostly come into play when people are thinking of moving to a new location. With taxes seemingly going up every year, it can be confusing to understand how exactly property taxes work. If you’re considering moving to Utah, then here’s what you should know about how it works.

The Tax Rates Of The Local Governments

When looking for Homes for sale in Utah, then you’re likely looking at which school district your home will end up in. Thankfully, school districts in Utah receive about 57% of property tax revenues, which is higher than it was 10 year ago: 54%.

Local governments with large assessments of business and secondary residential property tend to have lower property tax rates too, while at the city level, property taxes are determined by the city’s decision to impose utility franchise taxes. City property tax rates are also influenced by city sales tax bases, which is why there is always so much subsidisation in order to draw more retailers to the area.

Increase of Property Value

Many people ask why their taxes are higher than they were last year, and the answer isn’t very simple. Firstly, property tax increase could be the result of property valuations growing faster in one area than in others. When property valuation increases faster than average properties, then a tax increase will take place. This valuation can increase due to being reassessed recently so that the new value reflects what the tax should be. Another reason for an increase in taxes is that the real estate market can push the value of some properties more than others.

Increased Overall Taxes By The Local Government

This is one of the primary sources of increased property taxes. Truth-in-Taxation (a revenue-driven system rather than rate-driven) does not prevent local governments from raising taxes. The certified tax rate is first determined by the Utah State Tax Commission, and local governments are free to choose whether to exceed this tax rate or not. If they choose to do so, they need to go through the Truth-in- Taxation notification and hearing process.

Delinquent Taxpayers Can Raise Property Taxes

Every year, there are some taxpayers who don’t pay their property taxes, either due to financial hardships or other reasons. When this happens, property taxes are increased as a result to prevent any harm from coming to local governments.

Judgment Levies Affect Property Taxes

Occasionally, large taxpayers will appeal their property valuations, which can take several years to resolve. During this period of time, local governments have to refund the overpayments from previous years. As a result, local governments can impose a one-time levy in order to cover the costs of the tax refund.

Whether you’re moving to a new state because of work or you simply wanted to find a better place to home your family, it’s important that you put in the time and research to find the state that is right for you. But Utah could be the place for you to plant your roots.