Are you planning to become a homeowner in Utah, or are you already one? This state is famous for many things, including its stunning natural landscape, rich culture, and the Great Salt Lake.
However, you may be concerned about other issues if you are or plan to become a Utah property owner, including taxes.
How are property taxes calculated in Utah? When should you pay your bills? This guide offers all the information you need to answer these questions and more. Read on!
Understanding Different Types of Property Tax Bills in Utah
Utah property taxes help fund public services, including city or municipality infrastructure, school districts, and law enforcement Therefore, they're handled at the county level.
In other words, as a home or business property owner, you should pay these taxes exactly where your property is located.
Also, in Utah, several elected county offices levy property taxes. These are:
- The Recorder/Surveyor's Office: It records each property's ownership and boundaries in a specific county.
- The Assessor's Office: It estimates each property's fair market value.
- The Clerk/Auditor's Office: It considers the property value determined by the Assessor's Office and budget requirements to calculate the property tax rate. In addition, it mails the initial notice of value and receives appeals.
- The Treasurer's Office: It sends out the final property tax bill, collects payments, and distributes funds.
- The County Commission: It approves county agencies' annual budgets and acts as the Board of Equalization to handle atypical appeals.
How Many Times Do You Pay Property Taxes a Year in Utah?
More often than not, property owners receive property tax notices approximately the third week of October.
After receiving the notice, taxpayers have until November 30 to pay their tax bills. The due date will always be this day unless it falls on a weekend. In that case, it'll move to Monday.
All property owners should pay property taxes on time. Otherwise, they can be subject to penalties, additional fees, and other consequences.
If you haven't received your property tax notice by the first day of November, contact the Treasurer's office as soon as possible.
Consequences of Late Payments
What would happen if you don't pay your taxes on time? As mentioned, delinquent taxes are subject to penalties and other consequences. Let's go over each one.
The penalty for delinquent property taxes is the greater of 1% or $10.00 per delinquent parcel as long as payment is made before January 31.
If you pay the overdue amount after January 31, delinquent taxes carry a penalty of 2.5% of the balance you owe on December 1.
In addition, authorities can charge interest to your delinquent property taxes as defined by the State Statute 59-2-1331.
If you have delinquent taxes for four years or more, the county may hold a public auction or tax sale and sell your property to pay off the overdue amount.
Under Utah law, tax sales should take place in May or June. However, property owners must be notified about the auction and have the right to stop the sale if they pay delinquent taxes with additional charges and administrative costs.
Unlike other states, Utah doesn't allow homeowners to redeem their properties if they have already been sold at a tax sale.
How to Pay a Property Tax Bill in Utah
There are multiple options available to homeowners who want to pay their property taxes in Utah, including the following:
- Credit cards through tap.utah.gov or by calling 801-297-7703 (800-662-4335 ext. 7703) with American Express, Visa, MasterCard, and Discover credit cards (a convenience fee is applied)
- E-check (electronic check)
- Personal checks
- Cash or cashier's checks
- Traveler's checks
- Money orders
However, the Utah County Treasurer won't accept third-party checks. Also, if the property is subject to tax sale, property tax payments must be made with Certified Funds.
How Much is Property Tax in Utah?
In Utah, residential properties receive a 45% exemption if they're the taxpayer's primary residence. That means only 55% of the home's value is taxable. As a result, median property taxes are low.
Also, the average effective property tax rate in Utah is only 0.58%, which is also well below the national average.
However, the Utah tax system is unique. The base property tax revenue in this state should be the same as the previous year.
In simple terms, the state of Utah guarantees taxing entities the previous year's property tax revenues even if property values change.
If everything else also remains unchanged, property tax rates should stay the same. However, the reality is more complex.
How is Property Tax Calculated in Utah?
The following three elements determine each property's tax amount:
Taxing entities create budgets based on property tax revenue. However, the process must be handled under the "Truth in Taxation" law.
These bodies are required to hold a hearing to allow taxpayers to comment on the budget if there's an increase in property tax revenues compared to those collected last year.
To calculate the total taxable value for a county, you must add up the total assessed value of each property and subtract each exemption. This element is needed to calculate Utah property tax rates.
Property Tax Rate
As mentioned, Utah has a particular tax system. In this state, property taxes don't always go up or down in relation to property values.
Although there is a relationship between the assessed value and taxes due, something else affects tax bills – tax shifts.
Tax shifts result from broad changes in assessed values. Assuming there's a 10% value increase across the county, a property with a 5% value increase could experience a decrease in taxes.
However, some homeowners will inevitably see a reduction in their property's assessed value but an increase in their taxes.
This happens because assessed values change in different regions and across multiple property classes throughout the county, creating a tax shift.
However, this is just an example. Each case is unique, so you can use this equation to calculate the property tax rate:
- Budget / Taxable value = Tax rate
How Can I Lower My Property Taxes in Utah?
There are different ways to lower your Utah property taxes, and they're all legitimate. Let's check each one:
Do you think your property value is incorrect? Since it determines the property tax amount you must pay, this value must be accurate and reflect the fair market value.
However, if you receive the notice of valuation but disagree with this value, you can appeal the result with the Board of Equalization.
The notice of valuation contains information about the time and date to schedule a hearing before the Board. They're time-sensitive, so you must respect them if you want to appeal your property value.
Additionally, Utah offers several exemptions to help eligible homeowners reduce their Utah tax bills. These are:
- Primary Residential Exemption
- Utah Homestead Exemption
- Utah Senior Citizens Exemption
- Disabled Veterans Exemption
The median property tax in Utah is low, but the tax system is complex. Therefore, homeowners, real estate investors, and property managers should understand how it works and know their tax obligations.
If you know the ins and outs of the Utah tax system, you can create a solid, effective strategy to protect your finances!