- Utah's property tax burden has increasingly shifted to homeowners, a new audit shows.
- The property tax burden on Davis County's residential property owners, for instance, increased from 65% of the total in 2015 to 74% in 2024.
- The audit recommends moves to clarify virtual participation in property tax hearings and change governing verification of primary residences for taxation purposes.
SALT LAKE CITY — The property tax burden in several Utah counties has increasingly shifted to homeowners, leading in some instances to higher property tax bills for the population.
In Davis County, for instance, the share of property taxes paid by residential property owners rose from 65% of the total in 2015 to 74% in 2024. The residential share increased from 62% to 70% in Weber County, from 60% to 64% in Utah County and from 56% to 58% in Salt Lake County.
"The last five years saw several economic impacts that contributed to a type of perfect storm for increasing the amount of taxes homeowners pay," reads the audit by the Office of the Legislative Auditor General, requested by Utah lawmakers and released Tuesday.
The report pointed to jumps in home valuations in the early 2020s and a spike in 2023 in funding earmarked for public education due to a decision by state lawmakers to freeze the state tax rate used to generate such revenue for five years until 2023. The flat rate combined with gradually increasing home values resulted in an extra $326 million in funding in fiscal year 2023 alone, nearly 60% more than the $206 million that had originally been expected.
The report further noted reductions in values of some centrally assessed properties, which include certain mines, utilities and railroad properties, thereby boosting the burden on homeowners, at least in some locales. "In some counties, this is more of a concern than others, making this largely a local issue," reads the audit.
While the increasing tax burden on residential property owners was one of six key findings of the study — which covered a broad range of property tax issues — it provided no recommendation on the issue. The two recommendations in the report, instead, center on the truth-in-taxation process and the process used to grant property tax exemptions on homeowner-occupied homes.
More specifically, the report says the Utah Legislature should consider "clarifying the meaning and intent of virtual participation" in truth-in-taxation hearings, the public meetings cities and other taxing entities are required to hold when considering property tax hikes. The report noted the varied interpretations from taxing entity to taxing entity in what virtual participation entails and "confusion" on the issue.
The report also said state lawmakers ought to consider legislation giving counties more leeway to enact laws to help them verify which homes are primary residences — that is, homeowner-occupied — and thus entitled to the 45% state property tax exemption. Secondary residences, which include vacation homes and short-term rentals, are not entitled to the 45% exemption.
"A legislative concern expressed to us is that secondary homes (usually short-term rentals) are not being appropriately designated as such. This could impact the tax burden of primary homeowners," the audit reads.
Utah's Legislative Audit Subcommittee, made up of state senators and representatives from both parties, sought the audit. The auditors' efforts, the document states, "focused on the function of truth in taxation at the local level and on understanding the factors that have contributed to a public perception of increasing property taxes."
At any rate, auditors reported no major issues with the truth-in-taxation process, notwithstanding the recommendation to clarify what constitutes virtual participation in truth-in-taxation hearings.
"Overall, Utah's truth-in-taxation system is working as intended: Collections generally align with budgets, discrepancies are minor and the property tax division has recently denied some property tax increases due to truth in taxation noncompliance," the report said in its concluding remark.
That said, it noted problems when cities, school districts and other taxing entities hold off on seeking property tax hikes and then pursue dramatic, one-time increases, which can prompt strong public backlash.
The audit further referenced the decision of the Utah State Tax Commission's Property Tax Division to deny requests for property tax hikes of 35 cities, school districts and other taxing entities for fiscal year 2026. The division rebuffed the requests, per directives spelled out in two new laws that took effect this year, because the entities didn't comply with guidelines governing the process.
While calling the Property Tax Division findings "concerning," it also lauded the entity's action.
"We believe that requiring the division to hold entities accountable for meeting truth-in-taxation requirements provides a control against potential abuse," the audit reads.
The audit also referenced the inability of taxing entities to boost taxes to offset inflation without going through the truth-in-taxation process. Lawmakers, the audit said, could allow for "an automatic inflationary adjustment" in tax rates from year to year as cities, school districts and other entities are crafting budgets, to preclude the need to go through the truth-in-taxation process.
