Property value increases don’t necessarily equate to higher property taxes

Are you worried that with the rising real estate market, your property taxes will automatically go up? Don’t worry… the Truth in Taxation process in state statute doesn’t allow this to happen. That means that a government entity can’t collect more than they’ve already approved and that the tax rate will go down if your property values increase.

One of the central functions of Salt Lake County government is assessing and collecting property taxes. This creates the revenue source that funds a variety of different functions of government in our community. There are actually five steps in the Salt Lake County property tax process. Here’s a quick primer on each of them.

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First, the county taxing entities create their budgets. You might have seen on your property tax notice that there are a number of different taxing entities providing services to your area (72 throughout the whole county to be exact!). School districts, libraries, water and sewer districts, Salt Lake County operations, and even mosquito abatement are a few examples. Each of these entities receives revenue from your property taxes in order to fund the services they provide.

Second, the Recorder records and maintains all county property ownership. Without these records, we would have no way of knowing and verifying who owns what property. Another essential function of the Recorder’s office is to maintain a consistent chain of title, so the records clearly indicate property transfers from one owner to the next.

Third, the Assessor values all the recorded property in the county. This valuation of real and personal property throughout the county is an integral step, because the taxes generated depend on the value of each property. State law requires the Assessor’s office to assess all property in the county annually.

Fourth, the Auditor (along with the State Tax Commission) calculates the certified tax rate. Here’s a basic example from our Treasurer’s office website:

If the Salt Lake City School District (a taxpayer entity providing a taxpayer service) approved an operational budget of $75,000 and the total taxable value of all property in the Salt Lake City School District was $15,000,000 then, if you live in that school district, the tax rate for the year would be calculated and show up on your official property tax notice as
$75,000 /15,000,000 =.00500.

It’s important to note that when property values go up, the certified tax rate goes down. Conversely, when property values drop, the certified tax rate increases. This insures a steady and predictable revenue source for essential services. Sometimes our residents worry that when their property increases in value, their taxes increase. The Truth in Taxation process doesn’t allow government entities to take more of your money than what was budgeted and approved - even if property values increase.

Lastly, step five: the Treasurer bills, collects, and distributes the roughly $1 billion in property taxes to fund the 72 countywide budgets.

The Utah Truth in Taxation laws keep property tax revenue stable, and provide transparency to taxpayers whenever an increase is proposed. It provides for a fair process and allows us to rest assured that when our property values go up, government can’t automatically take more of our money.

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