Utah’s property taxes are unfair to the poor

Thousands of low-income property owners in Utah face significant excess property taxes each year. Such an overload is just one of many important long-standing problems that exist in the state’s property tax system. Property tax operations are led by the Utah State Property Tax Division, which is a division of the Utah State Tax Commission.

To illustrate this problem, let’s look at how “reverse” homes affect the real estate market and property taxes. Homes that need to be returned are bought in poor condition for a low price, then fully renovated and sold for up to twice the amount used to purchase the home. For example, a house in the past could have been bought for $ 100,000 and then sold for $ 200,000.

In this example, in a properly functioning property tax system, the assessed value of the property when in poor condition “should have” been around $ 100,000. The assessed value of the house in the year following the renovation and sale should have been $ 200,000. However, under the current tax process, the “actual” assessed value of the home before renovation was $ 140,000. In addition, in the year following the sale of the house, the estimated value continued to be close to $ 140,000.

Obviously, based on the facts of this example, both evaluated values ​​were incorrect. The problem is also that at any given time there are hundreds of examples of this situation that can be identified from the data available online.

You might be wondering how the old, dilapidated house received such a high assessed value of $ 140,000 when it was only worth $ 100,000. You might also be wondering why the assessed value of the property was not changed to $ 200,000 after it was sold for that amount?

The answer to why the original appraised value was set so high is that for many years there have been so many old homes turned over every year that the homes turned over made the “average sale price” calculated (and the assessed value) for these houses to be considerably inflated. State and county assessors do not track or consider the “actual” condition of state homes for tax assessment purposes. In addition, the state and counties do not enter the sale price of $ 200,000 for the specific property that has been sold, although this information is often readily available online.

This valuation problem does not seem to affect affluent and well-maintained neighborhoods, as almost all of the houses in these neighborhoods are kept in a similar condition.

The results of this research study were provided to the Utah State Tax Commission. However, the commission did not recognize or take corrective action regarding the reported deficiencies.

It appears that the only authority above the State Tax Commission is the governor. As a result, a report containing this information was sent to the offices of the governor and the lieutenant governor. Upon receipt of this report, “staff” in the governor’s office indicated that the report had been forwarded to the State Tax Commission. According to the governor’s staff, the Tax Commission responded that “the allegations in the report were unfounded.” (Apparently, no detailed answer was requested or provided.)

Governor Spencer Cox has often expressed his sincere and sincere concern for the plight of all of the disadvantaged and marginalized in our society. I truly believe the governor’s comments are genuine. Currently, however, there are thousands of low-income families in the state paying hundreds of dollars more in property taxes each year than they should be paying. The State Tax Commission procedures literally remove food from the tables of needy families in the state simply because the Tax Commission is unwilling to correct the tax inequalities that currently exist in the state and to move away. comply with existing state tax laws.

If you, as a reader, would like to help end the over-taxation of low-income citizens in the state, please call or write the Governor’s Constituent Services Office (and your state officials) and do- let them know that you want these inequalities fixed.

Dean Whitby lives in Weber County. He retired after nearly 40 years in banking audit and regulatory management. The last eight years of his career, he worked for one of the largest banks in the world.

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