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Loading...Let’s take another look at property value and property tax for 2022.
Some Tooele County residents suffered from sticker shock when they opened up their valuation and tax change notices from the county last week.
Overall, the total value of property in Tooele County went up by 44% comparing Jan. 2022 to Jan. 2021. Some individual property values went up more, some went up less.
The Tooele County Assessor is charged by state code with determining what the fair market value of each parcel of property was on Jan. 1 of each year.
The Utah State Tax Commission monitors those valuations and uses several different measures to make sure the assessed values are realistically close to the fair market value.
The 44% increase in assessed property values in Tooele County corresponds with a 46% increase in the median sales price of a home in Tooele County from Jan. 1, 2021 to Jan. 1, 2022.
The 46% is an unprecedented growth in sales price and the 44% growth in assessed property value is also an unprecedented increase.
As property values jumped so high, the valuation notices showed that for some taxing entities property taxes also jumped way high.
That’s where the state’s certified tax rate comes into play.
As property values go up, the certified rate goes down. The net result is the taxing entity gets the same amount of revenue as it did the previous year, with some additional revenue from new properties that weren’t on last year’s tax rolls, not from increased values, that’s called “new growth.”
For example, a sample random property in Tooele City — a 1,165 square feet above ground and a 1,131 finished basement home on 0.18 acre son the east side of town with three bedrooms, two bathrooms, kitchen with dining area and a living room upstairs and two bedrooms, one bathroom, a family room and storage room downstairs with a two car garage on the east side of town — was valued at $274,219 in 2021 and $403,135 in 2022, a 47% increase, slightly above the 40% average increase for Tooele City.
The owner paid $417 in property tax to Tooele City in 2021. At the certified rate for Tooele City for 2022, the property owner would pay $445 to Tooele City in 2022, a 6.9% increase.
Under the proposed rate, which is the same rate as the city set in 2021, this property owner would pay $613 for property taxes to Tooele City in 2022, a 47% increase.
Looking at the property values and taxes en mass, in 2021 the taxable value of property in the Tooele County School District was $5,938,751,184. In 2022, that total value was $7,960,134,874, a 34% increase.
The school district’s property tax revenue in 2021 was $50,477,576. At the certified rate for 2022, before adding revenue for new growth or the state’s increase in the basic levy, the school district’s property tax revenue for 2022 would be $51,161,218, a 1.3% increase in revenue with a 34% increase in property values. Adding in $1,701,499 for new growth and $2,883,145 from the state’s basic tax rate, the school district would net an additional $4,584,644 in revenue, without an increase in locally controlled tax rates.
A group of county assessors, including Tooele County Assessor Jake Parkinson, wrote to state lawmakers recently with some observations and concerns about the certified rate system.
The big ball of assessed property that is used to calculate the certified tax rate is made up of different kinds of assessed property.
There is “real property,” which includes land of all kinds along with buildings and any improvements on the land and stuff tethered to the property like water rights, rights-of-way, easements, rents or income.
There is “personal property,” usually business personal property, which are things used in a business or to produce income. It includes such items as furniture, fixtures, office equipment, appliances, tools, machinery, signs, supplies, and equipment leased by the business.
And finally there is “centrally assessed” property. The centrally assessed team within the State Tax Commission’s Property Tax Division values all mines, airlines, and utilities, and all railroad properties that operate as a unit. Values are set and apportioned to taxing entities based on the physical location of property.
Parkinson points out that within this collection of property, especially within the last two years, real property — especially residential property — has increased in value greater than other kinds of property.
As a result, as the certified rate is calculated each year, residential property carries a higher burden of the tax load on property.
In 2021 real property made up 80.8% of the total taxable value for the Tooele County School District. In 2022, real property was 85.8% of the district’s total taxable value. Leaving real property owners, especially residential owners, with a higher burden of the property tax load.
