Carbon County officials wished to inform residents of a change as the annual Notice of Property Evaluation and Tax Changes arrive in the mail near the end of July.
The county explained that while neither the tax rate nor the county budget are increasing, the rise of market values of homes in the area is leading to an increase in the taxable value of homes, which may also change taxes in centrally assessed and commercial properties.
It is no secret that since 2020, the Utah housing market has had record breaking increases in the prices of homes across the state. The median sale price of a home in Carbon County alone has increased roughly from 65% from April of 2020 to April of 2022. As the sale prices continue to increase, the market value of homes also increases. Due to the taxable value of homes increasing, the payable taxes may also increase.
This will be reflected on the form when it is received in the mail. However, county officials wished to dive deeper into property tax revenue, how the local real estate market affects a home’s value and how the local assessor uses that information to determine the tax value of a home.
Governmental taxing entities receive a portion of revenue from property taxes, which can be broken down into three broad types of taxpayers. These types are centrally assessed, commercial and residential. The property tax base is created by the taxing entities and, as the different categories change, the sizes also change. This means that some areas can begin to contribute less to the overall revenue, shifting the burden to the remaining two.
The shifting is required by Utah state law to keep the revenue whole, the county explained. Over the years, the centrally assessed tax revenue has decreased due to various industries seeing a decline, such as mining and power plants. More of the burden then goes to the residential and commercial entities.
The real estate market affects home values as the fair market value is theoretically the value at which a property would sell for. As supply and demand continues to rise, the market value statewide does as well. The state of Utah requires that the county assessor appraises the residential properties between 95% and 105% of the fair market values. If not, the state will force the assessor to increase or decrease the value accordingly in order to obtain the appropriate taxable value of the residential property.
Part, or all, of the fair market value may be exempt from taxation under Utah law. Residential properties that serve as primary residents of any household are taxed at 55% of the fair market value. Secondary residences and unoccupied homes are taxed at 100%.
With the decline in centrally accessed tax as well as the surge in the fair market value of properties, the residential piece of the taxing entities has grown for the 2022 tax year. This change will be reflected on the form that taxpayers in Carbon County will receive next month.
Additional tax information can be found at www.carbonutah.com. Questions can be directed to the county assessor at (435) 636-3248 or assessor@carbon.utah.gov, or to the clerk/auditor at (435) 636-3228 or clerks@carbon.utah.gov.