What are taxes and how often are properties reassessed in SLC?

Question

Hi there,

I've had a hard time getting a straight answer from lenders / the county on this one so I thought I'd ask BP.

1. Tax Rate: What's the tax rate like in Salt Lake City (looking at South SLC - Sugar House, Millcreek, Highland Park)? Is this as simple as % multiplied by the property value? I've been seeing 1.1-1.2% which would be ~$400/mo on a $400k property. Seems high.

2. Reappraisals: If I buy a property for $350k, put in $50k of work, and now it's worth $500k. How likely is the county to reappraise the property and tax me at $500k versus the $350k I bought it for?

Thanks all!

Tom Swapp · Answer

@Armand Farrokh I live in Millcreek. That tax rate is about right. Mine is 1.4% but there is an exemption for residential property so it's taxed at 45% of assessed value. So assessed value * 45% * tax rate = tax amount. And assessed value is less than FMV by more than 10% (at least they are in my area).

I don't have experience with reassessments but I would think that if you pulled permits for a large reno then you'd get reassessed the next year. Otherwise I would not expect a big reassessment and would not expect one for at least a year after any reno.

Hope that helps some.

Tom

Tyler Rowland · Answer

James you are correct on the investment property tax exemption.  Basically the state wants to see that it is a long term residence for someone, whether that is you or the tenant; Before they issue the primary residence tax status.  Second homes and properties with short term rentals do not enjoy the same tax break.

Tyler Rowland · Answer

@Armand Farrokh  Tom Summed up the tax rate in SLC pretty good.  So in your case the 400K would be mulitiplied by 45%, and then that number ($180,000) is going to be subtracted from the value (180K - 400K = 220K).  If your tax rate is 1.2%  it would be .012 X $220,000 = $2,640.

As Tom said the 45% is an exemption for primary residences.  In the state of Utah, you are allowed one exemption.  There are ways that the county verifies that it is your primary residence.  Mailing address, where your vehicles are registered, address on the drivers license, and many other ways that they deduct where your primary residence is.

As far as the renovation goes.  The only way the county is going to know that you put 50K of rehab into a place is if there is a building permit taken out.  Obviously, its important to get the work done by someone that knows what they are doing.  But if you are painting and replacing a floor, or something that does not need a permit,  then you get that break and your house is still considered to be the same value as before the rehab.  The next accurate assessment of the property is going to come when the home is purchased or refinanced, and the deed is recorded.

The tax rates by county are below.  remember to include the 45% exemption if it is a primary residence.  If not, just times the assessed value by the tax rate, and you will have your yearly taxes.

https://slco.org/contentassets/3cf8a3af8f3a4c679b8a9b2c98626d33/taxratesbyarea.pdf

James Brunt · Answer

Hi Tyler,

You mention only getting one residential exemption however based on below it seems as if you still qualify for the exemption if a tenant is in the property for 183 days.

“if you own an investment property and it is occupied by a tenant for at least 183 consecutive days in the year, that home also likely qualifies, but an application to the county is usually required to receive the exemption in that circumstance”

https://propertytax.utah.gov/m...I’m looking to purchase an investment  property however having the 45% deduction (or not), has a big impact on cash flow.I’m hoping you or someone else on the forum can give some guidance.Many thanks

Jim

Tyler Rowland · Answer

They will stay at that same assessed value when you bought it until the taxes are reassessed.  If your taxes are going into escrow, they servicing company may up what they collect for taxes and insurance if the taxes are reassessed higher.  So always keep that in mind.

Armand Farr · Answer

Super helpful @Tyler Rowland and @Tom Swapp. Last question - let's say a property has been assessed for the last few years at ~$200k and the current owners pay taxes at that rate.

If I buy it today for $400k, will the county automatically charge us taxes on the $400k value? Or can we carry over the $200k assessed value?

What are taxes and how often are properties reassessed in SLC?

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