Real Property Values (and Taxes) Increased?
File Your Utah Property Tax Appeal Before It’s Too Late (September 16th)!
It's that time of year again...the air is crisper, the kids are back in school, the football season has kicked off. And in Utah, it also means property tax appeal season is upon us.
Utah, like most other states, impose tax on property based on the fair market value of the property – the amount a property would sell for on the open market. For property tax purposes, most property is valued by the assessor in the county where the property is located every year on January 1. The county assessor determines the fair market value of a property (the “assessed value”), often by comparing it to similar properties in the area.
“Quick Tip #1 Fair market value is a dynamic, not static, metric. So, assessed values for property taxation can change very year based on what the market is doing.”
Every year around mid-July, Utah counties are required to notify property owners of the change in assessed values of their property. Oftentimes, these notices – the “Notice of Property Valuation & Tax Changes” – are overlooked or ignored by property owners because they are informational only (it is not the actual property tax bill), and no response or action is required. However, it is the information in the valuation notice (i.e., property assessed value) that gives the property owner the potential basis to appeal (and hopefully reduce) its property tax obligation.
“Quick Tip #2 One common misconception about property tax appeals is that a property owner is appealing the property tax itself. However, property owners do not appeal the amount of property tax (or the tax mil/levy rates as applied to their property), but rather they may only appeal the assessed value of property.”
Upon review of the valuation notice (or, if the notice ended up in the trash, upon review of property valuation information available on many county assessor’s websites), the assessed value of your property may seem higher than it should be. This has often been the case in recent years where we’ve seen assessed values of properties in Utah increase by over 75% - 150% in a year. But even in cases of much less extreme increases, if you believe your property assessment is inaccurate, you have the right to appeal. In Utah, the deadline to appeal is generally September 15th (September 16th this year due to the 15th being on a weekend). Below is a step-by-step guide to help you through the process.
Property Tax Appeal Process
1. Understand Your Assessment & Identify Errors
As mentioned above, the first, crucial step is understanding how your property is being assessed by the county. The county assessor’s office should provide (often available on the assessor’s website) a detailed record of property characteristics and how they arrived at your property’s value. Review the record carefully for any errors (i.e., lot use/type, lot size, location, building class, square footage, condition, etc.).
“Quick Tip #3 In Utah, each primary residence, whether occupied by the owner or a tenant, is eligible for the 45% residential exemption (eligible property assessed at 55% of fair market value). While reviewing your assessment and/or valuation notice, also check to make sure your residential property is getting any applicable residential exemption. Application for the residential exemption should be made to the county.”
2. Gather Evidence
To build a strong case, you need evidence that supports your claim that your property is overvalued. This can include:
Recent sales data of your property or comparable properties in your neighborhood.
An independent appraisal of your property.
Photos and descriptions of your property, supporting any county property characteristics errors and/or highlighting any issues that might lower its value.
Assessed values of comparable properties in your neighborhood that are 5% or more lower than the assessed value of your property.
3. File Your Appeal
Each county has its own process and forms for filing an appeal. Visit the county assessor’s website to download or to request appeal forms. Typically, you will need to submit a formal, written appeal. An appeal should include a requested value that is supported by your submitted evidence. Generally, all appeals must be filed by September 15th (or the 16th this year). Make sure to adhere to all requirements to avoid having your appeal dismissed on a technicality.
4. Attend the BOE Hearing
Once your appeal is filed, you will likely be scheduled for a hearing. Hearings often are held via phone or as virtual meetings. Live hearings are now often reserved only for special accommodations and must be requested. The hearing is your opportunity to present your case to the county board of equalization (“BOE”) or hearing officer representing the BOE. Be prepared to explain why you believe the county’s assessment is incorrect and present evidence supporting your requested value clearly and concisely.
5. Follow Up
After the hearing, you will receive a decision from the BOE. If your appeal is successful, your property valuation will be adjusted accordingly and will be reflected on your property tax bill. If not, you may have further appeal options, such as appealing to the Utah State Tax Commission within 30 days of the date of the BOE decision. An unsuccessful appeal to the Tax Commission may be further appealed to district court or the Utah Supreme Court.
6. Consider Professional Help
If the process seems overwhelming, and especially if an appeal goes past the BOE appeal level, you might consider hiring a tax professional, such as a property tax consultant or an attorney who specializes in property tax appeals. They can help navigate the complexities of the process and increase your chances of a successful appeal.
“Quick Tip #4 Utah is considered a nondisclosure state, which means certain real estate transaction data (i.e., sales price) is not public record. As such, county assessors in Utah have to gather their own market data for establishing assessment values. Sometimes property owners will receive “Questionnaires” from taxing authorities inquiring into the details of recent sales transactions. These “Questionnaires” are not mandatory and may be ignored.”
Appealing a property tax assessment can be a daunting process, but it can also lead to significant savings. By understanding the assessment process, gathering strong evidence, and following the proper procedures, you can effectively challenge an unfair property valuation. Remember, persistence and preparation are key to a successful appeal.
Good luck with your appeal! If you have any questions or need further assistance, please schedule a free initial consultation.