Utah property-tax burden creeps up

Property taxes on Utah homes remain low compared with other states', a new study shows.

But perhaps because Utah home values have not dropped as drastically as in other states during this severe recession, Utah property taxes have crept up a bit in a state-by-state ranking, the Tax Foundation found.

In recent years, Utah has ranked 34th among other states and the District of Columbia. But based on taxes and median home prices per state for 2008, Utah's ranking rose to 32nd, the foundation, a national tax-research group, reported in data released this week by the Census Bureau.

The median house in Utah costs $236,000, with an annual tax bill of $1,338.

Historically, Utah officials have kept homeowner property taxes lower. Experts say that's in part due to the state's Truth in Taxation law, which requires local property-taxing entities — like school districts, cities, counties and special districts — to hold a public hearing before raising tax rates.

But it is also due to the fact that Utah families strive to own their homes but have lower incomes than other Americans, placing an extra burden on their ability to pay home property taxes. Accordingly, Utahns hate property taxes and lobby their elected officials to keep those taxes low.

Like most other states, Utah gives a tax discount on primary residences — now set at 45 percent. (The study looked at owner-occupied houses and excluded vacation homes or investment properties, like many houses in Park City.)

A general goal in homeowner property taxes is that one shouldn't have to pay more than 1 percent of a home's market value each year in taxes.

Utah does fairly well in that category, as well, with homeowners statewide on average paying a 0.56 percent tax rate, ranking 40th among the states.

Utahns also do well in homeowner property taxes as a percent of income. The foundation found that each year, the median Utah family will pay 1.96 percent of its income in property taxes, ranking 36th among the states and District of Columbia.

In general, property taxes on homes are the highest in the Northeast and parts of the Midwest, the foundation's report said.

One clear comparison: The state with the highest residential property taxes is New Jersey. The median house there costs $364,100. The tax rate is 1.74 percent, making the median property-tax bill in New Jersey $6,320.

Louisiana has the lowest property taxes in the U.S. (The state is still suffering from hurricane damage.) The median house there costs $132,400, the tax rate is 0.14 percent, and the median tax bill is just $188 a year.

The median home price means half the houses were above that price, and half below it.