Reader comments
As property values go up, appeals surge

I'm first impression is that with all the tremendous federal spending and debt that has occurred that big sucking sound out of our pockets and away from local and state government. If only we hadn't invaded Iraq, I wonder what the money could have been used for? Tax refunds on property taxes maybe?

Americans pay more in local taxes than Federal taxes. The federal government wouldn't give you a tax refund for your local property tax, since they don't charge property tax.

Ut needs a form of proposition 13; the Howard Jarvis initiative that limits yearly increases to a small fixed percentage rate each year. New homes or resold homes naturally are taxed on the present value and then protected by excess tax increases by proposition 13's tax protection provisions.

It is a God send that protects people from being "taxed" out of their homes after paying off a mortgage and living on a fixed income.

I wonder if we had an average house price drop of say 20%, would the local governments live with the decreased revenue or increase tax rates?

Dee,
To answer your question, if average house prices dropped 20% there wouldn't be a decrease in revenue. The tax rate would automatically increase to provide the same revenue as the previous year.

Please read the Truth in Taxation information I linked to in my previous post.

I think there should be limits on the amount that property tax can increase each year. Last year, ours almost doubled and this year they are proposing another $300 hike.

So where's my first comment? Ugh, this is frustrating . . . here it is again:

This is just bad journalism. The article does nothing to explain how property taxes are actually figured and now we're going to get the usual calls for "Prop 13" and other nonsense.

Property tax revenues do not necessarily go up along with property values. In fact, overall property values are NEUTRAL with repsect to property tax revenues. The only way an individual's property taxes will go up is if their home appreciates FASTER than the average in a particular tax district. My personal property taxes actually went DOWN this year even though my valuation went UP by about 14%.

People, please read and UNDERSTAND the following Truth in Taxation information before making uninformed comments about property taxes in Utah.

http://propertytax.utah.gov/about/truth.html

Even the conservative tax watchdog group, the Utah Taxpayers Association likes TNT.

http://utahtaxpayer.blogspot.com/2006/11/truth-in-taxation-works.html

http://utahtaxpayer.blogspot.com/2007/07/property-taxes-part-1-how-truth-in.html

"Truth-in-Taxation is Utah�s most taxpayer-friendly law. It�s even BETTER than California�s Prop 13 (more about that in a later post)." (emphasis added)

Taxation is a part of being a free american, and living without the threat of annihilation by their
dictatorship government or king. We should all embrace the throes of democracy and be appreciative
of our freedom and opportunity to live in a house with roofs and walls. These are not the cases in
Iraq and other places where they would love to have the "taxation burden" that we all like to whine
and complain about. Hug a senator, and show them free love!

I'd agree with you to some extent, jack, except that TNT (guess you can't use the correct acronym in Utah) still allows assessors to determine values, and that can be done vindictively at times. Revenue stays neutral for the county, but not for individual properties or even neighborhoods. (If your taxes went down, that means someone else's went up.) Prop 13 took that randomness out of the assessors hands.

And really, let's stop calling UTA conservative. They oppose taxes going to things they don't like, but they're not committed to smaller government in all areas. To some of us, welfare for millionaires is still welfare.

TNT is the Utah Taxpayers Association's acronym, not mine (as if it really matters).

Assessors are beholden to the public. They are elected officials and if there were widespread "vindictiveness" they would hopefully not be re-elected. Furthermore, there IS an appeals process. If anyone's values are out of line (mistakes ARE made) then they should appeal. As a matter of fact, isn't that what this article is about?

Yes, some peoples' taxes go up while others' go down and others' stay relatively the same. But it's not random, it's based on market fluctuations. I thought convservatives were all about the "market". Yes, there are some anomalies (such as the Huntsville area in Weber County the past few years), but I fail to see how it is unfair to tax everyone on the current market value of their property. If you buy into, or your area becomes, a rapidly appreciating area, then you are gaining a lot of equity.

It is a fallacy that a lot of people are being "taxed out of their homes." There are tax relief measures already in place to help those whose taxes increase beyond their means to pay. I would like to see those measures increased and added to, especially to help out in anomolous situations.

Prop 13 is the exact opposite of fair and equitable. How is it fair to tax two properties of roughly the same value at two wildly different amounts?

Truth in Taxation, for the most part, is the most fair and equitable way to assess property taxes. Prop 13 is just an over-reaction to a relatively small problem.

Prop 13 is more fair and equitable precisely because increases in equity are of no value to a homeowner until they sell the property. Equity does not put money into your pocket, and makes no change in your standard of living - except if your taxes are increased because of it, in which case it DECREASES your standard of living by taking money out of your pocket and giving it to the government.

Under Prop 13, if you borrow against your equity, thereby gaining cash, then your property is revalued according to the current market value. However, if you do not take a new mortgage, then your property stays where it should be - valued at the actual price transacted. A piece of property, for tax purposes, is worth its purchase price and nothing more. ever. Taxes should never be assessed on a speculative basis - they should only be allowed to be assessed on real, hard numbers that have evidence to back them up.

"It is a fallacy that a lot of people are being "taxed out of their homes."" Baloney. Guess it depends on what you consider 'a lot'. One is too many.

You didn't answer the question regarding fair and equitable tax policy so I'll ask again. How is it fair to tax two properties of roughly the same value at two wildly different amounts?

I agree that "one is too many" when it comes to people actually being taxed out of their homes. That is why I referenced the tax relief measures currently in place and said that I would like to see them expanded.

Prop 13 has many problems besides simply being inequitable tax policy. Prop 13 disincentivizes and, in fact, prevents people from moving because they won't be able to afford the taxes on a new home. Prop 13 actually forces some people to stay in the same home forever, probably more often than those who are "taxed out of their homes" under Truth in Taxation systems.

In Utah, Prop 13 would automatically INCREASE taxes by about 50% on many property owners. How? Prop 13 caps tax RATES at 1%. Well, my current tax rate in Salt Lake County is about .0067 (two thirds of one percent). If Prop 13 passed, everyone in Salt Lake County would get an automatic 50 percent increase.

So the appeal deadline for Utah County was Monday @ 5:00?

I'm pretty sure all of Utah had the same deadline Cameron.

I thought I did answer it but I will again.

It is fair because the owners paid wildly different amounts.

If you and your neighbor buy the same car from different dealers, but you pay $3000 less, should you have to pay the same sales tax as your neighbor?

I ask again, how is it fair to tax me as if I'd paid $500,000 for something I only paid $35,000 for? Equity is not real money, and it may not even be permanent (as we will see as the current real estate freefall picks up steam).

Disincentivizes people from moving? What kind of psuedoeconomic doubletalk is that? The issue is people who don't want to move but are forced to by speculative taxation. Prop 13 prevents that. The TNT approach benefits buyers, but does not protect the investment of those who already own.

As far as capping rates, the legislation could be written to cap rates wherever you want to cap them. However, once that rate was established, your tax basis could not be increased unless you took a new mortgage on your existing home, and your taxes could not be increased above the legal limitation.

Maybe I should simplify all that.

You bought a house last year for $100,000. This year, someone buys the very comparable house next door for $500,000. Should you be penalized because your new neighbor is insane?

LOL, you are good at skirting around the issues AS. I'll continue to ask the same questions until you provide an answer based in reality.

Your sales tax scenario is not the same thing. Of course you don't pay the same sales tax as someone who pays $3000 dollars less for a similary valued vehicle. Sales tax is a consumption tax. Property taxes are not consumption based. They are recurring. For your scenario to be valid, you'd have to be paying sales tax every year.

In order to get an answer, maybe I need to provide YOU with a scenario. I bought my house 7 years ago for $150000. My neighbor bought his earlier this year for $350000. Both houses are currently worth approximately $350000. If our tax rate is 1%, then I'll pay $1500 and my neighbor will pay $3500. How is that fair? Why should my neighbor have to pay an inordinately higher amount of the tax burden to provide local services just because he recently moved to the area?

Disincentivizes people from moving . . . I guess a scenario is in order.

Homeowner "Bill" bought his first home 10 years ago for $100000 and pays $1000/year in taxes. He now has a family and has outgrown the home and would like to move. However, housing prices have increased dramatically. A comparable home is now going for $500000. Bill would like a larger home that is going for $700000, but he can't afford to pay an extra $6000/year in taxes (that's $500/month in case you were wondering). Bill is "disincentivized" from moving because he can't afford the TAXES if he does.

Property taxes should only be based on historical values of the property, not current market values. In other words, the tax should be based on the value of the house the last time it was sold, even if it was 25 years ago.

As a mortgage underwriter for California properties(among other states), I would like to disagree that if you do a cash out mortgage on your property your taxes go up. They do not, as this information is not reported to the state(privacy laws and all that). Furthermore, if you transfer to an heir, under Prop 13 there is no increase in assessed value, therefore no increase in taxes.

Where I live (not California), they increase assessed values and tax rates virtually every year, the money goes to the county and gets squandered on the mayor's beautification projects while overlooking the serious infrastructure deficiencies. The elderly pay the same rates as the young, with very little "exemption" from taxes, and the average family pays $350/mo in property taxes.