Property taxes…

I've been seeking change in Utah's property taxes for more than a decade. Our residential property tax system needs to be fixed. My ideas of what could correct the property tax system are largely modeled from Prop 13 in California (I like to point out that Howard Jarvis initiated Prop 13, and he was a Utah native). While I'm not particularly eager to borrow anything from California, I think this plan brings his idea back to Utah.

My property tax change ideas are specific to residential rather than commercial. Commercial also needs a revised plan, though there are more viable solutions than modeling it identically to residential. It's essential to have a fair and effective system in place that benefits both homeowners and the community as a whole.

Last year, while fighting the property tax increase, I searched many property parcels, including commercial. I noticed that most commercial assessments didn't go up; if they did, it was minimal. I also noticed that many went DOWN. I found these details odd, but I was so focused on residential that I tabled these curiosities. Researching commercial in Utah is complicated because several years ago, one of our larger commercial brokerages left our MLS system—another tabled curiosity.

Over the past few months, I've escalated my approach, reaching out to any of our representatives who will listen to determine WHY our leaders have yet to be interested in correcting our broken property tax system. 

Dan McCay proposed two bills in this year's 2023, legislative session. Both bills did not pass. One of them, SB228, wanted disclosure of the purchase price on sold property, the disclosure reporting only to the assessor. For those who don't know, Utah is a non-reporting state. Our real estate sale prices are not publicly available. I've always been on board with disclosing the purchase price to the assessor; the assessor already has access to our MLS, but they aren't allowed to use the sale price directly as their formulation for coming up with valuations. This is ridiculous. Allowing the assessor to utilize the information they already see makes more sense, using "actual" market values in the most accurate form (as opposed to an estimated valuation).

Additionally, Dan McCay proposed a piggyback bill (or a companion bill) to join with SB228; the companion bill is SJR1 which would amend the Utah Constitution (subject to a public vote) and prohibit any transfer tax on property. This bill was essentially created as a truce to the powerful commercial sector. I stumbled upon an article from March 2023, and suddenly, my tabled curiosities morphed into center stage. The article noted that several of the state's largest commercial real estate brokerages were against any disclosure law changes. Lew Cramer, CEO at Colliers International in Utah, said, "Our main advantage is competitive information" and "We are reluctant to have those shared with the world."

Here I am, swinging at this pinata. I am swinging with a bright flashlight, so hopefully, the light will shine some clarity. Shine the Light Property Tax

The disclosure bill (SB228) was intended to send sale prices (for both residential AND commercial) to the assessor, making Utah a "partial" disclosure state. Why all the pushback? Why is the commercial sector so adamantly opposed to disclosing sale prices? Commercial Brokerages pulled away from the MLS, thereby stonewalling the assessors from having readily available sale information necessary in assessing values, which causes more pressure on residential. Residential allows assessor access to sale prices, so the fairness in valuations is lopsided in favor of the commercial sector as there is limited data available from commercial.

I asked Neil Walters how he felt about the property tax changes I wanted to achieve. He opposes any Prop 13 style changes for Utah; interestingly, he is the Chief Executive Officer of a national Commercial Brokerage. He said he would prefer to fix and correct the existing framework rather than start over.

He isn't wrong, I'd prefer to correct it too, but it's too deep in a murky swamp to fix. It's imperative that we establish a property tax system that is both equitable and transparent. The current system is complicated, with numerous entities vying for a share of the property tax revenue. Each entity has its own budget and financial requirements, and as a result, the homeowner is left every year with an unknown financial burden to bear. There is a dire need for accountability from all entities who are receiving their piece of the pie. If property taxes were set based on the ACTUAL purchase price and had a cap on how much they could rise each year, this would provide stability for homeowners and prevent any sudden and unexpected increases. Taxing entities should be accountable to the people they serve, and I hope to see more of this thinking in the future.

We need a fair and transparent property tax system that treats homeowners and commercial properties equally. Leaders should listen to their constituents and overhaul the current system. Let's level the playing field and hold taxing entities accountable, not homeowners.

Contact Paula Smith

Paula Smith RealtyPath St George

I am Paula Smith, Associate Broker with RealtyPath of St George. I have been a licensed, full-time real estate agent in Southern Utah since 2006. I have been selling residential real estate during all of the changes in the market and witnessing our St George area become one of the fastest-growing cities in America. I keep my finger on the pulse, paying attention to market conditions. If you're ready to buy or sell, I'm ready to make it happen.

Paula Smith connect with Facebook Find Paula Smith on Facebook