How Property Taxes Work
By Rod Mann, Utah County Auditor
“Owning property comes with ongoing financial responsibilities, one of the most significant being property taxes. These mandatory payments fund essential public services and infrastructure. Without them, local government functions would struggle to operate. “Property taxes are enforced by state and local governments, with authority derived from state constitutions and statutes. These laws grant municipalities the power to collect revenue from property owners, ensuring a steady funding source for public services. “Property owners benefit from services such as law enforcement, fire protection, and road maintenance, which help maintain property values and community stability.” — Accounting Insights, 25 Feb 2025
In Utah property tax rates are determined using a methodology unlike any other state. In very simple terms the effect of this is that a taxing entity revenue only increases if there is growth (i.e. development) with their boundary. Generally, the amount of property tax you pay to a specific entity will not change from year to year unless that entity requests a tax increase.
There are exceptions to this general rule. For example, if residential property appreciates by 20% year over year and commercial property appreciated 10% then residential property owners will pay more tax and commercial property owners end up paying less tax in the new year. The taxing entity's net revenue does not change, other than revenue attributable to growth. Click here for an explanation of how property tax rates are calculated that includes a short video.
Property tax revenue is not connected to inflation (click here to see the impact of inflation on Utah County's property tax revenue coupled with tax increases/tax increases). It does increase when development occurs. However, with growth come increased costs in most county departments. Here are some examples:
- Assessor: More property to assess and appeals to review
- Attorney: Increased population generally equates to increased criminals to prosecute
- Public defender: Increased prosecutions results in an increase in demand for its services
- Sheriff: Increased crime impacts both corrections and enforcement
- Treasurer: More tax notices to send out and payments to process
The need to increase property tax even as costs increase is mitigated by items like:
- Property tax revenue accounts for 40% of county revenues
- The county has other revenue sources that do rise with inflation such as sales tax and fees. Fees, unless set by the state, are only supposed to cover the costs of the associated service so they can go up or down over time.
- Improvements in efficiency due to improved processes or automation can reduce costs.
Occasionally we compare ourselves to others in various aspect of our lives. Click here to see how Utah County's property tax rate compares to counties in Utah with a current population of 200,000 or greater.
If you have additional questions about property tax please feel free to contact me directly.
Links in this post:
- Explanation of how property tax rates are calculated that includes a short video.
- Impact of inflation on Utah County's property tax revenue coupled with tax increases/tax increases.
- 2024 County General Fund revenue breakout.
- Comparison of Utah County's property tax rate with other counties in Utah that have a current population that exceeds 200,000.