Here’s why property taxes are on the rise in Utah

A Utah legislative audit report found that a “perfect storm” has led to an increase in property taxes for homeowners as Utah continues to have a higher overall tax rate than most Republican-led states.

Inflated home prices after the COVID-19 pandemic were identified as one of the primary drivers of increased property taxes, auditors told the state Revenue and Taxation Committee on Wednesday.

Over the past decade, the taxable value of Utah homes tripled from approximately $126 billion to $375 billion, while the number of new residential properties grew by just 200,000, an increase of less than 20%.

This jump in home prices did not apply to commercial property values, causing the burden of property taxes collected in the state to shift toward residential properties. In some cases, like in Davis County, the increase in these taxes was as much as 10% since 2015.

How a decision by the Legislature led to higher property taxes

As Utah home values surged, particularly between 2021 and 2023, an unfortunately timed policy decision by the Utah Legislature placed a five-year pause on adjusting the state’s “basic levy” property tax for inflation.

Property taxes in Utah are calculated to produce a certain amount of revenue, instead of using a fixed tax rate. So when home prices — and property tax revenue — go up, rates are supposed to come down.

But in 2018, the Legislature froze the basic levy tax rate to increase public education funding, at what turned out to be maybe “the worst possible time,” said state Sen. Dan McCay, R-Riverton, who chairs the tax committee.

“The Legislature itself has been an issue because they did a five-year automatic tax increase for people in 2018,” Wasatch County Council member Luke Searle said. “So they’re just as much to blame as any local entity.”

School or fire districts can also freeze their property tax rate, Searle said. But Wasatch County has avoided doing this after a survey found that one of the top-three priorities for Wasatch voters was keeping property taxes low.

The median home price for a single-family home in Wasatch County has risen to nearly $1 million, forcing some elderly residents to start to pay more in property taxes than they ever paid on their mortgage, according to Searle.

What can be done to lower property taxes?

The state and some counties have created tax deferral or abatement programs to help seniors or those on a fixed income receive property tax relief. Others think the solution lies in cutting government spending.

Washington County commissioner Victor Iverson said as counties struggle to find revenue streams aside from property taxes, state lawmakers can be more careful about increasing state expenditures.

Since 2000, Utah’s state budget has more than doubled, even after accounting for inflation, while the population has increased by less than 60%. Utah taxpayers are “tapped out,” according to Iverson.

“Property taxes are one of the forms of taxation that really people feel probably more personal, maybe a little more emotional, than, say, sales tax or even income tax,” Iverson said.

The Utah Legislature has now cut the state’s flat income tax rate four years in a row, down to 4.5% in 2025. But some activists worry cutting the income tax will shift the tax burden in a more regressive direction.

Property taxes have disproportionate impact on lower-income Utahns, which is why so many municipalities have put off property tax increases, said Maurice Hickey, the executive director at Voices for Utah Children.

If the state continues to cut the income tax — which is largely used to fund education — then revenue will have to come from somewhere else to cover basic government functions, Hickey said.

“In the case of Utah, where do we make up that difference? And I would argue, we can’t,” Hickey said. “You would have to raise property taxes so high that it would just destroy the housing industry and the economy.”

Where does Utah rank in terms of taxes?

While Utah has the 12th lowest rate of government spending per capita in the nation, conservative critics have pointed out that the state has a higher tax burden than average.

A 2025 WalletHub study found that Utah had the 14th highest tax burden in the country when the sales, property and income tax rates were considered as a share of personal income.

A similar analysis by the Tax Foundation, using 2022 data, found that Utah had the 11th largest combined state and local tax burden per capita as a percentage of income.

“Utah does have a higher than average tax burden, especially among conservative states,” said Jared Walczak, vice president of State Projects at the Tax Foundation, in an interview with the Deseret News.

However, a more comprehensive study done by WalletHub, which took into account real estate, vehicle and excise taxes, found that Utah actually had the 14th lowest effective tax rate compared to median household income.

Utah also has one of the lowest property tax rates in the country as a percentage of home value. In 2023, Utah ranked fifth-lowest in the nation, according to Tax Foundation calculations.

From the standpoint of economic growth, property taxes are actually by far the most efficient form of taxation, according to Walczak. However, they are unpopular because they are the most visible tax for homeowners.

This is why Utah must maintain its “three-legged stool” approach of balancing income, sales and property tax so no group is overly burdened, according to Utah Taxpayers Association President Billy Hesterman.

Amid inflation, counties and school districts will likely have to increase property taxes to keep up, Hesterman said. But he believes Utah’s booming economy has created an opportunity to continue to lower the income tax.

Lawmakers should incrementally bring the income tax below 4% to remain competitive with neighboring states, Hesterman said, adding that this must be combined with more careful spending.

“We think all elected officials should be looking for ways to stretch the dollar further,” Hesterman said. “Asking for more should be the last resort of any elected official.”