What is Happening with Property Taxes This Year?
Every year there are many different factors that contribute to changes in property tax amounts for individual parcels. Here are four of the most important.
1. Taxing entity tax increases:
This is when a particular taxing entity (for example: a city or town, the county, school district, cemetery district or other special service district) increases the amount of taxes that they are requesting. This is an increase in the entity's budgeted income from property taxes to cover an increase in anticipated expenses. To do so, the entity must notify the public, notify individual parcel owners, hold a public hearing and enact the change in a public meeting. These changes only affect the parcels that lie within the boundaries of the taxing entity's taxing area. For example only residents of Castle Valley Town would be affected by an increase in the town's budget but all parcels in the county would be affected by an increase in the school district's budget.
What's happening in 2021? The following taxing entities are proposing to increase their budgets. Please contact these entities directly with questions about why they are proposing an increase (links below).
- Moab City - only affects parcels within the city's boundaries.
- Grand County School District - affects all parcels in the county.
2. Valuation changes to your parcel:
When your parcel is reassessed and the valuation of your parcel changes, this usually changes your property taxes. When market values are increasing, you will usually see an increase in your valuation and a resulting increase in your property taxes. However, this does not mean that the taxing entities get more money. When you pay more due to a valuation change, other property owners who were not reassessed pay less.
What's happening in 2021? Parcels located in Spanish Valley (district 2) were reassessed and many parcels have seen dramatic increases in value. This is due to market values increasing and reflects an increase in the amount for which these parcels could be sold. Parcels outside of Spanish Valley may have also been reassessed for various reasons including improvements to a parcel that require a building permit.
3. Valuation changes to other parcels:
A different area of the county is reassessed at least once every 5 years. When your turn comes around to be reassessed you may see an increase in your taxes. In years when other parts of the county are reassessed you may see a decrease. There are several other reasons why a particular parcel may be reassessed including a newly built improvement or a directive by the State. Centrally assessed parcels are assessed every year by the State and include oil/gas operations, utilities, pipelines, airlines, mining operations and other industrial operations. Changes in the valuation of these parcels effect residential and business parcels in the rest of the county. When centrally assessed values go up, everyone else's taxes go down and vice versa.
What's happening in 2021? Districts other than Spanish Valley, will benefit from the reassessment and downward pressure on the tax rate. Centrally assessed parcels saw an overall increase in valuation this year which will also benefit all other parcels.
4. Change in the primary residential exemption:
Primary residences, and up to 1 acre of land with them, receive a 45% reduction in value which results in a 45% reduction in taxes owed. If your parcel's status as primary residential is changed, you will likely see a dramatic increase in taxes owed. Long term renters can make a parcel eligible for the exemption. It doesn't have to be the owner's primary residence as long as it is someone's primary residence. Contact the Assessor's Office for questions about this exemption.
Here are some other factors that influence property taxes every year:
- The five year average of the collection rate - The collection rate is the percentage of taxes requested that are actually collected. An increasing collection rate puts downward pressure on the tax rate and vice versa.
- The five year average of changes due to Board of Equalization (BOE) appeals - Every year changes are made to parcel valuations when a property owner appeals to the BOE. An average of these changes is factored into the certified tax rate.
- Tax relief - Some property owners qualify for tax relief based on certain criteria. See this page for more information: Tax Relief.
- New growth - Some increases in value are categorized as new growth and don't put downward pressure on the tax rate. Instead these value increases are allowed to increase the budgets of the taxing entities. When a new home or business is built, the taxing entities presumably have to provide them with services and therefore have more expenses.