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Herriman Journal

Government 101: How does your city know how much property tax to collect?

Nov 23, 2021 01:25PM ● By Erin Dixon

By Erin Dixon | [email protected]

Each year, Salt Lake County sets a new property tax rate for each city. First, a city will receive the same dollar amount as the previous year. If they received $15 million from property taxes in 2020, the city will receive $15 million from those same property owners in 2021.

The property tax rate then calculated is set based on the values of all the properties in that city. If values go up, the tax rate decreases. If values go down, the tax rate increases.

If there has been any population growth, the city will receive extra.

“New growth adds to the city revenue at the same property tax rate as the other properties and becomes part of the calculation the next year,” West Jordan Finance Director Danyce Steck said. 

If a city collects $15 million in 2020, they may collect $15 million and an additional $200,000 if there is new growth in 2021. Then 2022 would bring the city $15,200,000.

Any time a city wants to do a different rate than set by Salt Lake County, a truth-in-taxation meeting that involves the public is required. The rate change can only happen once a year.

Because the property tax rate, the percentage, changes year to year, if the city “raises taxes,” the percentage owners will pay is not always higher for the residents than it was in the past. 

Councils usually consider adjusting the rate when the income of the previous year is not enough to pay for what is needed in the next year. 

For example, West Jordan performed the truth-in-taxation process this year. Last year their tax rate was 0.1899%. The county then set the new rate for this year at 0.1732%. The council raised this year’s rate by 3.2% and properties will now pay 0.1788%.

Residents pay less than commercial property owners.

“All property’s value is set by Salt Lake County, but residential properties receive a 45% discount. This discounted value becomes the taxable value and is used to calculate the property tax bill,” Steck said.

 

Residential

Business

Assessed Value

 $ 350,000

 $ 350,000

Less: 45% Residential Discount

      (157,500)

                  -  

Taxable Value

 $ 192,500

 $ 350,000

Multiplied by: Property Tax Rate

0.001788

0.001788

Property Tax Bill

 $ 344

 $ 626

 

 

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