Local Option Property Tax Deferral for Seniors, Disabled, and Indigent

State

Utah

Year

2022

Variations in Receipt of Benefit

No Variation in Receipt of Benefits

Benefit Type

Deferral

Benefit

The benefit is a deferral of all property taxes. The deferred taxes and interest constitute a lien against the property. Individuals who fit the state's definition of "indigent" may not have their property subject to a tax sale if they participate in the deferral program.

How is Benefit Disbursed

Other

Eligible Property Type

Residential

Characteristics of Eligible Property

The property must be an attached or detached single-family residential property.

Eligibility Criteria

Age

Disability

Homeowner

Income Ceiling

Principal Residence

Property Value Limit

Wealth Limit

Surviving Spouse

Description of Eligibility Criteria

The applicant must be 75 years old or older. Every holder of a mortgage or trust deed on the property must provide written approval of the application. The applicant's "liquid resources" in the prior year must be less than 20 times the prior year's tax liability. When determining if a deferral shall be provided, a county must consider an asset transfer to a relative by an applicant for deferral if the transfer took place during the three years prior to the application date. The applicant must not be the owner of income-producing assets that could be liquidated to pay the tax. The applicant's household income must be below 200% of the maximum household income that would make someone eligible for the Utah homeowner's credit, meaning that in 2022, the applicant's 2021 income may not be greater than $71,615. The market value of the home must be less than the median property value of attached and detached single-family residences in the applicant's county unless the applicant has owned the home continuously for the previous 20 years. The county must treat the grantor of a trust as if they were the owner of the property if the grantor can prove all of the following: (1) that title will transfer to them upon the exercise of a power by the claimant as grantor of the trust, a nonadverse party, or both; (2) the title will revest regardless of whether the aforementioned power is a power to revoke, terminate, alter, amend, or appoint; (3) the applicant is obligated to pay the taxes on that portion of the trust property beginning January 1 of the year the claimant claims the deferral or abatement; and (4) the claimant satisfies the requirements described in this part for deferral or abatement. In order to be considered "indigent" and have their property protected from a tax sale as a part of the deferral program, an individual must meet all of the following criteria: (a) be 65 years old or older; or have a disability; or the county finds that extreme hardship would prevail on the individual if the county does not defer or abate the individual's taxes (b) have a household income below 200% of the maximum household income that would make someone eligible for the Utah homeowner's credit ($71,615 for 2022) (c) reside for at least 10 months per year in the residence subject to deferral and (d) be unable to pay the tax when the tax is due.

Local Option in Adoption of Program

Local government must take action to opt in

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

Counties must apply to the Utah State Tax Commission to receive reimbursement. Counties shall receive full reimbursement from the commission only after they grant a deferral. Counties will not receive reimbursements for taxes assessed after 12/31/2026. When the lean on the property is satisfied, counties must return the exact amount of the lean back to the Utah State Tax Commission, which will then be deposited into the general fund.

Record ID

UT108_RR22

Footnotes

Effective 01 January 2022: Added age requirement, added income requirement, added liquid resources requirement, and added property value limit for applicants who have not owned their properties for 20 years or longer. These changes were passed on 04 May 2022 and took effect retroactively. These changes are pursuant to 2022 Utah Laws ch. 242 (SB25). Effective 01 January 2022: The interest rate is changed from the federal funds rate not to exceed 6% to 50% of the sum of 6% and the federal funds target rate such that interest is between 7% and 10%. This change was passed on 04 May 2022 and took effect retroactively. This change is pursuant to 2022 Utah Laws ch. 242 (SB25). Effective 01 January 2022: The state will reimburse counties for lost revenues until 01 January 2026. This change was passed on 04 May 2022 and took effect retroactively. This change is pursuant to 2022 Utah Laws ch. 242 (SB25). Deferred taxes accrue interest at a rate equal to 50% of the sum of 6% and the federal funds target rate established by the Federal Open Markets Committee on the preceding January 1st, so long as the rate is not less than 7% or more than 10%. Deferred taxes become due when the owner sells or otherwise disposes of the property Liquid resources include cash on hand, money in a checking or savings account, savings certificates, stocks or bonds, and lump sum payments. They do not include household income. A relative is a spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, first cousin, or a spouse of any of these individuals.

Sources

Utah Code § 59-2-1208
Utah Code § 59-2-1801 ~ § 59-2-1805 (in effect for 2022).
Utah State Legislature, Fiscal Note S.B. 25 2022 General Session Property Tax Deferral Amendments by Fillmore, L.
[https://le.utah.gov/lfa/fnotes/2022/SB0025.fn.pdf Accessed 02/27/2023]
View Archived Source
Utah Property Tax Division, Property Tax Relief Frequently Asked Questions
[https://propertytax.utah.gov/tax-relief/tax-relief-faq/ Accessed 02/27/2023]
View Archived Source

Summit County Utah, Property Tax Relief
[https://www.summitcounty.org/1033/Property-Tax-Relief Accessed 02/24/2023]
View Archived Source
2022 Utah Laws ch. 242 (SB25)

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