This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Posted: 3:34 PM- Huge spikes in property tax levies have Utah lawmakers looking at changing the way home values are assessed, with one option being California's model, basing the tax on the sale price of the home.
California changed the way it calculates its home values in 1978, after voters passed Proposition 13. Until then, the state had estimated the market value of the home, much as Utah does now.
"People were literally being taxed out of their homes," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, a backer of Proposition 13.
After the change, the home value was based on the sale price of the home, plus an annual 2 percent increase, regardless of the market conditions, meaning the values are typically well below market value. The rate at which taxes are assessed were also capped at 1 percent.
"It provides tax certainty. So for new homebuyers they can plan and not worry about buying the dream home and run the risk of being taxed out of their home," Coupal said.
It also provides a more stable revenue base for lawmakers, he said.
Deborah Herbert of Mapleton, who lived in California when Proposition 13 was enacted, said the change saved her at the time from exploding property tax rates, much like those she is coping with now. She's seen the tax on the modest home she and her husband built quadruple, driven sky-high by massive homes built nearby.
"I have never filed for bankruptcy. I have never left a bill unpaid," Herbert said. "You're taxing us out of our homes. You're asking us to assume an unfair tax burden."
Rep. John Dougall said a model similar to California's acquisition-based valuation could help address the volatility in Utah's system, "the sticker shock for the taxpayer when they open up their notice."
Massachusetts and Florida have also adopted property tax assessments similar to California's.
Allison Rowland, budget director for the group Voices For Utah Children, said her concern is that the fixed tax rate would make people unwilling to move from homes they have owned for a long period of time, making it harder for new homeowners to buy a first home.
She said that may be part of the reason only 58 percent of Californians own their homes, while 72 percent of Utahns are homeowners.
Coupal said that, if Proposition 13 was being rewritten today, it would likely include some assistance for first-time homeowners.