How Your Tax Relief Benefit is Calculated for the Veteran with a Disability Program
A veteran with a disability rating of at least 10% may qualify for the Veteran with a Disability tax relief program. While the disability rating affects how much of a benefit is available, it is not as simple as the disability rating multiplied by the tax amount.
A 100% disability rating does not automatically mean that it will cover 100% of your property taxes.
HOW TAXES ARE CALCULATED
The County Assessor is responsible for assessing the market value of your property each year. The Utah State Legislature has determined that a primary residence will be taxed at 55% of the assessed market value. This number is called the “taxable value.”
There are several taxing entities, such as school districts, water districts, fire districts, cities, the county, etc. All of the various overlapping tax rates are added up into a single tax rate that is multiplied by the taxable value to determine how much you are charged in taxes. The county is responsible for collecting those taxes, then distributing them to the various taxing entities.
HOW YOUR TAX RELIEF BENEFIT IS CALCULATED
Each year, the legislature determines the maximum reduction in taxable value under the tax relief program. In 2022, they set the maximum benefit amount at $479,504. Your individual benefit is that benefit amount multiplied by your disability rating.
This means that if you have a 100% disability rating, the taxable value of your property will be decreased by $479,504 before multiplying by the tax rate. If you have a disability rating of 10%, you will receive 10% of the maximum, or a $47,950.40 reduction in your taxable value before multiplying by the tax rate.
EXAMPLES
| EXAMPLE 1 | EXAMPLE 2 | EXAMPLE 3 | |
|---|---|---|---|
| Disability Rating | 10% | 100% | 100% |
| Market Value | $500,000 | $500,000 | $1,000,000 |
| Taxable Value (55%) | $275,000 | $275,000 | $550,000 |
| Benefit Amount | $47,950 | $479,504 | $479,504 |
| Adjusted Taxable Value | $227,050 | -$204,504 | $70,496 |
| Tax Rate | 0.010897 | 0.010897 | 0.010897 |
| Taxes Due | $2,474 | $0 | $768 |
As shown in the above examples, if the taxable value is greater than the benefit amount, some taxes will still be due, even with a 100% disability rating.
DOES NOT COVER DIRECT CHARGES
Note that the tax relief benefit only covers taxes. It does not cover any direct charges or other charges or fees. Those charges will still be due in full in addition to any taxes due.
The most common direct charge that we see is a water charge from an entity like the Pineview or Weber Water District. There may be other direct charges that apply to your property.
USING TAX RELIEF FOR VEHICLES
You may use your tax relief benefit to help reduce the county portion of the registration taxes on your personal vehicles. Note that, if you do this, it counts against the total amount of benefit used.
For some veterans, they will have benefit left over after applying the benefit to their home taxes, as in Example 2 above. In the other examples, if those veterans use their tax relief benefit for their vehicles, there will be less available to apply against the taxes on their home.
