Primary Residence Exemption
Utah law requires assessors to exempt from taxation 45% of the fair market value of residential property. Section 59-2-102 and rule R884-24P-52 define residential property, for purposes of the exemption, to be a primary residence. A primary residence does not include property used for transient residential use, or condominiums used in rental pools. [Utah State Constitution, Article XIII, Section 3, (Section 59-2-103)]
To qualify, a property need not be owner occupied. Apartments and other rental housing used as a primary residence qualify for the exemption. The assessor shall grant the residential exemption to the first one-acre of land, if listed in the same parcel description. The property owner has the burden of proving that property qualifies for the exemption.
Guidelines as provided by the Utah State Tax Commission in their Standards of Practice are:
- A “primary residence” is the principal place where one actually lives as distinguished from a place of temporary sojourn. Though motel and other transient properties would not meet this definition, typical student housing, used by renters during the school year (more than six months), would qualify for the exemption.
- If a person requests a property be designated as a primary residence, the exemption should not be granted without conclusive evidence that the property serves as the person’s primary residence. If the person’s address on the Utah driver’s license and/or voter registration is in a county different from that of the property location address, the county where the application is made should notify the other county assessor.
Further instruction has been provided by the Commission in an Advisory Opinion dated September 17, 1997. This advisory opinion states:
- “Property that is eligible for the primary residential exemption on the lien date is entitled to the exemption, even if the property is temporarily unoccupied. For example, assume that a home was sold prior to the lien and the seller moved out prior to the lien date. Assume also that the new owner does not move in until after January 1st. So long as the property use meets the criteria for the primary residential exemption, the fact that it was temporarily unoccupied on the January 1st is irrelevant. The situation may also arise with rental property that serves as the primary residence of the tenants. The fact that the property may be temporarily vacant on the lien date should not defeat the exemption.
- “Another example of a primary residential property that may be unoccupied on the lien date is a home under construction. It is our position that when property is Page 2-19 Standard 2 * Property Tax Exemptions Standards of Practice committed to a qualifying use, that property is eligible for the exemption if (1) the dwelling is under construction on the lien date, (2) the assessor has evidence that the house is being constructed for use as a qualifying residential dwelling, and (3) the property is actually put to use as a primary residential property upon completion during the tax year. If all of those conditions are met, the exemption relates back to the lien date. This is true even if the owner is living in another primary residence during construction. The primary exemption is based on the intended use of the two residences, not the occupants.
“The only distinction that we have drawn with regard to a property owner who owns two homes in Utah is as follows: “If the property owner is not a Utah resident, but owns residential property in Utah, we assume that the owner is using the Utah property as secondary property unless the owner shows that it its being used as a primary residence.” (Dennis v. Summit county, 933 P.2d 387)
The residential exemption is limited to one primary residence per household. (Section 59-2-103) “Household” is defined in Section 59-2-102 as: “the association of persons who live in the same dwelling, sharing its furnishings, facilities, accommodations, and expenses; and includes married individuals, who are not legally separated, that have established domiciles at separate locations within the state.” Spouses who are legally separated can claim a primary residential property tax exemption individually. Standard 2.13 General Personal Property Exemptions
For further information regarding this exemption contact the Washington County Assessor: (435) 634-5703