Property tax changes will hurt children of low-income seniors, disabled Utahns, county treasurer warns

Each year, Grand County Treasurer Chris Kauffman meets with residents struggling to pay their property taxes — many of them seniors on fixed incomes. When they learn they qualify for tax abatement programs, the relief is immediate.

“It’s frankly the best part of my job to help with tax relief,” Kauffman said. “We have people coming in in tears, [saying] I don’t know how I’m going to pay my taxes … and by the time they leave, we have really helped them out.”

If Gov. Spencer Cox signs Senate Bill 197, which he has until March 27 to act on, those conversations could change. The bill, passed by the Utah Legislature, will phase out property tax abatements for new applicants starting in 2026, replacing them with a deferral system that postpones a portion of payments until the home is sold or transferred.

The deferral program will freeze a homeowner’s property tax bill at a base year amount — the year before they enroll — preventing future increases. While this offers stability, Kauffman said it does not provide the same immediate relief as current abatements, forcing residents to weigh short-term financial security against future tax burdens on their heirs.

“One of my biggest concerns is putting people in the situation of having to choose between their current financial stability and staying in the home that they live in versus a tax burden that they would pass along to maybe their children or their other heirs,” he said.

Current participants — low-income seniors, widows and disabled individuals — who have received property tax abatements in either of the last two years will remain in the program as long as they maintain eligibility.

In Grand County, about 160 households currently receive circuit breaker abatements, and another 40 rely on indigent abatements, according to Kauffman. SB197 passed the Utah House 42-32, with a sizeable amount of Republican lawmakers joining Democrats in opposition. The final Senate vote was 18-7.

Gov. Cox hasn’t made action on SB197 as of March 20.

How the new deferral program works

Under the current system, qualifying homeowners receive direct property tax reductions through two primary abatement programs:

Starting in 2026, new applicants will no longer be eligible for these abatements. Instead, they will have the option to defer a portion of their property taxes, postponing payment until they sell or transfer their home.

Why the bill was introduced

Bill sponsor Sen. Dan McCay, R-Riverton, said the change is meant to ensure tax relief remains sustainable and prevents costs from being shifted onto other taxpayers.

“What we found is that the property tax circuit breaker program is growing significantly, and that amount of money has been difficult to try to plan for and balance under this program,” McCay said.

Statewide, the number of homeowners receiving circuit breaker relief has remained relatively stable in recent years, increasing from about 9,000 participants in Fiscal Year 2021 to over 9,700 in Fiscal Year 2023, according to the Utah State Tax Commission. The total amount of tax relief provided in that same time period has grown by several million, reaching more than $6.3 million in 2023, which suggests that rising property values and higher tax bills have been big contributors to the program’s increases rather than significantly more applicants.

In Grand County, Kauffman said there has been an increase in abatement amounts in recent years, but it has also been due to rising property values and taxes, not more participants.

McCay said the new system under SB197 is intended to ensure that property taxes on high-value assets are eventually paid, rather than shifting the burden onto other taxpayers.

“This is going to change the property tax relief circuit breaker from a forgiveness program into a deferral program,” McCay said. “It makes it such that those who have assets, but don’t have cash to pay their property tax, will be able to defer their property tax until they have a transaction.”

Kauffman noted that while the state currently reimburses counties for circuit breaker abatements, deferred taxes under the new system will not be collected right away. Since counties factor expected revenue into setting tax rates, he said a lower collection rate could cause slight property tax increases for other taxpayers over time.

He also pointed out that unlike current abatements, which adjust annually as property values and taxes rise, the deferral program freezes a participant’s tax bill at the base year amount. Over time, he said, that could create a growing tax shift as more deferred taxes accumulate.

Concerns about the impact on families

While supporters see the change as a way to prevent tax burdens from shifting onto others, critics say it could have unintended consequences for low-income homeowners.

Sen. Kathleen Riebe, D-Cottonwood Heights, voted against the bill, raising concerns that deferrals will impact the ability of heirs to inherit homes without financial strain.

“When my parents passed away, they gave me that stronghold into house ownership myself,” she said. “This concerns me greatly that we would actually be negatively impacting the next generation.”

Kauffman also worries that some low-income seniors may feel pressured to pay taxes they otherwise could have deferred, fearing the impact on their heirs.

“They may have to forgo medicine or food or other essentials in their lives in order to make that happen,” he said.

Advocacy groups urge veto

Several advocacy groups have joined in opposition to SB197, including the Utah Housing Coalition and Alliance for a Better Utah. Both organizations sent a joint sign-on letter to Cox urging him to veto the bill, warning that it removes an essential financial safety net for vulnerable populations.

The letter argues that replacing homeowner credits with a deferral system risk pushing seniors further into debt by adding tax liens and accruing interest, while also freezing income eligibility at 2024 levels without adjustments for inflation. It also points out that some Utahns with reverse mortgages are excluded from the deferral program entirely.

“The Circuit Breaker program is an essential lifeline for low-income renters and property owners who are often overlooked in tax policy discussions,” an explanation before the letter states. “S.B. 197 threatens the housing stability of thousands of Utahns who have spent their lives contributing to our communities.”

Moab City Councilor Kaitlin Myers, who shared the letter locally, echoed those concerns. In her message, she said the bill could increase financial strain on seniors, risk disqualifying people over time by freezing income eligibility levels and lead to property tax increases for other residents without any mechanism to reduce them when deferred taxes are eventually repaid.

Immediate changes start this year

One provision in the bill will take effect in 2025 — before the full transition to the deferral system in 2026.

Starting this year, circuit breaker recipients will no longer be eligible to receive an indigent abatement, and vice versa. Kauffman said this will immediately impact on some Grand County residents who rely on multiple forms of tax relief.

“It feels to me low-income seniors and low-income disabled individuals are being singled out by this bill,” he said.

The bill now awaits Cox’s decision. He has until March 27 to sign or veto it. Kauffman said he hopes residents take the time to make their voices heard, noting that Cox’s office has a constituent feedback form and phone line for public input.

This story was first published by The Times-Independent.