Salt Lakers will likely be getting a bigger property tax bill starting in the coming months. 

While city leaders have floated this possibility in recent years, the Salt Lake City Council voted unanimously on Tuesday to approve the city’s budget for Fiscal Year 2027, which included an increase to property taxes by 12.5% in the hopes of generating $13.5 million in revenue for the city’s general fund.

The property tax hike would come out to paying an additional $9.87 per month, or $118.38 per year, for the average Salt Lake City home, which would be valued at $624,000, according to the property tax impact schedule from the city council. For a home valued at $1 million, the property tax increase would cost an extra $344.93 per year, or nearly $29 per month.  

Salt Lake City Mayor Erin Mendenhall said last month that the city considered a number of other options before opting for a property tax. But she said the city wanted to avoid laying off employees or cutting essential services. 

Though council members didn’t offer comments over the rate change itself Tuesday, they did continue to tinker with available funds during a work session prior to the evening vote. 

The largest recipient of the increased property tax funds is slated to be for capital improvement projects (CIP), according to council materials. In total, the tax increase will send over $6.46 million to CIP, which will go toward funding projects like road safety, replacing the Sugar House Park waterline, Jordan Park sewer improvements, and other projects around the city, according to the city’s property tax impact schedule. 

Another notable beneficiary was the Salt Lake City Fire Department, which will receive around $1.87 million in funds from the property tax increase. Those funds will, “fund 9 firefighters to staff a newly purchased fire truck and allow for fuel and maintenance of the old apparatus for use as a reserve,” the impact schedule says. The money will also fund a new fire inspector position, which the city says it needs due to a, “continued increase in requests for permits, along with statutory changes to the Wildland Fire Interface (WUI) requirements.” 

The city’s Fleet Centralized Maintenance Fund will get around $1.32 million to address increased costs for parts, fuel and labor to maintain and repair the city’s vehicle fleet. A little over $960,000 will go toward paying for additional public defenders in Salt Lake City’s Justice Court. 

After the work session, Council Chair Alejandro Puy told reporters it’s been a tough year for the city, but he credited city administration for finding ways to trim down the city’s budget wherever possible. 

Despite the property tax increase this year, Puy said it’s likely another tax hike is on the horizon for this time next year. Between the impending closure of the Salt Palace in 2027 for a three-year renovation and continued construction inside and around the Delta Center, it’s likely the city will see reduced sales tax revenue from those projects. Puy also said things like gas prices can drive up city costs. 

“Right now, it looks like the city is headed to another tax increase,” Puy said Tuesday. 

He added that in the past week, he and other council members have been looking to find as many places to trim from the city budget beyond the initial cuts proposed by the mayor’s office and other city agencies. Puy said the council did that because, “when we come to our neighbors to (ask for) yet another tax increase, we can say we trimmed as much of the fat as we could — not that the fat was a bad fat.” 

In total, the approved city general fund budget totaled $498,183,556 — a shade below the $498,863,053 initially requested by Mendenhall. It’s a slight increase from last year’s approved budget. The budget will go into effect on July 1 and continue through June 30, 2027. 

As part of state law, the property tax increase will be discussed in August as part of the Truth in Taxation process before the property tax rates are fully implemented. That hearing is slated for Aug. 11, according to a news release from the city council. 

The property tax rate increase will obviously hit landowners and developers, but the bump may not be a fatal blow to potential new projects. 

Jeff Grasso, founder and managing partner of Vesta Realty Partners, said property owners and landlords have seen their operating expenses inflate over the past several years, most notably with insurance and payroll. 

“This all comes at a time when revenues have been relatively stagnant to a slight decline,” Grasso said in an email to Building Salt Lake. “Increased real estate taxes will be another item that further pushes out feasibility.”

However, Grasso added, “the new property tax regime on a relative basis to revenue is lower than in other markets I’ve worked in.”

He said without a property tax increase to fund necessary services, cities run the risk of underfunding crucial municipal services, which can create a less desirable place to live. 

“I kind of feel like we might all be in this one together,” Grasso told BSL. 

Email Jacob Scholl