Committee approves second substitute to phase abatement into deferral for circuit-breaker property relief

The House Revenue and Taxation Committee on Feb. 28 approved the second substitute to Senate Bill 197, a comprehensive rewrite of Utah’s “circuit breaker” property-tax relief that would phase most abatement benefits into a new deferral program and change income, age and asset tests for eligibility.

Senator McKay, sponsor of the bill’s substitute, said SB 197 is intended to address an unintended tax shift caused by the abatement program: when a homeowner receives an abatement it reduces their assessed valuation but the tax rate floats for other property owners, creating small annual increases for the rest of taxpayers. The substitute keeps existing abatement recipients on the abatement schedule for a long transition while moving future or newly eligible recipients toward a deferral with different eligibility tests and lower interest on deferred amounts.

Key features described by Senator McKay and in the handout reviewed in committee: - Non-discretionary deferral: For qualifying homeowners age 65 or older with household income up to $60,000 and liquid resources within a statutory test, the bill would lock a taxpayer’s base-year property-tax liability and allow deferral of increases. Deferred amounts would carry…