Rental Property Taxes in Utah (2026 Guide)

1. Property Tax: the Residential-Exemption Trap

This is the single most important Utah landlord fact. Utah grants a 45% residential exemption on a primary residence — but it does not apply to most rentals or other non-primary residences (UT Code 59-2-103):

• Owner-occupied primary residence — taxed on 55% of fair market value (the 45% exemption applies).
• Rentals and other non-primary residences — taxed on 100% of fair market value. No exemption, so the same home carries a roughly 82% larger taxable base.

2. Income Tax (Flat 4.45% for 2026)

Utah has a single flat income-tax rate, cut to 4.45% for 2026 under SB 60. There are no brackets — the same rate applies to rental income, wages, and capital gains alike. SheltrIQ's engine applies 4.45% for 2026.

• Federal taxable income is the starting point (UT Code 59-10-104), then adjusted by the modifications in §59-10-114.
• No graduated brackets — your net rental profit is taxed at the same 4.45% as your first dollar.
• Utah offers a nonrefundable taxpayer tax credit that phases out at higher incomes, which softens the flat rate for lower-income filers.

3. Capital Gains (Taxed as Ordinary Income)

Utah has no preferential capital-gains rate — because the state starts from federal taxable income and applies one flat rate, a gain on a rental sale is taxed at the same 4.45% as ordinary income. There is no long-term-gain deduction.

4. Bonus Depreciation Conformity

Good news for Utah landlords: Utah conforms to federal bonus depreciation (§168(k)). Because Utah taxable income starts from federal taxable income (UT Code 59-10-104) and the modifications in §59-10-114 contain no §168(k) add-back, the bonus depreciation you take federally flows straight through to your Utah return — no separate state depreciation basis to track.

5. Transfer Tax (None)

Utah imposes no real-estate transfer tax and no documentary stamp tax — it is one of a handful of states that prohibit it. You pay only a small flat county recording fee per document, not a percentage of the sale price. That keeps disposition and refinance costs low compared with transfer-tax states.

6. LLC Fees ($18 a Year)

A Utah LLC must file an annual renewal with the Utah Division of Corporations for $18, due by the end of your LLC's anniversary month. It is one of the cheaper states to hold rentals in an LLC — there is no separate franchise tax or minimum-fee on a pass-through LLC, just the flat renewal (a $10 late fee applies if you miss the deadline).

7. Rent Control

Utah prohibits local rent control statewide (UT Code 57-20-1) — no city or county may enact rent or fee control on private residential property without express legislative authorization. You set rents at market.

8. Security Deposit Rules

• No statutory cap on the deposit amount (UT Code 57-17).
• Return within 30 days after the renter vacates and returns possession (and gives a forwarding address), with a written itemized statement of any deductions.
• Permitted deductions cover unpaid rent, damage beyond reasonable wear and tear, cleaning, and other costs the rental contract provides for.
• Nonrefundable fees must be disclosed in writing as nonrefundable (UT Code 57-17-2); otherwise the amount is treated as a refundable deposit.

9. How SheltrIQ Helps Utah Landlords

Utah's flat tax is simple on the surface, but the property-tax trap and disposition math still need care — SheltrIQ keeps your return on the current rules:

• Flat-rate income modeling — applies Utah's 4.45% rate for 2026 from a federal-taxable-income base, with the taxpayer tax credit phase-out.
• Bonus-depreciation pass-through — because Utah conforms, your federal §168(k) deduction carries straight to the state with no add-back to reconcile.
• Disposition modeling — taxes a rental sale at the same flat 4.45% as ordinary income, so your projected state tax on a sale is accurate.
• AI Schedule E classification — sorts each expense to the right line so your Utah income starts from an accurate federal return.