Can property owners reduce tax assessments using dissimilar comparable properties? Patience LLC v. Salt Lake County Board of Equalization Explained

The Utah Court of Appeals recently addressed the challenging burden property owners face when seeking to reduce their tax assessments in Patience LLC v. Salt Lake County Board of Equalization.

Background and Facts

Patience LLC purchased commercial property in downtown Salt Lake City for $1.2 million in May 2017. Salt Lake County assessed the property’s fair market value at $885,890 for tax purposes. Patience appealed, arguing the assessment was inflated and requesting a reduction to $550,000 based on three comparable properties. Patience claimed it purchased under duress due to limited office space availability and argued the property’s value was diminished by homeless displacement from Operation Rio Grande.

Key Legal Issues

The case involved two primary issues: whether the Commission properly determined the property’s fair market value, and whether Patience was entitled to an equalization adjustment based on comparable properties with assessed values deviating more than 5% from the subject property.

Court’s Analysis and Holding

The court applied substantial evidence review to the Commission’s fair market value determination and substantial deference to the mixed determination regarding equalization. The court rejected Patience’s duress claim, finding insufficient evidence that the law firm would pay twice market value rather than find alternative office space. The Commission properly found that homeless issues arose months after the valuation date and could not affect the assessment. Critically, the court emphasized that Patience’s comparable properties were not truly comparable—they differed in condition, grade, and property type. The Commission correctly distinguished between office conversion properties (residences converted to offices) and traditional office buildings, noting that conversions command higher values due to their unique character and construction quality.

Practice Implications

This decision underscores the importance of selecting truly comparable properties when challenging tax assessments. Property owners must demonstrate not only that their assessment contains substantial error but also provide a sound evidentiary basis for an alternative valuation. The ruling highlights that property classification matters significantly—office conversions and traditional offices may have different valuation standards. For equalization claims, taxpayers must identify properties that are genuinely comparable in all material respects, including condition, grade, and use type.