Nevada Property Taxes - Why Arbitrary is the Only Word to Describe The System
BY Don Kanare
As a real estate agent and homeowner in Nevada, I am always perplexed by the seemingly arbitrary way that property taxes are determined, especially for the real estate in Incline Village and Washoe County. With the State laws governing property assessments seemingly straight forward, why are there such huge variations in property taxes for similarly priced properties?
I have spoken with Incline Village real estate brokers who have been here for 25%2B years and the only word they use to describe our property tax system is "Arbitrary." When 2 properties can sell for the same price on approximately the same date and one pays taxes that are 25%25 to 35%25 higher than the other it is difficult to explain this phenomenon to prospective buyers. Everyone wants to know what their property taxes will be when they purchase a piece of real estate yet there is no routine formula that one can use (like in California) for determining the taxes on any particular sale.
Generally, a condo in Incline Village will pay much lower property taxes than a single family residence (house) that sells for exactly the same price. No one can explain the reason for this, since property taxes are supposed to be based upon fair market value. How can the county tax assessor claim that it is fair to tax a condo at a far lower rate than a house that sells for the same price?
A great example of this nonsensical system is to compare the sale of two properties that closed escrow in the summer of 2005 at the exact same price; $500,000. The house at 953 Tyner Way has a property tax bill of $3,347 per year, while the condo at #96 McCloud has taxes of only $2,227. How can the assessor justify taxing the house at a rate that is 33%25 higher than a condo that sold at the same price?
The case becomes even more extreme in the event we are looking at lakefront properties. Not only is there a premium assessed for the view, but the assessor also routinely tacks on another premium for the lakefront location. The buyer of the lakefront property paid a premium price for the special location so the property taxes should be based on the value of the property without a double-taxation of the view and lakefront location. But try telling that to the Washoe County Tax Assessor.
At the present time there is a case before the Nevada Supreme Court challenging the arbitrary nature of the property tax system, especially the way in which it is applied to real estate in Incline Village and Crystal Bay. With Nevada property taxes soaring out of control in the late 1990s and early in the 21st century the State Legislature put in a temporary 2-year tax increase limitation until a loong-term solution can be found. Property taxes can increase no more than 3%25 annually for owner occupied properties and no more than 8%25 for investment and non-owner occupied properties.
If you are looking to buy real estate in Incline Village you will want to investigate the property tax situation for each house or condo you are considering before making a purchase decision. There can be huge variations in the annual property taxes for similarly priced properties.
ABOUTH THE AUTHORDon Kanare is a real estate agent with Lakeshore Realty located in Incline Village, NV at the northeast corner of Lake Tahoe. Don writes a daily column about the new listings, price changes and general market commentary on Incline Village Real Estate. You can find Don's column on his web site at: www.InsideIncline.com |
