Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q: I live in Southern California and am contemplating a move to Las Vegas. What are the property taxes like there?
A: "The most frequently asked question I get from people new to Nevada is, "Will my purchase price affect my taxes?’" said Paul Bancroft, an attorney at McDonald Carano, a law firm with offices in Reno and Las Vegas. "Because of the tax cap, the answer is no."
The cap, which mandates that property taxes can only go up a certain amount each year, is currently at about 3%, said Douglas John, a lawyer at Frazer Ryan Goldberg & Arnold who works in Nevada and Arizona. The cap is variable, he said, and is re-evaluated annually by the state. It’s been as low as 1% and as high as 8%, he said, and has been moving up in recent years.
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Each county has a different tax rate. Las Vegas is in Nevada’s Clark County, which itself has 112 separate tax districts. The rate in Las Vegas for fiscal year 2017 to 2018 is about 3.3%, according to the Clark County Treasurer's office. It’s been the same for the last few years.
Unlike in nearby California, when a house is sold in Nevada, the sale does not trigger a reassessment of the property for tax purposes, the lawyers said. So there’s no change in the amount of taxes paid by the new owner.
Many homes in Las Vegas were reassessed after the Great Recession at the end of the last decade, he said, when property values were low. Those low values are still on the books, even though the market has recovered. But the cap limits the amount the tax can be increased, so the "taxes won’t grow as fast as the value," Mr. Bancroft said.
It also means older buildings have a tax advantage compared to new construction, Mr. John said. An older building that was accessed when home values were low will pay far less in property taxes than newly constructed buildings will.
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Another thing to note: Real estate transactions are subject to a one-time transfer tax, according to Mr. John. That tax is worked into the deal, he said, with the buyer and seller determining who will pay it.
Currently, that tax is .51% of the value of the property, he said.
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