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Nevada Real Property Tax 2010 2011 Appraiser Perspective

by Administrator on Oct 4, 2010 General Appraisal 1283 Views

I have been asked in 2010 by clients "why are my real property taxes increasing in Clark County, Nevada when property values have been falling?"  Investigating these claims I have found that while some individuals and corporations have seen 40% tax decreases in 2010 others have seen 8% or higher increases.  You may ask yourself how this can happen when tax assessments and tax payments are supposed to be applied equally.

It is important to understand that there are a lot of moving parts when it comes to determining a the final tax calculation on a parcel of real estate.  For simplicity we considered in this short article a vacant piece of land.  In Clark County, Nevada taxes are supposed to be based on the value of the land, and a "Taxable Value" and "Assessed Value" are established for each parcel.  The Assessed Value is 35% or 0.35 times the Taxable Value. 

In the 2010-2011 fiscal year taxable values were reduce overall by about 40%.  You will be hard pressed to find many parcels that did not get that generic reduction.  So a property that previously had a taxable value of $ 1,000,000 would likely have seen it reduced by 40% to $ 600,000 on the current tax rolls.  Its Assessed Value was similarly reduced since it is 35% ot Taxable and thus a $ 600,000 property would have an Assessment of $ 600,000 X 0.35 = $ 210,000.

Taxes on a property assessed at $ 210,000 are calculated by dividing $ 210,000 by 100 and then multiplying it by the tax rate.  Clark County Tax Rates are published on the Clark County Internet site at http://www.accessclarkcounty.com/depts/assessor/pages/Taxrated.aspx , then the taxes are reduced by a "tax cap" if any.  While it appears that the application of a "tax cap," which was established by law and meant to suspend large tax increases, has been used much less in 2010-2011, I have found that it was used on a number of properties.  So contrary to popular belief there have been a number of properties with tax increases in 2010-2011 even though the government applied its near 40% taxable value decrease.  

In 2010-2011 owners have been confronted with new, usually adjusted taxable and assessed values that were almost uniformly decreased by 40%, yet some saw tax increases, and owners ask appraisers why?  Its common sense to note however that a uniform decrease did not make sense for many properties.  Some in demand parcels decreased in value by less than 40% and others decreased in value by more.  The only way to know what has happened to an individual parcel is to have an appraisal completed on it.  If the appraised value is inconsistent with the Clark County Taxable Value it should be provided as evidence at a tax hearing.

It is notable that the Assessor adjusted some taxable values up in 2010-2011 but then also provided a 40% reduction.  It appears to some owners that they received a 40% reduction in their Taxable Value when in fact the reduction was offset by the increase applied by the Assessor.  It is important to review the tax information closely that you receive, especially if you are seeing you tax bill increase.

While 2010-2011 tax rates have almost all increased most the increases have been modest.  The tax rate increase is responsible for adding back some small portion of the tax that was lost via Taxable Value decreases.

Update 2014: Not much has changed except that the Clark County Assessor is now looking at the income approach, which they didn't before, but its difficult to argue with the government.

For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.  

Article source: http://www.appraisalarticles.com/General-Appraisal-Articles/2001-Nevada-Real-Property-Tax-2010-2011-Appraiser-Perspective.html

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