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HOW ARE PROPERTY TAXES CALCULATED

STEP 1:

To compute the property taxes for a parcel of property, multiply the assessed valuation by the tax rate as shown in the following example.  Before AB 489 was passed in 2005, the formula below would have given you an accurate property tax amount.  Due to passage of AB 489 the "tax cap" your taxes can no longer be estimated by your current assessed value.  Please see below for further explanation.

Taxable value X 35% = assessed value X rate = property taxes due.

REAL PROPERTY

Taxable Value $200,000.00
X 35%
Assessed Value $70,000.00
X $.029218
Property tax due: $2,045.26

PERSONAL PROPERTY

Taxable Value $10,000.00
X 35%
Assessed Value $3,500.00
X $.029218
Property tax due: $102.26
 

STEP 2:

CALCULATING TAX RELIEF WITH THE PROVISIONS OF AB489 TAX RELIEF

During the 2005 session of the legislature a tax relief package was passed that caps property tax increases as follows (assuming no change to the property):

Owner occupied primary residences and rental properties charging rates at or below the Department of Housing and Urban Development fair market rents may not have a tax increase from year to year of more than 3%. Taxes may from time to time increase less than 3% or go down from the prior year.

For example:  If the taxes on the "owner occupied single family" residence for the current year are $1,000.00, this amount can not increase more than 3% for the next year (as long as there are no other changes in the occupancy status, change in use, or new construction).  Therefore, next year's taxes would be $1030.00 ($1,000.00 x 1.03).  In order to determine the value that the taxes are based upon you simply divide the current taxes by the current tax rate: $1,000.00 / .029218 = $34,225.  This is the value that the taxes were based on for the current year.  If you were to multiply this amount by 1.03 (3%) your value for taxes purposes would increase to $35,252.  You then would multiply this amount by the current tax rate .029218 (this rate is subject to change) which would then equal to $1,030.00. 

All other property including vacant, commercial, industrial, second homes and higher rate rentals will be capped at between a low of 2 times the annual increase in the Consumer Price Index and a maximum of 8% depending on the growth rate in each individual County. In Carson City the 2008/09 cap was 8.0% based on the 10 year average assessed value growth. Properties in this situation will not exceed a 8.0% increase.

ALTERNATIVE ABATEMENT TAX CAP CHART PER YEAR:

2005/06    5.4%

2006/07    6.8%

2007/08    7.2%

2008/09    8.0%

2009/10    7.8%

2010/11    6.7%

2011/12    4.8%

2012/13    6.4%     

2013/14    4.2%

2014/15    3.0% 

The 2005 legislature did not change the method of property tax assessment or the initial tax calculation. The Nevada legislature placed a limit on how much taxes can be increased from year to year.  The abatement is the benefit provided to the taxpayer directly as a result of this legislation.  In order to have a better understanding of your assessment, please take a look at "How is the taxable value of property determined?". 

Property with Changes from the Previous year:

Parcels with new construction, parcel splits and changes in zoning or use, may not receive the benefit of the tax cap the first year. These values are considered ‘new’ to the roll and are taxed at the full rate (total assessed value multiplied by the current tax rate).  For example:  a property with existing construction and some new construction would be calculated as follows:  an existing single family owner occupied home would be eligible for the 3% tax cap.  The new construction would fall outside of the tax cap and would be calculated at the full value.  If the assessed value for tax purposes was $35,000 and the amount of the new construction is $50,000, than the $35,000 would receive the tax cap of 3% increasing it to $36,050 plus the new value of $50,000-- giving you a total value for taxes in the amount of $86,050.  This amount would then be multiplied by the tax rate of .029218 to give you a tax amount of $2514.21.   Again, the new construction does not receive the benefit of the tax cap for the first year only.  The next year it too would receive the tax cap of 3% increasing the taxes to $2589.64. 

 

For questions please call the Assessor's Office at  (775) 887-2130.

 
Last updated: 7/9/2014 8:46:46 AM