Sen. Julia Ratti, D-Sparks, on Wednesday introduced a constitutional amendment that would reset the taxable value of existing homes to market value when they are sold.
Under Nevada’s existing constitutional structure, when an existing home is sold, the new owners get the benefit of the home’s existing depreciation, effectively locking those residences in at a property tax far lower than the actual value of the structure.
The taxable value of improvements on a property depreciates at 1.5 percent per year to a maximum 50 years. That means homes 50 years old or more pay a quarter of the property taxes a new home costing the same amount would pay.
For the first year after a home is sold, Senate Joint Resolution 8 would reset the taxable value of the real property to what it sold for. After that first year, the new owner would be entitled to the 1.5 percent annual depreciation.
“Any adjustment provided by the Legislature by law based on the age of improvements to the real property must be determined as if the improvements were new improvements on the date of the sale or transfer,” the joint resolution states.
SJR8 was referred to the Senate Committee on Revenue and Economic Development for review.
To become part of the constitution, it must be passed twice by lawmakers and then by the voters.