Basics of Carson City property values and taxes
November 12, 2004
Carson City Assessor Dave Dawley announced earlier this week that property values throughout the city have risen 15-45 percent, and that will mean higher tax bills for Carson City land owners.
Residents will receive their assessment notices in the mail later this month, and Dawley expects they will be disappointed.
To prepare property owners for the blow, Dawley and Carson City Mayor Ray Masayko answered questions, outlining the basics of property values and taxes as they apply to Carson City.
Property values have risen 15-45 percent over what period?
Dawley: The urban counties are seeing the largest increases in their land values. Clark County, Douglas County, Washoe County and Carson City have been slowly rising in value and didn’t start seeing the dramatic increases until just recently.
The lack of available land and the low interest rates may be one reason. Most land in Carson City has doubled in value since 1999. Lots in Silver Oak, for instance, that were selling for $65,000 in 1999 are now selling for between $125,000 and $140,000. Mobile home lots were being sold for around $35,000 in 1999 are selling for $65,000 to $70,000. One-acre parcels which were selling for $55,000 in 1999 are now selling for $150,000.
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The area that was involved in the Waterfall fire will not be seeing an increase this year. That area had significant appreciation prior to the fire, but the lack of verifiable sales since the fire tells us that the market has slowed down and there aren’t enough sales to determine after-fire values.
How often are properties assessed?
Dawley: We are required by law to re-appraise property at least once every five years. Additional re-appraisals may occur when improvements are added, removed or a new structure is built. The law also specifies that if there is a significant change in value, that we must add a factor to represent such change.
Mobile homes are assessed differently from regular houses. How are they different?
Dawley: Mobile homes are taxed on their base costs and there original acquisition year. Mobile homes receive 5 percent depreciation for a maximum of 80 percent. They reach their full depreciation after 20 years. Mobile homes will also be affected as the increase is based on the land value.
Houses in Nevada are depreciated, so that old houses aren’t assessed as much as newer ones. How does that work? What’s the implications for the city’s west side, with its valuable old houses?
Dawley: All structures are appraised the same, no matter where they are. However, older structures will receive more depreciation because they were built many years ago.
Some homes in the Carson City Historical District are entitled to an additional tax deferment. This deferment is given as an incentive to maintain the historical integrity of the home. The deferment is approved by the Historical Commission. The homes may be receiving more depreciation, however, they will also be affected by the increased land values.
How would a property-values cap work in the Legislature? Who’s proposed one? What would it do?
Dawley: There are a number of bill draft requests that have already been submitted. The bill sponsored by Sen. Terry Care of Las Vegas is the proposal that has gotten the most debate. The proposal was thought of by Clark County Assessor Mark Schofield and if referred to as the “6 percent tax cap.” What this proposal does is limit the amount of an assessed value to 6 percent. For example, if you had a lot that was being assessed at $50,000. But sales in the area have been 30 percent higher or $65,000. This BDR would limit the amount of the increase to $3,000 or a total increase to $53,000.
Why don’t the supervisors lower the tax rate so that the tax bills come out about the same? If people are going to be paying so much more in taxes, doesn’t the city get a windfall of new revenue? What will it do with the money?
Masayko: There is already a limitation on the total property tax revenues which Carson City (or other city/county) may generate for their general fund. The statute, in general, limits year over year revenues to not more than a 6 percent increase – based on the existing properties (tax roll) over the same year to year period.
Growth or new property on the rolls in a particular year does not count against the 6 percent revenue cap. In the past, the Carson City Board of Supervisors has not felt the need to assure themselves of getting the 6 percent revenue increase, if it meant an increase in the order of six percent in the property tax rate for the city.
Bottom line: There will be no city property tax windfall because of re-appraisals or increasing land values. There may be some individual properties and areas of Carson City, where re-appraisals were done this year or increased land values were applied, that will see their individual tax bills increase next year.
But, since only about one-fifth of Carson City is reappraised for assessment purposes each year, a simple mathematical approach is not an accurate method to determine the average person’s tax bill. Nor can one say that just lowering the tax rate will assure taxpayers of the same tax bill. Only 20 percent of the properties were reappraised and probably received higher values and 80 percent had little if any change in assessed value.
The major portion of the property tax rate is not controlled by the Carson City Board of Supervisors. Also remember that the 6 percent revenue limitation applies only to the city’s General Fund Operating Rate – about 99 cents per $100 of assessed value.
The total tax rate of some $2.64 per $100 of assessed value consists of the city operating rate – about 37.5 percent; the school operating rate and voter-approved bonded debt – about 46.5 percent; State of Nevada general rate, including long-term care, medical indigent – about 11 percent.
The some 60 percent of the property-tax bill over which the city policy makers have no control, and, insofar as I know, is not subject to annual revenue limitations. With the exception of the school bonded debt rate, which was voter approved, and may see a decrease as bonds are retired and taxable values increase, the remainder of the tax rates and policies are set by the state Legislature. Most of the increase in individual tax bills will be due to these factors and not the city operating rate.