HOW ARE PROPERTY TAXES CALCULATED
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.
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:
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?".