|Tax Cap Information|
|Washoe County Assessor|
In 2005, the Nevada State Legislature passed a law to provide property tax relief. Assembly Bill 489, signed into law on April 6, 2005, provides a partial abatement of taxes by applying a 3% cap on the tax bill of the owners primary residence and a higher cap on the tax bill of other properties. Some rental dwellings may also qualify for a 3% cap on the tax bill. The only property that will not be subject to a tax cap will be property that is new to the tax roll this year such as new parcels and/or new construction and parcels with a change in use. At the beginning of May of each year our office mails affidavits to the owners of properties that have been identified as residential rentals. Theses affidavits must be returned by June 15th. An affidavit must be filed every year for residential rental properties.
Our office also mails affidavits to non-rental residential properties when there has been a change in ownership or when it has been determined that construction on a residence is complete enough for occupancy. A new affidavit will also be sent if there has been a significant change in the name of the owner, for example from John Smith to the 501 Main St Trust, or if there has been a change to the mailing address. If you receive one of these forms it is IMPORTANT that you complete the form and return it to our office. When this form is generated the "tax cap" status of the property is set to the higher general abatement, "high cap". The status will remain at the higher general abatement level until a qualifying affidavit is filed. In general the forms are mailed out twice a year once in the spring for properties with changes from the prior July 1 to the file date and once in the summer for properties with changes from the spring file date to July 1.
The level of abatement for your property will be printed on your tax bill. You can also check on your current abatement status by visiting our Property Assessment Data web pages or by calling our office at (775) 328-2277.
Property owners must also notify the Assessor's Office if the property is no longer used as a single-family residence or the primary residence of the owner of the property.
NRS 361.471-361.4735 provides for a partial abatement of taxes by limiting or "capping" the amount a tax bill can increase from year to year. The increase is limited to 3% for an owner occupied primary residence (single-family home, townhouse, condominium or manufactured home) and certain qualified rental properties. Tax bills for all other properties (residences that are not owner occupied, land, commercial buildings, business personal property, aircraft, etc.) are limited to a percentage not to exceed 8%.
Because the current year tax bill is calculated based on the prior year tax bill, changes in assessed value do not have as much impact on a tax bill (up or down) as they did prior to the law change.
The abatement is the amount of additional taxes that would have been owed if not for the tax cap. For a property with a 3% tax cap, if the 2008 tax bill was $1,000 the 2009 tax bill could be no more than $1,030 even if the calculated taxes (assessed value x tax rate) were $1,050.
In the example above the $20 difference between the actual tax bill of $1,030 and the calculated tax bill of $1,050 is the abatement.
The abatement amount is identified on the tax bill. A decrease in assessed value will not result in a decrease in taxes until the prior year`s tax bill plus your tax cap percentage is greater than your actual calculated taxes. In an increasing market you may receive abatement for each year. In a declining or stagnant market your tax bill may eventually increase until there is no abatement for a tax year.
For most properties, fiscal year 2004/05 is the base year for applying the tax cap and calculating the abatement. Although values may have increased in succeeding years, the new law limits the increase to a tax bill to 3% or 8%.
Any increase in value (except increases due to improvement to or changes in the actual or authorized use of the property) that would cause a property owners tax bill to increase by more than 3% or 8% results in an abatement of the taxes.
For parcels created after fiscal year 2004/05, which are designated as "new parcels", the base year would be the year the parcel was created and the abatement and tax cap would apply from that year forward.
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All owner occupied homes (including single-family homes, condos, townhouses and manufactured homes) that are used as primary residences qualify for the 3% tax cap. Also, rental units may be eligible if all the units are rented for equal to or less than the HUD median market rents.
The statutes provide for a partial abatement of the ad valorem taxes levied on a qualified property. The effect of this partial abatement results in a Tax Cap. The tax cap will limit the increase of your tax bill to 3% over the previous year`s tax amount for your primary residence within Nevada or rental properties where the rent charged does not exceed the fair market rent for the county in which the dwelling is located, as most recently published by HUD. Most other property will receive a higher "cap", which, for 2011/2012 is 4 % over the previous years tax bill. This higher cap is subject to change yearly. It does not limit the increase in assessed value.
A residence which is designated by the owner as the primary residence of the owner in this State, exclusive of any other residence of the owner in this State; AND
Which is not rented, leased or otherwise made available for exclusive occupancy by any person other than the owner of the residence and members of the family of the owner.
The exemption will be applied to the tax bill after the cap is applied.
The following situations could cause an increase of more than the prescribed cap:
An exemption, which was applied to last years tax bill, was removed for the current year.
There was a change in use for the property such as a zoning change or mobile home conversion.
There was new construction or improvement to the property.
New, Voter approved, increases were levied or the property was annexed into a district with a higher tax rate.
There are items billed on your tax bill that are not ad valorem taxes. These are not affected by the tax cap, and could increase more than the prescribed cap.
Not necessarily, any property where the percentage of tax increase is less than the corresponding cap, and there is no prior abatement, will only be billed the original increase of the taxes. The corresponding cap will not automatically increase the tax bill.
If you live in the home you own, it is considered your primary residence and therefore qualifies for the 3% tax cap.
The rent you are charging would need to be equal to or less than the HUD median market rent in order to qualify for the 3% cap. The higher cap would apply unless it is a new property for this year, which does not have a cap.
If you own both the land and the manufactured home, and occupy the manufactured home as your primary residence you are eligible for the 3% tax cap on the land and manufactured home. This applies even if the manufactured home has not been converted to real property.
If you own the manufactured home but not the land, the manufactured home is eligible for the 3% tax cap. The cap level for the land would be determined based on the space rent charged.
If you own the land but not the manufactured home you would not be eligible for the 3% tax cap unless the space rent is less than the HUD median market rent.
If you own the land and the manufactured home but they are a rental, you are eligible for the 3% tax cap only if the rent you are charging is equal to or less than the HUD median market rent.
If my home is under construction and I am living on the land in a mobile home, can the property quaify as my primary residence (3% "Tax Cap")?
Yes, as long as you are not already claiming another property in the State of Nevada as your primary residence.
Each and every rental unit on the parcel must be rented for equal to or less than the HUD median market rent. All units must qualify.
What If I Run A Business In My Primary Residence? Does My Property Still Qualify For The 3% Tax Cap?
If your parcel has a land use code (zoning) of residential, your property would still qualify for the 3% tax cap.
If your parcel has a land use code (zoning) of commercial and it also includes your primary residence, the residential portion of your property can qualify for the 3% cap.
The county assessor may determine the separate portions of your property that are commercial (nonqualifying) and residential (qualifying) and apply to each such portion the appropriate partial abatement from property taxes.
The transfer of ownership of property will trigger a new affidavit to be mailed to the new owner to verify the status. The new affidavits will be mailed in April and August.
The 3% tax cap is applied to your tax amount, not the assessed value of your property.
No, you must sign the application and, if necessary, the rental questionnaire as the property owner. We will send the documents to you upon request.
No, but you will not qualify for the primary residence or residential rental (low income rental) tax cap if you do not, and you must sign the form.
Please note: Incomplete and/or unsigned forms may result in the property not qualifying for the lower tax cap which may result in a higher tax bill.
No. Any owner or legally authorized agent may sign the letter.
I Have Multiple Properties Owned By A Trust That A Trust Beneficiary Live In. Will The 3% Tax Cap Apply To These Properties?
Yes, all properties in which the beneficiary of the trust occupy as their primary residence would qualify for the 3% tax cap.
No, only the amount of increase on your tax bill is capped.
No, only the amount of increase on your tax bill is capped.
I Rented My House On July 1st For More Than Hud Median Market Rents, But Now In November Of The Same Year, It Is My Primary Residence. Can I Receive The 3% Cap For The Remainder Of The Fiscal Year?
No, the cap is applied based on the status effective July 1st of that fiscal year ( our fiscal year is July 1 thru June 30). You can change your property qualification to primary residence effective July 1st of the following year.
I Rent My Home For Only A Few Days A Year At $400 A Day For A Total Of, Approximately, $4000 For The Year, If I Divide This Rent By 12 Months, Then I Make $330 A Month Rent Which Is Below HUD Median Market Rent. Does My Property Qualify For The 3% Cap?
No, if you rent by the day, your property would be considered transient lodging, which does not qualify.
A better way to do the math would be: Rent of $400 a day X 30 days in a month = $12,000 a month rent, which is above HUD median market rent, and would not qualify.
I Own A Motel That Rents Weekly For Less Than Hud Median Market Rent For The Month. Do I Qualify For The 3% Cap?
No, transient lodging does not qualify.
The home in Nevada could qualify as your primary residence provided it meets all the previously stated requirements and it is not rented out at any time when you are not occupying the home.
If it is a full time rental and meets the HUD low rental guidelines it may qualify for the 3% residential rental tax cap.
I Own Many Homes Throughout Nevada, Each Of Which Is Used Only By Me. Can They All Qualify For The 3% Cap?
You can have only one primary residence in Nevada, however, if each home that you own has a family member living in it full time, that does not pay any rent, then that home would qualify for the 3% cap as a rental, renting below HUD median market rent. (The rent would be $0.00 a month.)
The Assessor`s Office has created a form for you to fill out to appeal the decision made on the tax cap applied to your property. You can obtain that form by calling, writing or coming in to the Assessor`s Office and asking for the Partial Abatement, "tax cap", appeal form. It is also available on their web site:
Jump to Appeal Form Link
Beginning with the 2009/2010 fiscal year the deadline to appeal is June 30th. So for the 2010/2011 fiscal year appeals must be filed by June 30, 2011. Prior to 2009/2010 the deadline to appeal was January 15th, so for the 2008/2009 fiscal year the appeal deadline was January 15, 2009.
The Assessor has 30 days to respond to your appeal.
If you disagree with the decision on your appeal you may contact the Assessor`s Office with additional information and/or appeal the decision to the Nevada Tax Commission as oulined in Nevada Revised Statute 361.4734(2).
You have 30 days after receiving notice of the Assessor`s decision to file an appeal with the Nevada Tax Commission.
I received tax cap forms for my rental properties, but I didn`t receive one for my primary residence. Should I have received one?
Once we receive a claim form for an owner occupied primary residence we maintain the 3% cap on the property unless there is an ownership change, mailing address change, or if the owner notifies us of a status change. At that time we would send out another claim form for verification. We have to verify rents every year so you’ll continue to receive the rental forms.