Proposed legislation modifies the way Nevada property tax increases are calculated. If approved, the bill could codify into state law an annual 3% property tax hike for residential real estate in perpetuity. The increases are even higher for commercial properties, as much as 8%.
In 2005, Assembly Bill 489 placed caps on Nevada property taxes: a 3% cap for owner-occupied homes and an 8% cap on all other property including rental homes, commercial, and industrial property. A secondary cap was added, which is calculated by the average of the change in assessed value of all property in a county, as well as twice the value of the Consumer Price Index (CPI). That led to a big drop in property tax growth in the last few years. Property taxes rose by just 0.2% in six counties last year.
Assembly Bill 43
AB 43 would create a property tax floor of 2.6% for 2017, twice the estimated CPI. Once the CPI reaches 1.5%, the floor would increase to a maximum of 3%, where it would become locked. It could not decrease.
AB 43 is supported by the Nevada Association of Counties. NACO executive director Jeff Fontaine testified that the intent is to stabilize property taxes, which are a revenue source that counties and other local governments rely on.
Janine Hansen, state president of Nevada Families for Freedom testified in opposition to the bill. "We're concerned about the fact that if you stabilize these taxes -- which may be good for government -- that for us, when our incomes go down, the tax never goes down." She said this would be especially harmful for citizens living on a fixed income or enduring a financial hardship.