Estimating Real Estate Taxes

Property taxes are confusing, no doubt about it. Hopefully this message will clear up some of the confusion. To illustrate the process I will calculate the taxes the following home for the 2009-2010 tax year as an example: 10016 Floragold Ct.

The following elements are necessary to calculate the property taxes:

• District tax rate - You can look up the tax district by the address on the assessor's page. Here is the page for 10016 Floragold Ct. The tax district for 10016 Floragold Ct is "Spring Valley Town". Look up the tax distract rate for Spring Valley Town for the 2009-2010 tax year. The tax rate for the Spring Valley Town is 2.9306%.
• The assessed value for the 2009-2010 tax year. You can look up the assessed value for 10016 Floragold Ct for the 2009-2010 tax year on the assessor page. The assessed value for 2009-2010 is $182,377.
• The magic factor (really) of 35%. This is constant in all calculations. I have no idea where this factor comes from and it does not appear to change from year to year.

Here is the formula: Assessed Value XDistrict Tax Rate X Magic Factor = Taxes for the 2009-2010 tax year. Here is the calculation: $182,377 x 2.9306% x 35% = $1,870.66.

We do not know the Spring Valley Town tax district rate for the 2010-2011 year since the state legislature has not established it yet (today is 2/28/2010). However, we do know the assessed value for the 2010-2011 tax year and if I assume that the tax rate will be the same, the annual taxes for the 2010-2011 tax year would be calculated as follows: $136,043 x 2.9306% x 35% = $1,395.41. Note that taxes (and assessed value) decreased from $1,870.66 in 2009-2010 to $1,395.41 for 2010-2011.

Notes:

• The assessed value is based on a formula related to the average sales price for properties in the tax district not the current market value. The best I can say is that the assessed value for the 2009-2010 tax year is close to the market value for properties in the tax district at the end of 2008/beginning of 2009.
• The assessed value is constant during the tax year (the tax year runs from July 1 to June 30)
• While property assessments come out in January, they are not implemented until the tax year starts July 1.
• The legislature does not pass the tax district rates (usually) until just before the start of the tax year.
• There are limitations on the maximum increase that is permitted. You find out what the cap on the increase is for any given property on the assessor page. For 10016 Floragold Ct the maximum (Tax Cap Increase Pct) increase is 8%. However, there is no cap on decreases.

Contact me if you are considering buying or selling Las Vegas real estate. You will be glad you did.

...Eric

Eric Fernwood
RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
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