Whether to Challenge a Valuation is an Increasingly Complicated Decision

County assessors in Nevada mailed their tax year 2018-19 notices of value in early December 2017. Many of these notices reflect double digit increases in valuation. These values can be challenged by filing an appeal to the county board of equalization. The deadline for doing so is January 15, 2018. However, the partial abatement from property tax, which is commonly referred to as the tax cap, has made the decision of whether to challenge a property’s valuation more complicated.

Despite an increase in a property’s valuation, the amount taxes can increase from year to year is limited by a tax cap that applies to the tax liability, not the taxable value. The tax cap is calculated by (a) increasing the taxes paid in the preceding tax year by an applicable tax cap factor and (b) adding the tax attributable to “any improvement to or change in the actual or authorized use of the property” that was not included in the assessment for the prior year.

The applicable tax cap factor is determined annually for each county. It is the greater of the following two criteria:  (a) the average percentage change in the assessed value of all taxable property in the county over the preceding 9 years, or (b) twice the percentage increase in the CPI for the immediately preceding calendar year.  But, in no event can the applicable percentage be less than zero or more than 8%. The official percentage will not be announced until later this spring, but for Clark County the tax cap factor for tax year 2018-19 should be 4%.

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American Property Tax Counsel (APTC), December, 2017

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