Property taxes rise even as assessed value drops

By Dave Frank

Appeal Staff Writer

Carson City homeowners will probably pay higher property taxes this year than last year even if the assessed values of their homes have dropped.

Many homeowners are paying property taxes based on older and lower assessed home values, so fluctuations in newer assessed values don't affect them.

Property tax bills will be sent out around July 20.

"What people need to know is this: Even though their assessed values are declining, their taxes are still going up," said Carson City Assessor Dave Dawley.

Under a 2005 law, property taxes for homes built before the law took effect are based on 2002 assessed values and can't climb more than 3 percent a year. Assessed property values, however, have increased much faster than 3 percent a year.

It doesn't matter, for instance, if the assessed value of a home dropped from $300,000 in 2007 to $275,000 if the home was assessed at $100,000 in 2002. A 3 percent increase a year for six years wouldn't bring payments close to payments based on more recent assessments.

"It's going to take a long time before it catches up with the wild gyrations at the top," said Carson City Treasurer Al Kramer.

The law also applies in different ways to homes built after 2005 and to apartments, which could also create confusion, Kramer said.

An owner with a home built after 2005 pays full property taxes the first year with a 3 percent increase for each year after. Property taxes for most apartments can go up 8 percent a year.

That could leave three identically built houses - one a few years old, one brand new and one rented - with dramatically different property tax payments.

Over five years, for instance, a rented house will pay 25 percent more in property taxes than one that is lived in by the owner.

"You're going to see a big disparity as time goes by," Kramer said.

There are other complications, too, said Dwight Millard, of Millard Realty and Construction in Carson City.

A person who buys a home that has been rented will have to pay higher property taxes than if that home had been lived in, he said, which isn't fair.

"So what happens is the guy who buys the house ... pays a whole lot different," he said. "That's all I'm saying and I think it's the wrong way to do it."

• Contact reporter Dave Frank at dfrank@nevadaappeal.com or 881-1212.