Taxes fall with property values

Falling property values have generated almost a daily dose of depressing reports, but many people are finding one bright spot amid the gloom: lower taxes.

More than 200,000 property owners in Clark County could pay lower taxes this fiscal year than in 2008, almost quadrupling the 55,200 owners whose taxes fell last year, according to the assessor's office.

And it would be more than 10 times the 19,000 property owners with smaller tax bills in 2007.

This is happening after three years of tax caps that many believed would prevent property taxes from ever dropping again in Nevada.

"This is going to be an extraordinary year," said county Assessor Mark Schofield. "We've seen the market decline, but never have we seen it decline to this level."

About 6,000 property owners have filed appeals, requesting that the county reduce their assessed values, Schofield said. The applicants range from homeowners to large companies.

That number far surpasses the 1,300 appeals filed last year, he said.

The county assesses properties yearly, even though by law it only has to reassess parcels every five years, he said.

Owners were mailed cards in December with the assessed values printed on them as well as a note about the Jan. 15 deadline for filing an appeal, he said.

State law forbids the county from accepting appeals after that date, because a certain amount of time is needed to process the tax data for the year, Schofield said.

Disgruntled owners who filed by the deadline will plead their cases to the county's Board of Equalization at meetings in February, Schofield said.

This year, the county will levy lower taxes on at least 200,000 properties, almost a third of the 724,000 parcels on the books, Schofield said.

As a result, county finance officials predict property-tax revenue will have zero growth at best.

That would be on top of declining sales tax money, and the county possibly losing $32 million to $47 million of property tax revenue to the state, said Don Burnette, the county's chief administrative officer.

"It's not a good sign," Burnette said.

As market prices have plunged, many residents have questioned why their tax bills have crept up, when state law forbids a property's assessed value from exceeding its market value, said Rebecca Coates, assistant treasurer for the county.

Several years ago, a 3 percent cap on property tax increases was imposed on owner-occupied homes and an 8 percent cap on commercial properties, based on 2004-05 assessed values, she said.

After that, market prices in Las Vegas skyrocketed by a double-digit percentage for a few years, well outpacing the growth in taxes.

Property values now must fall below 2004-05 levels before their owners see a decrease in their tax bills, Coates said.

Roughly 717,000 properties in Clark County have declined in value in the past year, though most didn't depreciate enough to lower the owners' taxes, Schofield said.

Still, that underscores the downward trend, he added.

In 2008, the county collected a little more than $2 billion in property taxes.

This year's revenue is projected at $2.3 billion, in part because 17,000 parcels were added to the rolls, Coates said.

She and Schofield expect the projected revenue will dip, however, as the Board of Equalization adjusts the assessed values of properties whose owners have appealed.

Schofield noted that when two or three people within a given area persuade the board to lower their values, the board often will reduce values for that entire neighborhood.

His office lacks a means for tracking appeals filed within specific neighborhoods, especially with the volume so high, he said.

With 6,000 owners appealing this year, the ripple effect could be far-reaching, he said.

There's a good chance that the county could see a net decrease in property tax revenue for the first time since those records have been kept.

In Washoe County, Assessor Josh Wilson will ask his equalization board next week to roll back values on all properties by 15 percent in that county.

"I think it is a reasonable approach to adjusting the values based on the market trends up here," Wilson said.

A Washoe County assessment showed parcels had depreciated by an average 18 percent, Wilson said.

He said foreclosures and oversupply are driving real estate prices farther down in that Northern Nevada county.

Schofield said Clark County's inventory is too large and diverse for a blanket rollback.

"We can't just arbitrarily lower across the board," he said. "It varies from area to area."

Contact reporter Scott Wyland at swyland@reviewjournal.com or 702-455-4519.