Assessor answers questions about property taxes

Q: My mother, 95, received a letter from the Clark County assessor’s office showing an increase in the value of her home by 13 percent and property by 18 percent over last year. I looked around at the sale prices of area homes and find them all over the place, but a few standing out really low and one standing out as an absurdly high price. In particular, one house on our street sold for $5.5 million. (Yep, that’s what the assessor’s office recorded.) And the same “exact” house next to it sold for $183,000 and was assessed at a taxable value at that amount. These are both four-bedroom, two-story homes, while my mother’s house is a three-bedroom, one-story home assessed at a taxable value of $148,392, about a 1,000 square feet less.

My questions are:

■ Why does a house have such an overinflated value on my street when it’s obviously false?

■ Does this affect the value of all properties around it?

■ How does the assessor’s office figure this huge increase in value considering the 40,000 empty homes and decreasing demand, not to mention 80,000 folks underwater and interest rates going up?

I’ve been taking care of my mother for the past seven months, having moved here from Florida and have never seen rate increases like this since the “bubble.”

— Rick B., Las Vegas

A: Clark County Assessor Michele Shafe was kind enough to help me help you. Regarding your question about the house near your mother’s home that you said sold for $5.5 million, I can understand how that would be a red flag, since the other homes in the neighborhood seem to be valued well under $200,000.

Shafe said the $5.5 million figure actually reflects the total value of a portfolio of 34 local residential properties that were sold for that combined amount. It is not meant to suggest that any one property in that portfolio is worth $5.5 million.

The assessor’s office double-checked and determined that the taxable value of your mother’s property is “well-supported” by the sale and value of comparable properties in the area.

As for how the assessor’s office determines such things, Shafe said “taxable value is determined each year independently from the previous year. We start with the market value of the land and add the current replacement cost of the building, less depreciation. If sales of improved properties in the same neighborhood indicate that our taxable value is exceeding full cash (market) value, then we apply obsolescence to the building value to bring the taxable value in line with the market sales. This neighborhood received a 20 percent reduction to improvement value due to obsolescence.”

I suspect your question came after receiving a “notice of value” from the assessor’s office. As Shafe pointed out, the increases in value you cited in your question don’t mean that you will see your property tax bill increase by these double-digit percentage amounts.

Shafe said your mother will likely pay less than 3 percent more in property taxes than she paid last year. This is thanks to a state law capping property taxes passed by the Legislature in 2005, when home values were soaring and homeowners were seeking tax relief. Since the 2004-05 tax year, local property taxes for owner-occupied homes have not been able to increase by more than 3 percent per year.

With home values rising again, this cap is helping homeowners keep their property tax increases in check.

You can appeal your property value to the county’s Board of Equalization after receiving your notice of value for the upcoming tax year. The deadline for appeals is Jan. 15 each year. For more information and, visit www.clarkcountynv.gov/depts/assessor/Pages/faq.aspx.

Send real estate questions to me at ask@glvar.org.

Heidi Kasama is the 2014 president of the Greater Las Vegas Association of Realtors and has been a local Realtor for more than 11 years. GLVAR has more than 11,000 members. Email questions to ask@glvar.org. For more information, visit www.lasvegasrealtor.com.