“You must pay taxes...

But there’s no law that says you gotta leave a tip.” - Morgan Stanley

When it comes to property taxes, don’t follow my example. Hopefully, though, you can

at least learn from my mistakes.

For several years, I’ve been paying more property taxes on my residence than I should

have. A lot more. And my chances of getting those overpayments refunded are slightly less than

a snowball’s chance in Hades.

But now I’m at least doing something about it. And if you’ve been hoodwinked like I

was, then there’s something you can do to fix your property taxes, too.

In 2005, the Nevada State Legislature passed Assembly Bill 489, a law that limits annual

property tax increases on an owner’s primary residence to no more than 3%. All other

properties, such as rental properties and commercial properties, are subject to annual tax

increases of up to 8%. Problem is, the burden is on you to let the government know if any given

property you own is your primary residence. Otherwise, they seem more than willing to assume

it’s not your primary residence and ignore the annual 3% cap.

You have an initial opportunity to declare your eligibility for the 3% primary residence

cap any time you purchase residential property. At that point, the Clark County Assessor’s

Office mails you a Tax Cap Abatement Notice. You can submit your claim for the 3% tax cap by

signing and returning the bottom portion of that notice to the Assessor’s Office either by mail,

online, or in person. But if you fail to do that, don’t be surprised if the County assumes that

property is not your primary residence and assigns it the annual 8% increase cap instead .

The same thing happens any time a change in the record owner of your existing

residential property occurs, such as when you transfer your property into or out of a trust or an

LLC, for instance. You’ll get a similar abatement notice, but if you assume it’s junk mail and

throw it away rather than returning it, you’ll get the annual 8% cap instead of the much smaller

3% cap.

Putting the burden of claiming the 3% cap on us as the taxpayers seems a bit unfair. So

does the fact that we can’t get a refund for prior overpayments once we finally realize our

ignorance and oversights. These are definitely traps for the unwary. But that’s the way it

appears to work. So our State Legislators need to hear about it if it makes us mad enough.

Until the law changes, though, about the only viable recourse available to each of us is to

correct our designated tax cap if it’s wrong. Fortunately, there’s a way. First, find out if you’re

designation is incorrect. You can easily do that by calling to ask the County Assessor’s Office at

(702) 455-3882. Or by visiting the County Treasurer’s webpage at https://trweb.co.clark.nv.us,

then typing in the address of your primary residence and looking to see if your tax cap

percentage is 8% or 3%. If it’s 8%, then you need to have it reduced to 3% by filling out and

submitting the appropriate forms.

When Leslie recently caught the mistake and called, the lady who answered at the

Assessor’s Office was very friendly and helpful. It may take several weeks for the correction to

register in the County’s computer systems, but hopefully our problem is solved going forward.

However, even if you get your tax cap fixed once, the 3% primary residence designation

doesn’t necessarily last forever. It can change back to 8% if you move to a new primary

residence, refinance your residential mortgage, or otherwise change the ownership of your

existing residence by transferring title into or out of a trust, for instance. So be vigilant and

beware if one of those changes happens to you. And instead of tossing your annual property tax

bill into File 13, take a quick peek every year just to make sure your primary residence still has

the 3% cap designation.

I hate to even think about how much Leslie and I could have saved over the last 20 years

if we had been paying attention and then been conscientious about electing the 3% cap. When

we recently discovered the problem, I hoped it only dated back to our 2020 residential refi. But

it appears to have been going on much longer than that, possibly even back to 2002 when we

originally purchased our current home.

Of course, I’m not going to cry over spilt milk. Well, maybe just a little. Indulge my

whining for just a minute.

In 2023, our property tax increase was in the neighborhood of 6.73%. And this year it

was around 5.95%. So, just in the last three years we could have saved almost $650. Over the

last 23 years, who knows what our total savings might have been? I know, I know . . . I need to

call the Wambulence and cry to somebody who cares.

There is a bright side, though. It could have been much worse. Most our annual

increases in recent years were less than 4%. And some even below 2% after the market took a

dive as a result of Covid. But those smallest increases resulted from lower property values, not

from our tax cap. The many other years when the increases were above 3% were when we paid

way too much and lost our hard-earned money unnecessarily.

So, please don’t make the same mistakes I made. Don’t wait in ignorance for 15 or 20

years before you get wise and have your tax cap corrected. In fact, don’t wait at all. Do it today!

Then use the savings to buy your significant other that new diamond ring or Tesla they’ve

had their eye on lately. Take it from me, you’ll be much happier. And so will your favorite

jeweler.