Property Taxes on a New Summerlin Home:
Plan for the Year-Two Bill

By Megan Stephens, REALTOR® · Realty ONE Group · Summerlin, Las Vegas

Ask a sales counselor in Summerlin what the property taxes will be and you will usually get a sensible answer: a rough percentage of the price, or the figure on the most recent tax bill for the lot. Both are fine for a first look. Neither tells you what you will actually pay in your second year in a brand-new home — and that is the number that catches people.

Nevada’s property tax system is friendly to homeowners once they are settled in. It is less intuitive in the first year or two of a new build. Here is how it works, why the first bill is often low, and how to budget so a jump in your mortgage payment is not a surprise.

How Nevada values
a home for tax

Nevada does not tax a home on its sale price. The Clark County Assessor sets a taxable value: the land at its market value, plus the house at what it would cost to build today, less a set amount of depreciation for each year of age. The tax is figured on assessed value, which state law fixes at 35% of taxable value, multiplied by the combined rate for your tax district (county, schools, city or unincorporated area, and so on).

Two practical points follow. First, what you paid for the home does not reset your taxes the way it does in some states, which is why buyers relocating from California are often relieved. Second, a brand-new house starts with no depreciation, so it carries its full replacement value from day one.

The 3% cap —
and the year it doesn’t apply

Nevada’s best-known protection is the partial abatement in NRS 361.4723. For an owner-occupied primary residence, it caps the increase in your tax bill at 3% a year. Homes that are not owner-occupied, such as rentals and second homes, get a cap of up to 8%.

Here is the part most new-construction buyers have never heard. According to Clark County, new construction does not qualify for any cap in the fiscal year it is added to the roll. The 3% or up-to-8% cap starts the following fiscal year. Nevada’s fiscal year runs July 1 to June 30.

• While the home is being builtThe parcel is often taxed on the land alone, or on the land plus a partly finished structure. That is the low number you may see quoted.
• The first full year with the finished houseThe completed home is added at its full taxable value, and no cap limits that jump. This is the bill that surprises people.
• Every year after thatThe 3% primary-residence cap (or up to 8% for a non-owner-occupied home) limits how fast your bill can rise from there.

Why your mortgage payment
can rise after closing

If your lender collects taxes in an escrow account, it sets your monthly payment from the tax information it has at closing. On a newly built home that is often the lower, land-only or partial-construction figure. When the full bill arrives, the escrow account comes up short. The lender then recovers the shortage and raises the monthly amount going forward, often both at the same time.

Nothing has gone wrong when this happens. The tax is simply catching up with the house. But the jump can be noticeable if you are not ready for it. The fix is to plan for the right number from the start.

How to budget
for the real number

• Ask for an estimate on the finished homeAsk your lender to estimate taxes on the completed house, not the current lot bill. Many lenders who work in new construction do this already; it is worth confirming in writing.
• Look at a finished neighborA home of similar size in the same community that has been on the roll for a full year is a good reality check. The Clark County Assessor’s parcel search is public.
• Keep a cushionSet money aside in your first year for a possible escrow shortage, rather than counting on the payment staying where it started.
• Count every line on the billSome Summerlin neighborhoods also carry special improvement district (SID) or local improvement district (LID) assessments, which show up separately from the regular tax. See SID and LID fees in Summerlin.

Don’t miss the postcard
that keeps your 3% cap

The 3% cap applies to one primary residence per owner in Nevada. Clark County says its Assessor’s Office mails postcards to owners of newly built homes that may qualify, and asks you to sign and return the card as soon as possible to keep the 3% rate. If you move in and never see one, call the Assessor’s Office at (702) 455-3882 rather than waiting. Without it, a home you live in can be treated as non-owner-occupied and get the higher cap instead.

One more trap: Clark County notes that recording a new ownership document — for example, deeding the home into a trust after closing — removes the owner-occupied abatement until it is claimed again. If you plan to do that, expect a fresh postcard and send it back promptly.

Buying from out of state?

Many of my new-construction buyers are relocating, and many of them tour by FaceTime before they ever fly in. If that is you, the one step that matters before anything else is to register me as your agent on your first contact with a builder — by phone, email, chat or an online form — or the builder may not let you bring an agent later. It costs you nothing; the builder pays the commission. Here is how the process works, and the Summerlin relocation guide covers the rest of the move.