Property Tax and Home Insurance Questions (Las Vegas: real estate, foreclosures, rental)
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As I've mentioned in another thread we are hoping to move to Las Vegas as soon as we sell our Texas house. I want to ask a few questions specifically about property taxes and Homeowner's Insurance as I can see that forecasting those expenses is important. I've done some research on this and I talked to a mortgage broker this week. I do see that I was probably overestimating the amount of these and so my housing budget can possibly be a bit larger.
OK -- This is what I think I understand about property taxes. But I do have questions.
1. When you buy a house they do NOT revalue the assessed value as a result of the sell. So you basically "inherit" the assessed value of the house. (I have a basic understanding of how assessed value is determined)
2. If a house is your primary residence your tax will not increase more than 3% a year. If it is not, the cap is 8%.
3. When you buy a house for that year you get the 3% or 8% cap as applicable for the seller. So if you buy from someone who was not the occupying homeowner, then your taxes at the end of that year can go up 8%. Otherwise, it is limited to 3%. For future years, if you have filed that the house is your primary residence you will have a limit of 8%.
4. Because of all this, "older" houses that have been subject to 3% increases for several years usually have much lower taxes than newer houses. I have been limiting my search to houses built from 2010 on and priced between $425k and $475k. I have seen $450k houses with $1800 taxes and newer ones at almost $4k. I would say that most houses I was looking at have taxes between $2400 and $3500 a year. I was looking at some new construction and the estimated first year taxes were $4500. That is undoubtedly enough to make me rule out new construction.
5. Some houses have SID/LID also. I did find a place to look this up. Houses in Providence seem to have this. It looks like for most houses that this is roughly $8k or so. I've seen a few listings where the seller has paid this off which would be an advantage. My perception, which may not be correct, is that these charges are more common in the large master planned communities rather than the smaller subdivisions.
Questions:
1. Is any of the above incorrect?
2. Is there some place you look to see if the owner is subject to the 8% cap or the 3% cap?
3. I thought I under the 3% and 8% thing. But I do see some houses where the increases don't match that. Sometimes it is a small difference. The increase was 3.5% rather than 3%. Sometimes the increases are huge. Here is an example:
I assume this house was rental property as increases exceeded 3%. But twice there were larger increases.
From 2020 to 2021, the tax increased by 37.2%. I don't really see why that happened. The assessed value went up about 5.6% so I don't understand the huge increase in taxes. Also, from 2016 to 2017 there was an 11% increase in taxes.
There are a couple of big jumps in taxes. I understand the one when the house was built. But from 2016 to 2017, the taxes went up 73.2%! The next year they went down 38.2%. Them from 2020 to 2021 they went up 198.3%! This was an increase from $1477 to $4407. Note that the assessed value went up from $88,690 in 2020 to $93,385.
I thought at first that maybe the increase was because remodeling had increased the assessed value. But, this houses assessed value increase in 2021 was not 198.3%! So there seems to be something else going on with these 2 houses. What am I missing?
(I am not interested in these specific houses, just trying to understand the houses.
4. That actually brings up another question. If you do remodeling and the assessed value goes up more than 3% as a result of that, can they increase your taxes that year commensurately? That would make sense but I don't know.
OK -- Those those are the tax questions.
I would like to get more of a feeling on homeowner's insurance. The mortgage broker says she would expect it would be more than $1200 a year. Even though I know insurance is less expensive there that seems super low. I wonder if that is for barebones coverage. What is a realistic number for "good" coverage. I currently pay about $4300 a year. I have insurance with Safeco with the optimum coverage. I have many of their optional extensions for things like foundation, water seepage. I do not have expensive scheduled personal property. I do currently have a pool which does increase cost a bit. I have never had a claim.
Given that, for a house in Las Vegas in the price range I am looking at does anyone have any ideas of what would be typical cost for good coverage?
Home owners insurance is dirt cheap out here. $1200 seems like a lot. I pay around $600/year for house worth somewhere around 500k with a 1% deductible, replacement cost coverage.
The most common homeowners claim I know of is from water leaks, usually a bad water heater that leaks and dumps water everywhere, sometimes pipe bursts. I know a number of people who have had water damage claims related to water heaters failing.
Most of your observations are correct regarding property taxes. You would have a 3% cap on a primary residence and can even qualify for this on investment properties if you charge under HUD fair market rent for the year.
The big jump in valuation is usually extensive home improvements and additions. If you really improve the property you can trigger a new depreciation date (say house built in ‘78 revalued to ‘84 for large addition then revaluation hits again for all new windows, siding an extra garage in ‘98 for example).
Yes newer homes have much higher property tax than older homes with years of depreciation factored in. The condition of the home is also assigned a numeric rating and is factored in, hence new siding or windows triggering a jump in valuation.
The improvement district fees are unique to Clark County I think, I’m unfamiliar with those fees here in Northern Nevada?
I’ve never experienced such exorbitant insurance fees such as you describe in Texas. I think my primary property is around $850,000 in value and my insurance is under $1200/year? No add ons for earthquake or extra protection for wildfire which can be extremely costly.
His cost for homeowners insurance doesn't seem high to me, since he took many options on the policy.
I was paying close to $4k/year in COLO SPGS due to the fire hazards there after two huge fires; google the Waldo Canyon Fire and the Black Forest Fire. Worse, that area is prone to dreadful hail storms each summer, and we had to re-roof in 2007 and 2011. Car insurance is higher in hail alley too. I had coverage for full replacement value of the house.
One example is Florida, with its high hurricane dangers. Insurance for Florida homes built prior to current hurricane-focused building codes may well cost $8k-10k/year.
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The big jump in valuation is usually extensive home improvements and additions. If you really improve the property you can trigger a new depreciation date (say house built in ‘78 revalued to ‘84 for large addition then revaluation hits again for all new windows, siding an extra garage in ‘98 for example).
Yes newer homes have much higher property tax than older homes with years of depreciation factored in. The condition of the home is also assigned a numeric rating and is factored in, hence new siding or windows triggering a jump in valuation.
The improvement district fees are unique to Clark County I think, I’m unfamiliar with those fees here in Northern Nevada?
I’ve never experienced such exorbitant insurance fees such as you describe in Texas. I think my primary property is around $850,000 in value and my insurance is under $1200/year? No add ons for earthquake or extra protection for wildfire which can be extremely costly.
So this sounds like if you have extensive improvements that your taxes (not just your assessment value) can go up more than 3% that year. That does make sense. But, I haven't been able to find anything explaining that does anyone know where to find something about it.
On the property taxes, they are high in Texas. When I lived in the Houston area we had to worry about hurricanes. In the Dallas Fort Worth area we have to worry about hail and tornadoes.
This year my home insurance went up from about $3000 to $4300! The bulk of that was simply increases that were mostly attributable to the statewide February 2021 storm which resulted in very unusual freezing for this area of lots of claims.
We don't have high scheduled personal property limits.
We do have Safeco's Optimum form which gives higher limits and adds some additional coverages. I also pay for some additional coverages which total under $200 a year. The primary ones are service line coverage and foundation water damage.
On the other hand we do get discounts due to having our auto and umbrella coverage with them and having an alarm and being claim free.
I did a quote this year for a different carrier that was about $1400 less than Safeco. But -- they did not offer all the coverages Safeco offers and/or had lower limits. When we move I will need to get comparable quotes to see what I can get. Even so I expect it to be much less expensive than it was in Texas.
I remember when the last big housing crash hit Vegas there was an avalanche of foreclosures. It wasn’t uncommon for angry homeowners to plug sinks, toilets and tubs with concrete and leave the taps running when evicted. It only took a few days for flooding and then black mold to saturate the entire house in the Vegas heat. Those homes were stripped down to the frames and rebuilt eventually. Maybe the valuation and taxes would look crazy in that situation!
Nevada can have wind, earthquake and fire hazards. There are properties that might have to carry flood insurance on a FHA loan. I have never added onto a policy for these hazards mostly because I learned to never file a claim or the insurer makes you pay big time! Wildfire is usually covered and earthquakes don’t usually damage homes much here. Extra flood or fire insurance might be advisable in certain areas.
So for the insurance $$ you would save living in Nevada, you can afford to remodel your home in Vegas to your hearts content and pay a little more in taxes
This was a huge question I had for my realtor and I thought she was misleading me. I just received my tax bill for this year. My total taxes are 1,773.53. I do have a tax cap of 3%. In Texas, this is the homestead. In 2017 we bought this house for 255,000. In our Ardiente community houses of similar size, 1800 Sq Ft. are listed at 509,000.
I thought our realtor was misleading me on taxes, as in Texas you have the ISD tax and the city-county tax. Our tax in Texas was 1600. for the ISD and 1000 for city & county. I was angry and told her you are not giving me the total taxes. LOL, that is our TOTAL TAX of 1773.53 (house built in 2007)
1200 for house insurance sounds VERY high. I am sorry I do not know what we pay, but it was 350. a year. I also thought this was TOO low, but our agent told us you do not have hail, tornadoes, or floods. She did tell me to hang on to my seat as she quoted the car insurance. Between the car and house insurance, it equaled out to Texas. (Kerr County) While we pay 1000, less in taxes in Vegas, our HOA is 217.00 a month. (2,604 in HOA)That includes the guard gate and roving patrol, pools, tennis courts, parks, gym, and clubhouse. The HOA, 217 does not bother me as they are amenities that directly benefit me. I do make use of the pool, sauna, and jacuzzi. There are also the putting green basketball court and bocci ball courts.
Overall my quality of life is better here in Vegas, mainly due to the weather. (breathing, aches, pains from the humidity, boredom......)
You had talked about renting before buying and that may be a good choice given the times. See if you like it, if not move on. My spouse would go back to Texas in a heartbeat if I said let's go, so something you need to consider. I would/will move from here for a smaller highrise IN VEGAS (8-900 sq ft), after my fur babies have left the nest. We have even talked about Wintering in Buenos Aires or 6 months a year in Spain/Europe, but Vegas will always be home.
We are currently looking to buy a crypt, here in Vegas for our ashes, I hope the taxes stop there.
Thanks, I will go through this. I always prefer to read the statute.
Quote:
Originally Posted by Chappy2017
This was a huge question I had for my realtor and I thought she was misleading me. I just received my tax bill for this year. My total taxes are 1,773.53. I do have a tax cap of 3%. In Texas, this is the homestead. In 2017 we bought this house for 255,000. In our Ardiente community houses of similar size, 1800 Sq Ft. are listed at 509,000.
I thought our realtor was misleading me on taxes, as in Texas you have the ISD tax and the city-county tax. Our tax in Texas was 1600. for the ISD and 1000 for city & county. I was angry and told her you are not giving me the total taxes. LOL, that is our TOTAL TAX of 1773.53 (house built in 2007)
1200 for house insurance sounds VERY high.
Yes, this all just sounds insane to me looking at what those things cost in Texas. I am aware some things are more expensive in Nevada. The 3 I have read the most about are car insurance, car registration (it will cost about $700 to register our car), and gasoline. Still my thought was since we only have one car and don't drive to work those extra costs would be less than the ones we are saving on.
Quote:
Originally Posted by Chappy2017
She did tell me to hang on to my seat as she quoted the car insurance. Between the car and house insurance, it equaled out to Texas. (Kerr County)
I knew car insurance was more expensive there but are you saying it will be the same as my house insurance (which is 4300 this year). We pay about $1300 a year for auto insurance. We have one car (2018 Volvo XC60) and no accidents. I was thinking it might go up but not be as much as my house insurance! Of course, maybe mine is more due to where I live in Texas.
I have thought about potentially renting but unless I just can't find something I like I am more likely to buy sooner rather than later once we sell this house. However, I do think we can be pickier than we could have been a couple of months ago. That $450k house I was looking at in April or May is now quite a bit less expensive and the $450k is nicer. And, given the real estate taxes being potentially so much less I realize we may be better off buying a more expensive house than has lower taxes than one less expensive with higher taxes.
I was looking at the current market this weekend and there was a house listed at almost $500k. However, the total cost including taxes and insurance and HOA for that house was less than another house that was listed at $450k but which had much higher taxes and HOA.
Of course, I don't know when we will sell and I do feel fairly "safe" at this point thinking that houses in Las Vegas are likely to go down more in price than houses here. And that would mean that there wouldn't be a huge risk in renting that houses would go up in price while I was renting. Still, if I find the right house I would likely go ahead and buy.
But, we will visit some before then and if it we aren't 100% sure we will rent.
2. If a house is your primary residence your tax will not increase more than 3% a year. If it is not, the cap is 8%.
3. When you buy a house for that year you get the 3% or 8% cap as applicable for the seller. So if you buy from someone who was not the occupying homeowner, then your taxes at the end of that year can go up 8%. Otherwise, it is limited to 3%. For future years, if you have filed that the house is your primary residence you will have a limit of 8%.
Good info, thanks for posting. Aspiring LV resident in a few years here...
Anyone have ideas why property taxes are capped at 8%/yr if someone buys a house that is a rental? Why does it matter to the state/county/city if the house was rented out or occupied by the homeowner?
Are condos subject to same 3%/8% discrepancy?
Can one tell on Redin or any other RE site if the house is a rental or homeowner occupied?
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