Douglas lakeside residents facing huge tax hikes
The value of property on the Lake Tahoe side of Douglas County may increase as much as 60 percent come October if Nevada tax officials have their way.
If approved by the Nevada Tax Commission in October, appraised land values would increase by 45 percent along Kingsbury Grade to 60 percent along Highway 50 on the Lake Tahoe side of Douglas County.
The Nevada Tax Commission has directed County Assessor Doug Sonnemann to come up with an updated land appraisal plan, saying in part that county property taxes collected at the lake are not enough to meet the state’s needs.
Appraisals were last done for the region in 2000 and 2001. Sonnemann said there hasn’t been a need for large-scale property tax hikes because there haven’t been enough land sales on the Nevada side of Lake Tahoe to justify the increases.
However, pressure from the state’s tax department has forced the change, mirroring changes in Washoe County, which saw property taxes go up by as much 49 percent in one year.
“We recommended last year to the tax commission not to have an increase,” Sonnemann said. “In October, the state’s taxation department asked for a 100 percent increase. At that point, we didn’t have enough information and so the commission came back asking us to look at sales and come up with a factor for this year.”
The proposed plan is twofold. First, land values on homes along Kingsbury Grade would increase by 45 percent, with a formula of a 15 percent increase per year since the 2001 appraisal. Because property along the Highway 50 corridor was last appraised in 2000, the increase would be 60 percent or 15 percent multiplied by four years.
The 15 percent per year formula is based on two years worth of land sales, the sale and resale value of homes and the median sale price in the Lake Tahoe Basin for a single family residence.
For a home along the Highway 50 corridor with a taxable land value of $500,000, an additional $2,300 would be added to the property tax bill.
Lakeridge property owner John McCall compared the tax hike proposal to conditions in California before Proposition 13, a 1978 initiative that essentially caps property taxes at about 2 percent a year.
“Now we have the prospect of greatly increased taxes on our homes: the same parcel, the same view, diminishing services and aging structures to feed an insatiable desire to develop and spend,” McCall told Douglas County leaders last week. “You will drive away these residents and further tilt our population to part-timers with attendant damage to our communities. Property values will be at risk.”
Douglas County manager Dan Holler said the proposed tax hike is out of the hands of county leaders. He added that he doesn’t know what precipitated the change.
“I’m not sure if it was someone who thought we could get more out of the lake, but it definitely looks like it was driven at the state level,” Holler said. “We think we had a good method in the past but if we are told to do it by the state, we shall.”
Next month the tax commission will review a study of lake property and in October the commission will meet with Sonnemann to vote on the proposal.
California property taxes are governed by Proposition 13, which rolls back the high cost of escalating property values by a rate of about 2 percent a year. The assessor’s office can only appraise property upon a change of ownership or when there is new construction.