No State Of Nevada Income Tax Equals More Money For YOU
Las Vegas tax rates and the Las Vegas Property Tax rates are significant benefits of living in Nevada. The good news is that there is no state income tax in Nevada, no matter where you live. Nevada has no state income tax because tourists pay most of the state’s taxes. They do this with the hotel room tax and the tax on the casinos’ revenue. Also, the State of Nevada receives a percentage of sales tax and property tax revenue.
What Is The Sales Tax In Las Vegas
The Las Vegas sales tax rate is 8.375% in 2022. The State of Nevada sales tax rate is 4.6%, added to the Clark County rate of 3.775% equals 8.375%.
This is also the Henderson sales tax rate, the North Las Vegas sales tax rate, and the Clark County sales tax rate.
When is Las Vegas, Nevada Sales Tax Charged?
Non-food items are taxed in Nevada. Sadly, candy is not considered food and is taxed. Most food is not taxed in grocery stores. Soda is not taxed, but alcohol is taxed in stores. All restaurants tax their food and drinks. Services do not get taxed in Nevada. Interesting things that are exempt from sales taxes are farm equipment and newspapers.
Cities in the Valley also add their additional tax to gasoline prices. The least expensive gasoline in the entire state of Nevada is in the boonies. This is because each Nevada county has a different tax rate, and gas stations not in a city enjoy the best tax rates in Nevada. Technically, gas on the Strip would cost less, except the price of land in that area is insane.
Benefits of Living in Nevada 2021
Las Vegas tax rates and other benefits of living in Nevada draw many of the 5000 people a month who relocate to the Las Vegas Valley. Even though the cost of living in Las Vegas, Nevada charts say that Nevada’s cost of living is 4% higher than the national average – don’t believe it!
The Cost of Goods in Nevada is still more affordable than in most of the country. The numbers are skewed because most published Las Vegas statistics include Las Vegas Strip food and hotel charges, tourist activities, and retail pricing.
Some benefits of living in Las Vegas are low utility costs, the newness of housing, and housing affordability. The Las Vegas tax structure often pushes Nevada to the top of the “Best Place To Live” list.
Tourists pay room tax which contributes significantly to the state’s coffers. Residents save money, so we have to put up with some downsides.
Nevada is one of 6 states in the United States with no state income tax. That means that many relocating residents will receive a tax benefit of up to 24% – depending on the state and tax bracket they are leaving.
The most significant benefits of living in Nevada are more than just the lack of a Nevada State Tax. We are a happy city. Surrounded by beautiful state and federal recreation areas, Nevada’s sky is blue, and the weather is mild ten months a year. Traffic is minimal, and there’s always something to do!
Specific Nevada Tax Benefits
Nevada’s tax benefits are great for families, businesses, and retirees. Here’s why:
- Zero – No Nevada State Income Tax
- No Nevada Inheritance Tax after 3 years of residency
- There’s No Corporate Income Tax
- No Inventory Tax
- There’s No Franchise Tax
- Property Tax In Southern Nevada – is about 1% or less of the property’s value.
- Nevada’s average Property Tax is .77% – National average is 1.19%
- The sales tax In Las Vegas is 8.375%
Besides tax items listed above, there is a sales tax in Las Vegas for candy, medical supplies, and over-the-counter medicine for people.
Property Tax In Las Vegas, Nevada
Are you moving to Las Vegas or Southern Nevada? Choosing between a brand new construction home or an older one significantly affects the property tax you’ll pay. About 20 years ago, the way Nevada taxes real property changed. There is now a property tax increase cap.
The Nevada Department of Taxation, Clark County Treasurer, and the Nevada Assessor’s Office still assess brand new home sales at approx. 1% of the sales price annually. Existing homes are assessed using the same formulas. The difference is the starting point of the property taxes. Since there was no previous home, a brand new home’s tax is based only on its assessed value, which is basically the purchase price. An existing home’s current property tax is the lesser of the tax on the assessed value or the previous year’s tax with the maximum increase added to it.
Our property tax cap in Nevada, or how much the tax can increase in a year, is 3% for owner-occupied homes and 8% for investor-owned homes. For any house built in 2011 or earlier, its tax got lowered to the assessed value at that time. The median price of a home in 2011 was about $120,000. The property tax would have been $1200 per year with a 1% tax rate. That house would be assessed at $465,000 today, and the tax would be $4650 per year. With the tax cap of 3%, the $4650 tax goes down to $1612 per year. So you can see the difference. Two houses with the same value, one being brand new and the other being 11 years old. Both have the same value. The tax on the new one is $4650, and the tax on the other is $1612. What a difference!
Owner Occupied vs Investor Property Tax
In future years, real property tax can go up a maximum of 3% per year if the property is owner-occupied. If the property is an investment house, an 8% rate increase is possible each fiscal year. With the current market values, the tax difference can be a lot depending on the age of the home.
If the property is sold, the new owner continues at the same rate that the previous owner had until the next tax year. Then the increase rate could change depending on if the property is owner-occupied or if it’s an investment home. YOU MUST FILE with the Tax Assessor to keep the 3% or to change to a 3% rate increase with a resale home purchase.
If you buy a new or resale home, check that your cap rate is correct on your annual assessment and bill. They will adjust your rate for the NEXT year if their June deadline date has passed. This can also be done online.
Residency status is reported thru escrow but not necessarily applied. Request a reassessment from the county assessor’s office if there is an error. If you feel your tax is too high, you can always have your taxes re-assessed. This can especially be an issue if you purchased a former rental property.
What’s The Truth About Nevada’s Cost of Living
Room tax continues to go up to cover many things in Nevada. With 150,000+ hotel rooms filled each night in Vegas alone, a 13.38% room tax adds up quickly. I thank all tourists for paying my state income tax and consider that a benefit we receive for sharing our city.
So, what’s the catch? Doesn’t there have to be a downside? What’s expensive in Nevada? OK, let’s talk about that. Here are some truths about Nevada’s Cost of Living:
Another big factor in housing is when big events happen at the same time. An example was the PAC 10 Tournament and the NFL draft scheduled in March of 2020. There was such demand that room rates started at $600 for a basic hotel room. Can you imagine the dollar signs in the minds of AIR BnB owners? The Raiders moved to town, and high-end furnished rentals were having bidding wars during the pandemic and beyond.
Homeowners didn’t mind raising rents in all levels of housing because people were flooding out of cities. In 2020-2021, Las Vegas housing was affordable and commanded a decent rent. Residential housing penciled out as a good investment. Many investors purchased, which also raised demand and single-family home prices.
Yes, higher values ultimately raise property taxes and city revenue. It also added to the monthly housing cost of living. Homeowner’s insurance goes up right along with home values, adding more costs to every house in the city.
In Las Vegas, almost every house is in an HOA , and inflation raises monthly costs. HOA’s also need to add funds to balance the Reserves. The cost of living in Las Vegas housing went up a lot in the last two years, yet it’s still lower than in many states and cities.
Car Insurance Costs
Because 250,000 tourists visit The Las Vegas Strip each weekend, their statistics are added to the 2 million residents’ stats when they crash their cars or commit a crime. Drunk drivers also negatively affect Nevada insurance rates. Residents and tourists drive nice cars, which creates expensive crashes.
Insurance rates are calculated by using the city’s population divided by the number of accidents and the costs of those accidents. Because Las Vegas’ 250,000+ tourists each day don’t count in the population numbers, we have to absorb their accident numbers in our ratios. The bottom line? Las Vegas Valley residents pay higher car insurance rates than most of the country.
The higher insurance rates aren’t as bad as they could be. We pay around $250 a month for two cars and two drivers. But hey, car registration is lower than California’s. Gas used to cost less than in many states. Of course, when looking at the benefits of living in Nevada- paying NO Nevada State Income Tax can be huge. For most, this far outweighs the additional expenses!
Cost Of Goods- Bad Stats Are Good For Residents
Not only are insurance statistics skewed, but the cost of living in Southern Nevada is also lower than what they say. The Cost of Goods chart doesn’t differentiate between tourist pricing and resident prices. Rent on the Las Vegas Strip is high. Therefore, all consumable goods on the Strip are priced higher.
Gas on the Strip can be $.50 – $1 more than in the residential areas of the Valley. But still, their prices are averaged in the cost of goods chart for Las Vegas. Same thing for food. Restaurants in luxury casinos charge $100+ for a prime steak dinner, where my neighborhood restaurants are around $50. Due to fresh produce, meat, and seafood arriving at hotels daily, we always have fresh food for good prices everywhere in the city. However, those gourmet restaurants that tourists eat in can be rather pricey! They definitely skew the statistics.
Local Discounts In Las Vegas
On the other hand, we have neighborhood casinos. Food in casinos is discounted to bring you in their doors. The price of beer and cocktails almost gives me a heart attack when we visit other states. Friends compare our grocery ad prices with their city and state and are envious.
Food and Freight in Southern Nevada is another interesting topic. I’ve written a blog about that called Food and Freight. Being such a consumable city, where food for hotel guests is trucked in daily, many trucks leave empty. Empty trucks raise the cost of food.
Wanting to fill trucks with out-going products, Las Vegas has attracted many freight-consuming industries. Offering less expensive trucking rates, it’s a win-win for everyone. These companies include Ben and Jerry’s, Big O Tires, Home Shopping Network, Ocean Spray Cranberries, and Sephora, to name a few.
Crime Rates In Las Vegas
The Las Vegas Metropolitan Police Department covers much of the Las Vegas Valley neighborhoods. Statistics show the police-to-resident ratios in the crime statistics. But, they don’t add for the 250,000 tourists on the Strip every day. When accounting for tourists, the police-to -000 residents ratio is near 1.5%.
Las Vegas should have more officers, and they are working hard to remedy hiring issues. Many vacationers will get drunk and get into trouble. Another problem with the crime rate statistics in Las Vegas is that they don’t account for private security personnel employed by resorts.
Private Security officers do not make arrests, but their skills are valuable. Facial Recognition Software accounts for arrests of fugitives, which also adds to the crime stats. We have support from Homeland Security, the Nevada Highway Patrol Headquarters, and the Clark County Sheriffs. Understaffed? Yes. Lacking? No.
When you see crime stats about Las Vegas, know that both the police and crime rates are not the city’s reality. Crime rates are higher during certain conventions, events, and concerts. Henderson, which is 5 miles from The Strip, was named “The #2 Safest City In The U.S.” in 2019. Search crimes in a specific area in the links listed under “Buyer” in our menu bar.
Moving To Southern Nevada Perks
Many new residents are surprised after moving to Nevada how many State Parks are in the area with numerous outdoor activities. Besides homes with low home prices, areas are beautiful. Another one of the benefits of living in Nevada is a healthy lifestyle.
Personally, my favorite thing about living in Nevada is the friends I’ve made. I think that people aren’t surrounded by old friends and family, so they have more time to socialize. Going to events and shows with people we know are wonderful memories.
Weigh the pros and cons of living in a city vs. county area of the Valley. We find that the difference is minuscule. Most people choose to live where it suits their lifestyle. Las Vegas tax rates are usually not determining factors.
Las Vegas Cost of Living Stats
Even though Las Vegas is the largest Nevada city, other large Nevada cities and towns also have very similar skewed cost-of-living and crime rates. Large tourist cities in Nevada, like Laughlin, South Lake Tahoe, and our Biggest Little City, Reno, also get hit particularly hard.
The Nevada tax rates are certainly attractive. However, there’s a “team” spirit that makes us want to stay and be a part of this incredible energy. Calling Las Vegas home for over 30 years has shown us a lot of exciting changes and growth. What makes us proud of the community are the creative problem-solving companies and people that also call Southern Nevada home.
This blog was written by Kurt Grosse. Kurt is a 26+ year Las Vegas Top-Producing Realtor and former Nevada Building Engineer, a PE, CE. Kurt is known by his clients as “The Protector.” With how quickly homes are built in Southern Nevada, his services can be invaluable. If you’re thinking about a Las Vegas or Southern Nevada move, give Kurt a call – 702-750-7599.