Nevada property‑tax structure leaves Reno roughly where it was a decade ago, city briefing finds

A city presentation on Sept. 10 described how Nevada’s property‑tax rules, including a long‑running annual taxable‑value cap and a 1.5 percent annual depreciation on improvements, have limited local property‑tax growth — even as parcel values rose.

Jeremy Aguero, a consultant to local governments, told the Reno City Council that statutory abatements, inflation and the state’s assessment rules mean Washoe County would abate about $265 million in property taxes this year. After accounting for inflation and population growth, Aguero said Reno’s property‑tax revenue in 2025 is roughly equivalent to the city’s revenue in 2009 on a per‑capita basis. The consultant highlighted the state’s unique treatment of residential improvements — replacement‑cost assessments with a 1.5 percent annual depreciation down to a salvage value — and Nevada’s 35 percent assessment ratio as drivers of revenue stagnation.

Aguero laid out three steps in property tax calculation: (1) property value assessment (land at market value; improvements at replacement cost less depreciation); (2) application of statutory assessment and tax rates (the $3.66 per $100 maximum rate for operating levies); and (3) statutory abatements, which limit annual tax bill increases for homeowners (3 percent cap) and other properties (8 percent cap) and, in many cases, shield a growing share of value from taxation. State constitutions and statutes also treat net proceeds from mines differently.

City officials said the cumulative effect of abatements and exemptions has left cities to depend heavily on other revenue sources and growth to fund public services. Aguero showed that increasing property‑tax rates would produce little revenue while abatements continue to grow, and argued that only structural changes at the state level — or a future burn‑down of abatements during declining values — could materially alter long‑term city revenue projections.

Several council members asked how changes could be pursued. Aguero said options include legislative change at the state level (including difficult constitutional changes), voter initiatives, or regional steps to diversify revenue. He also urged the city to consider advocacy with the Legislature and to study balanced solutions for future budgets.

Councilmembers and the mayor said the presentation provided useful context for the city’s budget challenges and asked staff to continue work on revenue diversification and to brief council before the next budget cycle.