Casinos were not enough to cover the Nevada state deficit in 2002, so the state legislature passed an $836 million tax package, which included a tax rate of $1.30 on each $500 value of property. This comes on top of the current county property transfer tax, bringing the total to $5.10 for every $1,000 of value, a little more than double the current total tax. The tax is imposed on the deed. Traditionally, transfer taxes are paid by the seller, but on a new home, they are paid by the purchaser.
The increase is having an effect, according to the Las Vegas Review-Journal. Buyers of new homes whose money would have bought upgraded cabinets and appliances are instead paying the real property transfer tax increase, which became effective in October. The transfer tax on a new $200,000 home was $500 in 2002. Today, it is $1,020.
Many home buyers and sellers aren't aware of the tax until they get hit with it. A spokesman for the Governor's Task Force on Tax Policy estimated that the increased tax will generate $122 million in revenue for the state. Mark Stark, owner of Prudential Americana Group Realtors, lobbied on behalf of the real estate industry in the state capitol and says the amount could have been nine times worse.
New home sales in Las Vegas are up 4.2 percent this year, to 15,289 through August, according to Home Builders Research, a housing research firm specializing in the Las Vegas market.
Learn more about markets featured in this article: Las Vegas, NV.