Cost Segregation in Nevada

Zero state income tax, ultra-low property taxes, and one of America's strongest STR markets — Nevada delivers pure federal cost segregation savings with no state tax drag, plus Las Vegas's unmatched tourism economy driving premium short-term rental revenue.

Population
3.2M
Median Home
$420K
Property Tax
0.53%
7th lowest in U.S.
State Income Tax
None
No State Income Tax
Bonus Depreciation
Partial
State Conformity
Avg. Insurance
$1,500
35% below average
Tax Strategy

Cost Segregation & Tax Rules in Nevada

Understanding how federal and Nevada state tax rules interact is critical to maximizing your cost segregation benefits.

Cost Seg Overview
State vs. Federal Rules
Tax Landscape
Median Home Price
$420K
Building Value
74%
of purchase price
Cost Seg Range
25-38%
of building reclassified
Median Home Age
22 yrs
Built ~2002
What Gets Reclassified

A cost segregation study identifies building components that can be depreciated over 5, 7, or 15 years instead of the standard 27.5 or 39 years. In Nevada, typical reclassification rates are 25-38% of building value.

Common Property Types
Single-Family DetachedStucco/Block ConstructionTownhomesCondos/Vacation Units
Nevada's newer housing stock (median 2002) features abundant depreciable components — HVAC systems, pool equipment, desert landscaping, outdoor living areas, and modern finishes.
Overline Study Cost & ROI
Overline Study Cost
$499 - $2,000
Avg. ROI
10-40x

The math: A $420K property with 74% building value and 30% reclassification yields ~$34K in Year 1 federal tax savings at the 37% bracket — significantly more ROI than traditional studies costing $5,000-$10,000+.

Housing Stock Advantage

With a median build year of 2002, Nevada's housing stock has identifiable components (HVAC, electrical, plumbing, landscaping) that are strong candidates for accelerated depreciation.

N/A — No State Income Tax
Nevada Bonus Depreciation Conformity

Nevada has no state income tax, so bonus depreciation conformity does not apply. All cost segregation benefits are realized on your federal return only.

What This Means for Your Investment: With no state income tax, Nevada investors receive the cleanest cost seg benefit — 100% federal bonus depreciation with zero state-level complexity. No addback calculations, no conformity issues.

Federal vs. NV Depreciation Timeline
PeriodFederal TreatmentNV State Treatment
Year 1100% bonus depreciationN/A — No state income tax
Years 2+Standard MACRS schedulesN/A — No state income tax
Section 179 Expensing
State ConformityLimited

Section 179 deductions are federal-only in Nevada due to the state's zero income tax. NV's STR-heavy market means investors often have significant personal property (furniture, fixtures) that qualifies for Section 179 beyond the standard cost seg components.

Key Takeaway

A $420K property with a $311K depreciable basis and 30% cost seg reclassification yields ~$34.5K in federal tax savings in Year 1 — and with no state income tax, that's your total savings with zero complexity.

Bottom Line

Nevada's zero state income tax means your federal cost seg savings are your total savings — and you keep 100% of all rental income without state tax drag. The simplicity is a major advantage for portfolio investors.

Eff. Property Tax
0.53%
7th lowest in U.S.
Transfer Tax
$1.95 per $500 of value in Clark County; $1.30 per $500 in other counties
State Income Tax
None
No State Income Tax
Property Tax Details

Nevada's property tax system caps annual increases at 3% for primary residences and 8% for investment properties. Clark County (Las Vegas) effective rate is ~0.54%, Washoe County (Reno) is ~0.62%.

Assessment Methodology
MethodTaxable value at 35% of replacement cost less depreciation
Reassessment CycleAnnually
Assessment BodyCounty Assessor
Appeal WindowJanuary 15 for the current tax year
Appeal Success Likelihood
Moderate
LowModerateGoodVery High

Nevada's unique cost-based approach (replacement cost minus depreciation) differs from market value methods. This creates appeal opportunities when replacement costs are inflated. The 3% annual cap on property tax increases (AB 489) provides strong protection for investors.

Work with Overline — Our team helps Nevada investors identify over-assessed properties and file tax appeals. A successful appeal can save thousands annually and compounds your cost seg savings.

Illustrative Example

Cost Seg Example for Nevada

This example assumes a purchase eligible for 100% bonus depreciation. All factors below are based on averages from our historical cost segregation studies for NV properties. To see your exact savings, run a property-specific cost seg analysis below.

Typical Nevada Property Details
$
50%95%
5%35%
2%25%
Total Reclassified30% of building
10%37%
Estimated Year 1 Tax Savings
Building Value$310,800
$420,000 x 74%
Normal Annual Depreciation$11,302
$310,800 ÷ 27.5 yr (residential)
5-Year Reclassified$55,944
15-Year Reclassified$37,296
Total Accelerated$93,240
30% of $310,800 building value
Federal Tax Savings (Year 1)$34,499
$93,240 x 37% bracket
Total Year 1 Tax Savings$34,499
8.3x normal annual deduction captured in Year 1

NV State Tax: With no state income tax, Nevada investors receive the cleanest cost seg benefit — 100% federal bonus depreciation with zero state-level complexity. No addback calculations, no conformity issues.

Depreciable Basis

Land vs. Building Value in Nevada

The land-to-building ratio directly impacts your cost segregation benefit — only the building portion is depreciable. Here is how Nevada breaks down by region.

Statewide Average
Building (Depreciable)74%
Land (Non-Depreciable)26%
74%
Depreciable Basis
Breakdown by Region
Las Vegas (Strip Corridor)
68% Building

Higher land premiums near the Strip. STR revenue can offset reduced depreciable basis.

Las Vegas (Henderson, Summerlin)
76% Building

Suburban master-planned communities offer stronger building ratios with newer construction.

Las Vegas (North Las Vegas)
80% Building

Affordable land values create the best cost seg economics in the metro.

Reno / Sparks
72% Building

Growing tech economy has increased land values. Building ratios remain favorable.

Rural Nevada
85% Building

Very affordable land but limited rental demand outside metro areas.

Investor Takeaway

North Las Vegas and Henderson suburbs offer the best cost seg economics at 76-80% building values. The Strip corridor has higher land costs but compensates with premium STR revenue. Reno's tech economy drives 72% building values with strong tenant demand.

Insurance & Risk

Insurance Landscape in Nevada

Insurance costs directly impact your cash flow. Understanding Nevada's risk profile helps you budget accurately and avoid coverage gaps.

Avg. Annual Premium
$1,500
35% below average
National Average
$2,300
for comparison
Premium Trend
Rising 5-7% annually, driven by increasing wildfire risk in northern NV
Primary Risk Drivers
1
Desert Heat & HVAC Stress
Extended 110°F+ periods stress HVAC systems and roofing materials. Equipment failure claims are the primary driver.
2
Flash Flooding
Monsoon-season thunderstorms cause sudden flash floods, particularly in newer developments that changed natural drainage patterns.
3
Wildfire (Northern NV)
Reno-Tahoe area faces increasing wildfire risk. Some insurers restricting coverage in the urban-wildland interface.
Coverage Recommendations
Standard homeowner's policy with replacement cost coverage
Extended HVAC coverage given extreme heat stress
Flood insurance for properties near washes or flood channels
Umbrella liability policy ($1M+) for rental properties, especially STRs
Cost Seg + Insurance Connection

Nevada's low insurance costs are a major cash-flow advantage. A cost seg study documents HVAC, pool, and hardscaping components that face extreme desert conditions — ensuring accurate replacement cost estimates.

Market Fundamentals

Economy & Housing Demand in Nevada

Strong economic engines create stable rental demand. Here is what drives Nevada's economy and housing market.

State GDP
$215B
Growing 3.5%/year
Unemployment
4.8%
Below national average
Median Income
$68,000
+20.8% over 5 years
Pop. Growth (1Y)
+1.5%
+50,000/year net migration
Major Industries
Tourism & Hospitality25%
Las Vegas Strip generates $45B+ annually. 40M+ visitors/year. MGM, Caesars, Wynn, and Sands are the largest employers.
Gaming & Entertainment12%
Nevada's gaming industry generates $15B+ annually. Sports betting, conventions, and entertainment (Sphere, F1) drive growth.
Technology10%
Tesla Gigafactory (Reno), Apple, Google, and Switch data centers. Northern Nevada is a growing tech hub.
Healthcare9%
HCA Healthcare, UMC, Renown Health. Healthcare employment growing rapidly to serve expanding population.
Logistics & Distribution8%
Amazon, FedEx, UPS major distribution hubs. Nevada's location and no state tax make it a logistics nexus.
Key Economic Engines
Las Vegas Strip: $45B+ annual revenue, 40M+ visitors, 200K+ hospitality jobs
Tesla Gigafactory (Reno): 12,000+ employees, $6B+ invested
Las Vegas Raiders + F1 Grand Prix: $2B+ annual economic impact
Convention industry: CES, SEMA, CONEXPO draw millions of business travelers annually
Housing Demand Signals
5-Year Pop. Growth
+8.5%
Housing Permits YoY
+12.5%
Median Days on Market
32 days
Months of Inventory
2.2
Migration: California exodus driven by no income tax and lower cost of living. Remote workers choosing Las Vegas and Reno for lifestyle and tax advantages.
Construction: Stucco over wood frame, Tile roofing, Slab-on-grade foundation, Desert landscaping with hardscaping
Landlord & STR Rules
Landlord Friendliness
Friendly
Eviction Timeline
30-45 days
Rent Control
Prohibited statewide (NRS 118A.390)
STR Regulation
No statewide ban

Nevada requires a state business license for STR operators. Clark County requires a short-term rental permit. Unincorporated Clark County rules differ from the City of Las Vegas.

Local Markets

Top Cities for Investors in Nevada

Explore city-level cost segregation data, sample deals, and investment fundamentals for each major market in Nevada.

Las Vegas, NV
#1 STR Market
Median Home
$400K
Rent (3BR)
$2,000
Property Tax
0.54%
Avg. Insurance
$1,400/yr
Est. Year 1 Tax Savings$33K+
View Las Vegas Details
Reno, NV
Tech & Logistics Hub
Median Home
$475K
Rent (3BR)
$2,200
Property Tax
0.62%
Avg. Insurance
$1,600/yr
Est. Year 1 Tax Savings$35K+
View Reno Details
Local Partners

Investor-Friendly Partners in Nevada

We are building a curated directory of top investor-friendly brokers, property management companies, and service providers in Nevada.

Investor-Friendly Brokers

Top real estate agents who specialize in investment properties and understand cost segregation, 1031 exchanges, and cash-flow analysis.

Coming Soon
Property Management

Vetted property managers who handle tenant screening, maintenance, and rent collection for both long-term and short-term rentals.

Coming Soon
Insurance Agents

Independent insurance agents who specialize in rental property coverage and can leverage cost seg data for accurate replacement cost estimates.

Coming Soon

Are you a broker, property manager, or insurance agent serving investors in Nevada?

Partner With Overline
Frequently Asked Questions

Cost Segregation FAQ — Nevada

Does Nevada conform to federal bonus depreciation?

−

Nevada has no state income tax, so bonus depreciation conformity does not apply. All cost segregation benefits are realized on your federal return only.

What is the property tax rate in Nevada?

+

The effective property tax rate in Nevada is 0.53%, ranked 7th lowest in U.S. in the U.S. Nevada's property tax system caps annual increases at 3% for primary residences and 8% for investment properties. Clark County (Las Vegas) effective rate is ~0.54%, Washoe County (Reno) is ~0.62%.

How much can I save with cost segregation in Nevada?

+

A $420K property with a $311K depreciable basis and 30% cost seg reclassification yields ~$34.5K in federal tax savings in Year 1 — and with no state income tax, that's your total savings with zero complexity.

What are the typical cost segregation reclassification rates in Nevada?

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In Nevada, typical cost segregation studies reclassify 25-38% of building value into accelerated depreciation categories (5-year, 7-year, and 15-year property). Overline studies cost $499-$2,000 with 10-40x ROI.

What is the average insurance cost for rental properties in Nevada?

+

The average annual homeowner insurance premium in Nevada is $1,500, which is 35% below average the national average of $2,300. Key risk drivers include Desert Heat & HVAC Stress and Flash Flooding.

What is the state income tax rate in Nevada?

+

Nevada has a state income tax rate of None (No State Income Tax). Nevada has no state personal income tax, no corporate income tax, and no franchise tax. 100% of your rental income and cost segregation benefits are free from state income tax.

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