• Prop 13 portability does not cross state lines. You cannot transfer your California property tax base to Nevada. Your Nevada property will be assessed at current market value.
• Nevada property taxes are generally lower than California's. Effective rates in Clark County are around 0.70% vs California's 1.0-1.2%+, but you lose the annual increase cap.
• No state income tax in Nevada. This is the single biggest tax advantage for high-income Californians moving to Nevada.
• Capital gains exclusions still apply. If you've lived in your California home 2 of the last 5 years, you can exclude up to $500,000 (married) of capital gains when you sell.

Navigating Prop 13 and Nevada Taxes

California's Proposition 13, passed in 1978, caps property tax rates at 1% of the property's assessed value and limits annual assessment increases to 2% or the rate of inflation, whichever is lower. This means longtime homeowners often pay property taxes based on values far below current market rates.

For example, a home purchased in 1990 for $300,000 may have a taxable assessed value of $500,000 today, while its market value could be $2 million. The homeowner pays property tax on the $500,000 assessment, not the $2 million market value.

Eligibility for portability: You must be 55 or older, severely disabled, or a victim of a natural disaster. The replacement home must be of equal or lesser value, and you must move within two years of selling your original home.

Prop 13 portability is a California-only program. It does not extend to other states, including Nevada. When you move out of California, you leave your Prop 13 tax base behind.

However, there are still ways to manage your tax liability:

• Capital gains exclusion: If you've lived in your California home as your primary residence for at least two of the last five years, you can exclude up to $500,000 (married) of capital gains from federal tax.
• 1031 exchange: For investment properties, a 1031 exchange allows you to defer capital gains tax by reinvesting proceeds into a like-kind property in Nevada.
• Step-up in basis: Inherited property receives a step-up in basis to market value at the time of inheritance, which can reduce capital gains tax if sold.

Nevada's property tax system is more straightforward than California's. There is no state income tax, and property tax rates are generally lower. However, there is no equivalent to Prop 13's cap on annual assessment increases for all properties.

Smart planning can help you minimize taxes and maximize savings when relocating:

• Time your sale: Ensure you meet the 2-out-of-5-year rule to qualify for the capital gains exclusion. Sell your California home before purchasing in Nevada to access your equity.
• Consider a 1031 exchange: If you own investment property in California, a 1031 exchange into Nevada property can defer capital gains tax indefinitely.
• Establish Nevada residency: File a Nevada driver's license, register to vote, and move your banking to Nevada to establish domicile and avoid California income tax.
• Work with a tax professional: A CPA familiar with California-Nevada relocation can help you structure the move to minimize state tax liability.

The Chen family owned a home in Cupertino purchased in 2005 for $1.2 million. In 2025, the home was worth $3.5 million. They sold the home, excluded $500,000 of capital gains, and used the remaining equity to purchase a $1.8 million home in Summerlin, Las Vegas.