2007 Nevada tax change cut cost of property deals


LAS VEGAS (AP) — In 2007, not long before Las Vegas’ frenzied real estate market imploded, Nevada lawmakers approved a seemingly minor tweak to a tax law.

The change ensured property owners could use a range of entities when shifting real estate to an affiliate to exempt these transactions from transfer taxes, according to an investigation by the Las Vegas Review-Journal.

Since then, the exemption has been cited in several lucrative deals on or near the Las Vegas Strip resort corridor — and an attorney who lobbied for the change indicated recently that this trend wasn’t the intent of the legislation.

Overall, at least two dozen or so transactions in the Las Vegas area, totaling $27.5 billion, have closed since 2007 without any publicly reported real estate transfer taxes, according to a Review-Journal report titled “How Las Vegas’ biggest real estate deals result in no transfer taxes.”

Each of these deals were between separate buyers and sellers and involved hotel-casinos, malls and other properties mostly on or near Las Vegas’ famed casino corridor.

However, in about half of the deals tracked for this report, deeds filed with Clark County cited a transfer tax exemption allowed under state law when property owners transfer real estate from one entity to its parent, subsidiary or affiliate.

Such deals include the $4.2 billion cash sale of Bellagio’s real estate; the $3.89 billion sale of the Aria and Vdara’s real estate; and the $1.1 billion sale of luxury mall Shops at Crystals.

Collectively, those three sales alone could have generated nearly $47 million in transfer tax revenue.