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Allodial
Title in Nevada
In 1997, the Nevada Legislature created a new section of statutes within the property tax statutory scheme. Nevada Revised Statutes (NRS) 361.900 to 361.920. These statutes, which are entitled "Allodial Title," became effective on July 1, 1998.
Those who can apply for allodial title is limited:
A person who owns and occupies a single-family
dwelling, its appurtenances and the land on which it is located,
free and clear of all encumbrances, except any unpaid assessment
for a public improvement, may apply to the county assessor to establish
allodial title to the dwellings, appurtenances and the land on which
it is located. One or more persons who own such a home in
any form of joint ownership may apply for the allodial title,
jointly if the dwelling is occupied by each person included
in the application.
NRS 361.900 (1)(emphasis added). After the county assessor
receives the application, he transfers it to the state treasurer. NRS
361.900 (2).
The state treasurer then determines the amount which
is required to be paid by the property owner to establish allodial title.
This is done by using "a tax rate of $5 for each $100 of assessed
valuation on the date of the application." NRS 361.900 (3). The
treasurer must calculate, separately, the amount that must be paid in
a lump sum, and for the payment in installments over a period of not
more than 10 years. Id. These "amounts must be calculated to the
best ability of the state treasurer so that the money paid plus the
interest or other income earned on that money will be adequate to pay
all future tax liability of the property for a period equal to the life
expectancy of the youngest titleholder of the property." Id.
If the property owner pays the lump sum amount calculated
by the state treasurer, and submits proof that the home is a single-family
dwelling occupied by the homeowner, and that the property is free and
clear of all encumbrances except any unpaid assessment for a public
improvement, "the state treasurer shall issue a certificate of
allodial title[.]" NRS 361.900 (5). If the property owner enters
into an agreement with the state to make installment payments (in lieu
of a lump sum payment), the issue of a certificate of allodial title
occurs upon the receipt by the treasurer of the last payment.
NRS 361.900 (6), (8).
Once a property owner receives a certificate of allodial
title, he is relieved from the payment of all further property taxes, "unless the allodial title is relinquished by the homeowner or
his heirs." NRS 361.905 (2). Instead, the state treasurer is responsible
for the payment of the taxes due. NRS 361.905 (3).
Once allodial title is established, it "is valid
for as long as the homeowner continues to own the residence unless he
chooses to relinquish the allodial title[.]" NRS 361.910 (1). Upon
the death of an allodial title holder, the heir or heirs can reestablish
allodial title by using the same procedure that the original property
owner used. NRS 361.910 (1)-(9).
The holder of an allodial title can voluntarily relinquish
it at any time. NR8 361.915 (1). The title shall be relinquished
if the property is sold, leased or transferred by the allodial title
holder; the allodial title holder no longer occupies the dwelling for
150 days; or the home is converted to anything other than a single-family
dwelling occupied by the owner. Id. If allodial title is relinquished,
either voluntarily or otherwise, the property owner receives a refund
of the unused portion of the payments made to originally establish the
allodial title. NRS 361.915 (3)-(4). Once the allodial title is relinquished,
the property owner is once again responsible for all future property
taxes. NRS 361.915 (5).
The importance and benefit of establishing allodial
title extends beyond the non-payment of property taxes. It also has
significance in the area of homestead law. Pursuant to NRS 115.010 (2),
the available homestead exemption in Nevada is $125,000. However, if
allodial title has been established and not relinquished, the homestead
exemption "extends to all equity in the dwelling, its appurtenances
and the land on which it is located." Id. (emphasis added).
Furthermore, although the regular homestead exemption provides no
protection against legal process to enforce the payment of obligations
contracted for the purchase of the property, or for improvements made
thereon (including any mechanic's lien lawfully obtained), or for legal
taxes, or for any mortgage or deed of trust executed upon the property,
NRS 115.010 (3), the holder of an allodial title is fully exempt
from all of these under the homestead laws. NRS 115.010
(4). The only area within the homestead laws wherein allodial title
fails to provide an extra benefit is in the realm of civil and criminal
forfeiture of property. NRS 115.010 (5). Similar to all property in
Nevada, property held by allodial title is subject to forfeiture for
criminal conduct.
Despite this one area, allodial title provides significant
benefits to those who qualify for it. These benefits are tremendous
in the areas of property tax and homestead. If one can pursue allodial
title, it may well be worth the cost to do so.
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