TL;DR: Moving to Incline Village can end your California income tax bill, but only if you really move. Nevada has no personal income tax. California's top rate is 13.3%. Buying a second home here changes nothing if your life stays in California. California looks at where your closest ties are, not what you own. Plan the move with a CPA first, then buy the home that fits the plan.
People have called this town "Income Village" for years. The nickname is half joke, half business plan. Moving to Incline Village from California puts you in a state with no personal income tax, on the shore of the same lake. For a high earner, that can be worth six or seven figures a year.
It's also where a lot of buyers get it wrong. I've sold homes around Lake Tahoe since 2017, in Incline Village and across the state line in Truckee and Tahoe City. The most expensive mistake is also the simplest. Someone buys a house in Nevada and assumes the house did the work. It didn't.
California doesn't care what you own. It cares where you live. This post covers what the move really saves, what California checks, what it still taxes after you leave, and how Nevada property taxes work.
One note before we start. I'm a real estate agent, not a CPA or tax attorney. Use this to ask better questions, then get real tax advice before you act.
Does Moving to Incline Village Get You Out of California Income Tax?
Yes, if you truly become a Nevada resident. Nevada does not tax personal income, and California's rates run from 1% to 13.3%. But California keeps taxing you as a resident until your closest ties are in Nevada. Owning a home in Incline Village is one tie. It is not the whole test.
Start with the Nevada side. The Nevada Department of Taxation says the state does not impose a state income tax on individuals. There is no state return to file.
California is the opposite. It has nine tax brackets from 1% to 12.3%, plus an extra 1% on income over $1 million. That makes the top rate 13.3%. Investment gains get no break either. The Franchise Tax Board (FTB), California's tax agency, says all capital gains are taxed as ordinary income.
And here's the key rule. California residents are taxed on all of their income, no matter where it comes from. So the question isn't "Do I own in Nevada?" It's "Am I still a California resident?"
How Much Can You Save by Becoming a Nevada Resident?
It depends on your income and where it comes from. At California's top rate of 13.3%, each additional $1 million of income costs about $133,000 in state tax. A married couple with $5 million of taxable income would owe California a bit over $600,000 under the 2025 rate schedule. In Nevada, that state bill is zero.
The math is biggest in a one-time event. Think of selling a company, a large stock sale, or a huge bonus year. The FTB says the gain from selling stock is sourced to the state where you are a resident at the time of the sale.
That's why the order matters. People who do this right move first, really move, and sell later. If a big sale is coming, talk to a CPA long before the deal, not after.
For smaller incomes, the savings are real but smaller. Weigh them against what it costs to be here. Incline Village home prices are not low. The tax savings don't make Incline cheap. They make it make sense for a certain kind of buyer.
The Second-Home Trap
Here's the part most buyers don't want to hear. A second home in Incline Village does nothing for your California income taxes.
The FTB uses this exact setup as an example in its residency guide, Publication 1031. A California resident declares that they now live in Nevada. They have a summer home there. They move their bank accounts. But they keep the California house, spend six or seven months a year in it, and keep their club and business ties.
The FTB's answer is blunt. That person is still a California resident, taxed on all of their income.
There's also a time rule, and it only runs one way. Spend more than nine months of a year in California and you are presumed to be a resident. Spending less than that proves nothing by itself. You won't find a "six months and a day" rule anywhere in the FTB's guide.
So if you plan to keep your life in the Bay Area or Los Angeles and use Incline on weekends and in July, buy here because you love it. That's a great reason, and I cover it in my guide to buying a second home in Lake Tahoe. Just don't put income tax savings in the budget.
What Does California Look at to Decide Where You Live?
California looks at where your closest connections are. The FTB compares your ties to California with your ties to Nevada: time spent in each state, where your spouse and kids live, your main home, driver's license, car registration, voter registration, banks, doctors, and clubs. No single factor decides it. The strength of the ties matters more than the count.
Based on the FTB's own list of factors, a real move looks like this:
- The Incline house is your main home, and you spend most of your time in it.
- Your spouse and kids live here too.
- You have a Nevada driver's license, Nevada plates, and a Nevada voter registration.
- Your bank, doctor, dentist, accountant, and attorney are local.
- Your club, your place of worship, and your social life are here.
The FTB says changing your legal home takes three things. You leave the old home behind. You physically move. And you intend to stay, as shown by your actions. That last phrase is the one to remember.
What about the California house? No rule I can point to says you must sell it. But the FTB's own example turns on a taxpayer who kept theirs and kept living in it. Have a plan for that house before you move.
One more thing. The FTB will not give you a written opinion on whether you're a resident. It treats residency as a question of fact. So keep records, and build a real life here. That part is easy. Living in Incline Village year-round is the best part of the deal. If your property comes with beach access, your IVGID passes get you onto the private beaches too.
What Income Does California Still Tax After You Move?
California taxes nonresidents on income from California sources. That includes pay for work you physically do in California, rent from California property, income from a business run there, and the gain when you sell California real estate. Leaving the state does not erase those. What changes is the tax on your other income.
A few details from Publication 1031 matter for Incline buyers:
- Wages follow the work. Pay is sourced to where you do the work, not where your employer is. Days worked from Incline are treated differently than days in a San Francisco office. Track your days.
- California real estate stays California. If you keep the old house as a rental and sell it later, California taxes that gain even though you're a Nevada resident.
- The move year is split. You're a part-year resident. California taxes everything you earned while you still lived there.
Stock options, RSUs, and deferred pay earned during your California years can follow you too. The FTB has a separate guide for people who change residency. This is CPA territory.
Incline Village Property Taxes Work Nothing Like California's
The second piece of the Nevada story gets less attention. I think it's underrated.
In California, Proposition 13 resets your assessed value when a home changes hands, then limits increases to 2% a year. The base rate is 1%. Buy a $4 million home in Truckee and your bill starts around $40,000 a year, before local bonds and assessments.
Nevada doesn't tax the sale price. The Washoe County Assessor values the land at market, then adds what the house would cost to rebuild, minus depreciation. That depreciation is 1.5% for each year of the home's age, up to 50 years, and you're taxed on 35% of the total. The City of Reno notes that Nevada is the only state that depreciates homes this way, and that values do not reset at sale.
Then there's the cap. In Washoe County, the tax bill on your primary residence can't rise more than 3% a year. Other property, which includes a second home, falls under a higher cap of up to 8% a year under the same state law.
Three practical points for buyers:
- The current tax bill means more here. Because values don't reset at sale, the seller's bill is a far better guide than it is in California. You can look up any parcel on the assessor's site.
- The 3% cap is not automatic. After a sale, the county sets the home to the higher cap until the new owner files a claim. Washoe County has urged owners to check their status. File it as soon as you move in.
- New construction is different. Property that is new to the tax roll isn't covered by the cap in its first year.
There are other costs to learn too. Nevada and California handle transfer taxes and escrow differently, and Incline owners pay a yearly recreation fee to IVGID.
Who Should Be Moving to Incline Village for Taxes?
Here's my honest take after working in this market since 2017.
Full movers win. If you're ready to make Incline your real home, the savings are real and the town is a great place to live. You get the beaches in summer, Diamond Peak in winter, and a small-town feel all year.
Second-home buyers should buy for the lake. You'll get a great house and Nevada's property tax system. You won't get out of California income tax. That's fine. Go in with clear eyes.
Paper movers shouldn't. If the plan depends on telling California one thing and living another, I'd tell you to skip it.
Whichever group you're in, the house should fit the plan. A family moving here full-time needs a different home than a couple who comes up eight weekends a year. Still choosing a side of the state line? Start with my Incline Village vs. Truckee comparison.
Many of the best fits never reach the open market. I keep a list of private and off-market homes for buyers who know what they want.
The Bottom Line
Moving to Incline Village from California can cut your state income tax to zero. A purchase alone can't. California follows your closest ties, keeps taxing California-source income, and judges you by what you do, not what you declare. Nevada's property tax system is a plus either way.
Three things to do next:
- Talk to a CPA who handles California residency before you write an offer.
- Decide if this is a full move or a second home, and be honest about it.
- Find the house that fits that answer.
That last part is my job. If you're weighing a move, call me at (530) 412-4495 or start with the Buyer's Guide. I'll show you Lake Tahoe homes for sale, on and off the market, and what the real carrying costs look like. The right plan and the right house can change your next twenty years.
Frequently Asked Questions
Is Incline Village in Nevada or California?
Incline Village is in Nevada. It sits on the northeast shore of Lake Tahoe in Washoe County, a few minutes from the California line at Crystal Bay. That's why Nevada's tax rules apply to residents here. You can see the Nevada-side communities I cover on my Nevada neighborhoods page.
Do I still pay California income tax if I buy a second home in Incline Village?
Yes, if you're still a California resident. California taxes its residents on all income, and owning a home in Nevada doesn't change your residency. The FTB's residency guide includes an example of a taxpayer with a Nevada summer home who is still treated as a California resident.
How many days do I need to spend in Nevada to be a Nevada resident for taxes?
There's no magic number. California presumes you're a resident if you spend more than nine months of the year there. Spending less time than that doesn't prove you left. The FTB looks at your closest connections, and days are only one factor.
Are property taxes lower in Incline Village than in California?
They're calculated differently, so don't assume. Nevada taxes land value plus the depreciated cost to rebuild the home, not your purchase price, and values do not reset when a home sells. California resets the value at each sale. Look up the actual bill for any home you're considering.
Does California tax my stock sale after I move to Nevada?
Generally not, if you're a true Nevada resident when you sell. The FTB says stock gains are sourced to your state of residence at the time of sale. Gains on California real estate are different. California taxes those even after you leave. Ask a CPA about your own facts before you sell.
