New residential service installation 200 amp california
The trench is not 18" deep.  The trench is 22" deep.  The cover over top of the conduit is 18" per Code. 

I would bump to Sched 80 conduit for the curves and entrances and exits, because it can stand some physical abuse. 

You must lay the conduit in the ground, all complete, before pulling any wires into it. Assembling the conduit around the wires is illegal. It will be a very formidable pull. 

Before committing to conduit, consider theft.  Any goober could chain your wires to a bumper hitch and drive away, dragging all 500' out of the conduit.  Whereas pulling it from 24" direct burial, the cable would snap. 

Aluminum is the ONLY wire to consider for this. It is an excellent conductor, and in service and feeder wires, it performs just fine.  Honestly if you went to the distributor and asked for this in copper, it'd be fun to see that on hidden camera! Their eyes would light up with dollar signs, and then they'd need to special order it. 

Make triple darn sure it's 490 feet. 500' is a standard wire spool size, and you really, really don't want to buy wire and find out it's 501'.  Count your conduit sticks carefully and measure three times.  On the upside, you get the whole-spool discount, so there's that.  

Voltage drop is serious business. On a very long run like that, you lose a bit of voltage.  You can compensate by making the wires larger.  But we shouldn't do that lightly.  Let's go through it step by step. 

The absolute minimum wire size which is mandatory

You are provisioning 200A service.  Thanks to 310.15(B)(7), we get a favorable "derate" on the wire size - we only need wire good for 83% of the 200A, or 166A.  In conduit, we get to size wires off the 75C column of the chart, so that brings us to 4/0 aluminum wire, at naturally 180 amps.  

The "I was told" person has downsized your neutral. That's really decided by the provisioning of your particular loads, but I believe downsizing neutral to 2/0 is not unreasonable if  you have a lot of 240V loads.  

So the minimum size, if we completely ignore voltage drop, is two 4/0 and one 2/0.  (as usual, the "I was told" person gets the facts wrong.)  Boy, I'm glad  you didn't buy the wire yet.  

Now we need to think about voltage drop.

Look. I'll be the first person to roll my eyes and say "pshaw" when someone rants about big wire upsizing and 3%.  3% is not a rule, it's a wire salesman's dream.  And my rule of thumb is don't worry about it until you're at about 200'.  However, yeah. You need to worry about it.  

So go to any handy-dandy voltage drop calculator, and first, change that 3% to 5% limit.  Or 6% if you're not overly fond of your tenants :)  

Now, consider the current you'll actually be drawing on a regular basis.  For God's sake don't put 200A in there.  You're required to derate your loads to 125%, so the most you could ever plan on putting on a 200A service is 160A.  But realistically, you have to look at the actual nameplate numbers on the large appliances you expect to use simultaneously (e.g. NOT A/C and heater; and if you're running an electric oven, the house heater will be working less).  

So you have to "play". And see what the chart tells you. 

My usual calc is broken, but I tried it on another calc.  If you're running the service to the wall at continuous absolute limit (160 amps) and don't bump the wire and stay with 4/0, then your voltage drop is 5.05%.   If you bump wire one size to "250 kcmil" that cuts it down to 4.27%.  But again, that's at redline, so that better be uncommon.   

Crunch with a somewhat more realistic 100A, and we get 3.16% drop, which nobody would have a problem with (except wire salesmen)... if we do 1 wire size bump to 250 kcmil, then you're at 2.67% drop.

Mind you, pulling 100A@240V, your electric bill will roll by at $3 per hour. 

So I would do either 


4/0, 4/0, 2/0, 4   -- or--
250kcmil, 250kcmil, 3/0, 2


with the last number being an aluminum ground wire.  If  you install receptacles at the meter point, or tap power in any way at the meter point (e.g. to an outbuilding), I would direct-bury the ground wire also, because you'll need it if you do those things.  If you stay in conduit, you could always add it later, though fishing an extra wire into such a very long run can be challenging.  Price it and decide.