Property Taxes in Arizona

Arizona has long been a retirement-friendly state, which means low property taxes and lots of exemptions. Arizona ranks 43rd in the country for property taxes, with an average tax bill of $1,717. The national median property tax bill is $2,971.

Property taxes fuel local government, including funding schools, roadwork, and things like services for senior citizens. Arizona residents in owner-occupied homes pay an effective property tax rate of 0.63%. The average homeowner in Arizona pays 4.34% of their income in taxes, putting the state on a list of most affordable for middle-income people.

Despite what are considered low tax bills by those in the rest of the country, Phoenix area residents are getting $326 million in refunds for overtaxing from 2015 to 2021. So, it pays to be vigilant about property tax bills. If you own a home in Arizona, the state allows you to appeal your property taxes if you believe that your bill is too high. The process to appeal is easy and quicky and well worth it to save money.

The state constitution requires that property taxes be uniform across properties of the same type, yet people in different counties pay different rates due to property valuation. Section 6 of the constitution also allows local taxation districts to raise funds for special projects, such as building a new school through special taxes. The state constitution was written in 1912 when Arizona joined the U.S. At the time, it was sparsely populated, and jobs were in livestock, citrus crops, and mining. Since then, Arizona has grown rapidly, and many work in tourism, technology, and pharma, to name a few.

The Arizona Department of Revenue is principally in charge of tax collection. It uses information from assessors in every county to determine the value of properties using a comparative formula. The Department of Revenue provides revenue projections to state government decision-makers, manages income, sales, and property tax receipts, and delivers funds to those the state pays for services.

Local assessors categorize every property within their counties as follows:

• Commercial
• Agricultural/nonprofit
• Primary Residential
• Non-primary residential
• Residential rental

Properties are valued according to either their full cash value (which pertains only to business personal property) or limited property value (which pertains to residential homes). Limited property value can only increase by 5% per year and can never exceed full cash value. Full cash value property fluctuates with the market.

Residents are notified of their property valuation for the tax year and are given information about appealing the assessment. Property tax bills are issued in October and March.

Property tax is determined by multiplying the assessed value by the tax rate set by the county. Any exemptions are applied after the tax is calculated. Marana, Arizona, a city of 52,000 northwest of Tucson, was ranked as the highest taxing location in the state. Here, residential property was taxed at $1,090 per $100,000 valuation a few years ago, and the city tacked 2% onto state sales tax.

Each county uses different metrics when setting property tax rates. For example, Maricopa County adds 1.2% to the primary rate for county operations and may add .05% for the library district. More may be added for fire districts and other special classifications like water irrigation districts. School districts within Maricopa County receive over 50% of property tax revenue. Average property tax bills vary according to location but fall within the $1,500-$1,700 range.

Your home's assessed value is equal to 10% of its market value. A market value of $120,000 results in an assessed value of $12,000. The county's property tax rate will apply to the assessed value. Property tax rates vary with each county. The tax rates in the five most populous Arizona counties are:

Maricopa County property tax rates are impressively low, especially when you consider that it's the most populated county.

Funds received from property taxes are the backbone of state government. They make all local and state functions possible, including:

Records of property taxes help local tax officers reconcile account information against receivables. They allow communities to forecast growth and budget for future spending. Tax records tell a story about the evolution of a property and a community, perhaps from a farmhouse to a multi-family dwelling and eventually to commercial space as the area grows.

A property tax document contains important information, including:

Some of these online databases allow homeowners to pay their property taxes when viewing the records of their properties.

There are individual and organizational exemptions to property taxes in Arizona. Nonprofits like libraries are exempt from most property taxes, as are schools and religious institutions. Individual exemptions, whether full or partial, are for the following:

• Disabled veterans or their surviving spouses
• Those who are totally disabled
• Partial exemptions for individuals with disabled children and/or exceptionally low-income
• A partial exemption from school-based property tax for eligible seniors
• Residents with low income may gain access to a deferral program that applies to one year of property taxes
• A "Senior Freeze" exemption, which allows elderly homeowners to freeze their property valuations for three years

Exemption for Disabled Individuals or Veterans: Arizona provides certain homeowners with an assessed value exemption that amounts to $4,476. This exemption can be claimed by property owners who qualify as a person with a permanent disability, a veteran with a non-service or service disability, or a widower.

Homeowners with a disability must submit a Certificate of Disability, which can be obtained from the county assessor's office. It's titled Form 82514B. Keep in mind that the total value of your property can't be higher than $30,099 if you wish to qualify. Your household income must also be lower than $37,298.

Senior Valuation Freeze: The Senior Valuation Protection Option is a type of property tax exemption that freezes the valuation of a home for owners who are at least 65 years old. This freeze lasts for three years. However, the homeowner can choose to renew the freeze once the third year ends.

To qualify, the owner must reside in the property for two years. The income limit to qualify is $45,264 for one owner or $56,580 for two or more owners. You'll need to submit your application alongside documentation of your age and income by September 1.

To search property tax records in Arizona, use this list to find the county assessor's office where the property is located. Then, put the address or owner's name in the search function on the local assessor's website. You should immediately receive a list of any properties that match the information you've entered into the database.

Other information providers, such as PropertyChecker will also search public records for the documents using the owner's name or property location. PropertyChecker allows you to search for tax records with search criteria like address, owner's phone number, owner's name, or parcel ID. You should receive the tax record you're looking for in less than a minute. A single search can give you access to property data like:

In these days of digital record keeping, there are fewer record-keeping mistakes in tax documents, but they still happen sometimes. Property owners should compare one year's property tax records to the next to make sure that their classification or acreage wasn't changed.

New bond issues for school districts or improvements like municipal sewerage systems may inadvertently loop in neighborhoods that are adjacent but not directly involved in the project. Property owners should be vigilant about increased taxes and the calculations supporting them.

If your taxes change significantly from one year to the next, ask for a consultation with the assessor's office to get an explanation. It may be the basis for a formal appeal to the Board of Equalization, which oversees assessors. This document from the State Department of Revenue provides information on what to look for as well as deadlines for appeals. Follow these steps:

Step 1: Collect your documentation, which may include a copy of your property deed. Match the deed information with the tax bill, checking accuracy. If the bill is higher than you believe it should be, consider appealing.

Step 2: Ask the county tax/revenue office to explain what is impacting your property tax bill.

Step 3: If the issue is your property valuation, collect information about sales within your county that are comparable to your property and make an appointment with your county assessor to discuss your case. This process is considered an informal review and doesn't take too long.

Step 4: Ask city hall to see any plans for infrastructure improvements that are impacting your bill, making sure that your property is or is not within the scope of the project.

Step 5: If you can't resolve the issue with a visit to county/city offices, file an official appeal to the Board of Equalization within the deadline for the tax year (within 60 days).

Step 6: The state has a special Tax Court to deal with disputes over taxes. During this process, you'll need to provide proof that your property valuation is too high. If you win your appeal, your home's assessed value should be lowered, which means that you'll pay less in taxes.

If you're considering making an offer on a home in Arizona, property taxes in most places are low enough to be only a tiny portion of the decision, as rates don't vary greatly between counties in Arizona. However, it is important to make well-informed decisions, so looking at the long-term history of a property's taxes can be helpful.

Perhaps the site is being engulfed by a growing city, such as an exurb of Mesa or Phoenix, where property values rose by nearly 40% in a few years. Areas like that experience dramatic growth, requiring big investments in infrastructure that are often paid for by bond bills that show up on rising property taxes.

When an individual wishes to buy a home in Arizona, they'll need to calculate how much taxes they'll pay every year. Most homeowners in Arizona add property taxes to their mortgage payments. A county with elevated property taxes may be unappealing to buyers and investors who want to avoid making high monthly payments. An investor won't earn as much income on a property if a large portion of the money they make each month is used to pay taxes.

Unpaid property taxes usually result in a lien on any future sale. That means the taxes come out of any profit before the owner receives funds from the sale. If taxes go unpaid for a long time, the state may sell the lien to an investor, who then sets conditions for the property owner to make payments or lose title to the property. Use this link to county assessors to find lien sale information.