Arizona Property Tax

How Much Will You Pay in Real Estate Tax on Your Arizona Home?

Sun City. Phoenix. Maricopa County. Arizona
••• Matt Mawson / Getty Images

The amount of property tax applicable to each parcel of property is the sum of the state, county, municipal, school, and special district rates.

Assessed Value vs. Market Value
I received an email with the following question:

I have seen various sources stating that property taxes in Arizona are 10%.  Does that mean that on a $350,000 house, you would owe $35,000 a year in taxes?  That doesn't make sense.

Well, you are correct. It doesn't make sense, but you aren't the only one who is confused about this issue.

The part that many people read over too quickly is that Arizona property taxes on owner-occupied residences are levied based on the Limited Property Value (LPV) or Assessed Value. You do not pay your real estate taxes based on the Full Cash Value (FCV) or current market value. In Maricopa County, where Phoenix and Scottsdale are located, the assessment ratio for owner-occupied residential property is 10 percent.

The LPV is usually less than the FCV, and it can never be higher. So, if your home's LPV is valued at $200,000 you will be charged property tax based on the Assessed Value of $20,000.

Computing Arizona's Property Tax

How much will your property tax be? It's difficult to say, because that depends on where you live. Cities, schools, water districts, community colleges, bond issues -- all these determine your specific tax rate.

The average tax rate on homes in Arizona before exemptions and rebates is between $12 and $13 per $100 of Assessed Value (2016). It follows, then, that if your home's LPV is established at $200,000, with an Assessed Value of $20,000, and your property taxes were exactly $13 per $100 of Assessed Value, then you'd be paying $2,600 per year in property tax.

Here's the math:

$200,000 [Limited Property Value] x .1 [or 10%] = $20,000 [Assessed Value]

then,

$20,000 [Assessed Value] x .13 [Tax Rate of 13% or $13 per $100] = $2,600

- or -

$200,000 x .013 [or 1.3%] = $2,600

Keep in mind that the assumption of 13% of Assessed Value was for example purposes only. The actual tax rate in any particular year may be higher or may be lower. It may also vary from city to city within Maricopa County and may be different in other Arizona counties.

What is the Assessed Value of a home?

You can find the assessed value for a home in Maricopa County at the Maricopa County Assessor website.

I have never found the Full Cash Value of my home (which is the number that the Assessor uses to determine the Assessed Value) to be the same as the market price. My Full Cash Values have always been lower than market. Some of this may be due to timing of the real estate market on which the values are based, some of this may be due to rounding by the Assessor's office (and they always round in your favor). If you use the current market price as an estimate, your Arizona property tax will likely be lower when you actually get your bill.

Why is my home assessed at a different value than my neighbor's home?

Each year, the Assessor will send an updated assessment on the value of the home, upon which your property tax computation is based.

The Assessor's Office utilizes a combination of information, including previous sales in the neighborhood, distance from major intersections or areas zoned differently, topography, view, livable square footage, lot size and components, and more. The valuation is determined by a computer analysis of the information gathered. If you disagree with the information you receive from the Assessor, you may appeal. Beware of scams asking you to pay a fee to reduce your property taxes or lodge an appeal!

How often are Arizona Property Taxes collected?

The Maricopa County Treasurer sends a semi-annual bill to the owner of the home, or to a party designated by the owner (like a mortgage company, if you have a monthly impound for your Arizona Real Estate tax). Remember, the Assessor determines the value of the property, and the County Treasurer, for the County in which you live, is the entity that actually bills you for your Arizona Property taxes.

All tax information and rates presented here are subject to change without notice. I am not an attorney, nor am I a tax professional. Please consult your tax advisor with questions about your property taxes.