Arizona Property Taxes

Are you thinking about investing in Arizona Real Estate but confused by property taxes, rates and how they are paid? Join the club!

Let me start by putting your mind at ease and answer the most important question: Real Estate Taxes in Arizona are cheap compared to most places. If you are hypersensitive to this topic you probably pay more where you are now.

A simple rule of thumb formula to estimate taxes for a residential property in Arizona is Value x .0085 =annual tax. As example a $200,000 home  would be $200,000 x .0085 = $1,700.00 per year.

Arizona’s is an “ad valorem”  tax. Ad Valorem is Latin for according to value. The Assessor will estimate the value of each property once per year using a number of  factors.  Tax is assessed and paid to the County Assessor in the County in which the property is located but will include taxes for state, county, municipal, school and special district rates. Rates vary from one county and municipality to another to some degree but the rule of thumb will work for estimating.

Do investors pay higher property taxes in Arizona? Investors are required to report a property’s occupancy status to the county but do not have to pay a higher property tax rate than owner occupants.

Most of the larger municipalities do require a rent tax be paid on rental real estate. Most landlords charge the tenant for rent tax. Rent tax rates vary by city but most are under 2% of the rent. As example Tempe is 1.8%, so if rent was $1,000.00 the rent tax would be $18 for that month. Rent tax is not property tax but it is important to know about.

Real estate property tax is paid in arrears in Arizona, meaning after the fact. Taxes are due in two payments. The first half year’s taxes are due October 1st and delinquent Nov 1st; the second half tax is due March 1st and delinquent May 1st of the following year.

If you are financing your purchase your lender may require impounds for the payment of taxes. If they do you will not pay your property tax directly. Rather, 1/12 of the annual estimated tax will be included with your monthly mortgage payment. When a tax payment is due the lender will pay it on your behalf. Lenders do this because they are able to monitor tax payments to be sure tax liens don’t take priority over their loans.

Arizona’s Property Tax Rates rank 32nd out of 50 states.

Best in the West!

Need to know the exact taxes on an Arizona Property? Answers and Info here

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