I received an email with the following question:

I have seen various sources (inclduing an article on your website) 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 people forget is that property taxes are levied based on the assessed value, not property or market value. In Maricopa County, where Phoenix is, assessment ratio for owner-occupied residential property is 10 percent of full cash (market) value. So if your home is valued at $350,000, you will be charged property tax based on the assessed value of $35,000. So 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 approximately 1.3% of market value, or 13% of assessed value. So, to answer your question, if your home is assessed at $350,000, and your property taxes were exactly at the average 1.3%, then you'd be paying $4,550 per year in property tax.

Note: I have never found the assessed value of my home to be the same as the market price. My assessed values have always been lower than market, which means that if you use market price as an estimate, your tax will probably be lower than you thought when you actually get your bill.

Now, don't you feel better?

More Arizona Tax Details
Arizona Taxes
Sales Tax Rates

You can find even more detail about assessed values, computations, and property tax issues here.