Last updated: September 2013
People who are researching property values and the related real estate taxes in Arizona are often confused by statements they believe to have seen indicating 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? No, thank goodness. Our property taxes are not that high.
Assessed Value vs. Market ValueThe part that many people read over too quickly is that Arizona property taxes on owner-occupied residences are levied based on the Assessed Value, not current market value. In Maricopa County, where Phoenix and Scottsdale are located, the 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.
Computing Arizona's Property TaxIt's difficult to say how much your real estate tax bill will be, because that depends on where you live. Cities, schools, water districts, community colleges, bond issues -- all these determine your specific tax rate. The tax rate applicable to each parcel of property is the sum of the state, county, municipal, school, and special district rates. Let's say that the current tax rate on homes in Maricopa County is 1.5% of full cash value or 15% of assessed value. So, if your home is assessed with a Full Cash Value of $350,000, and your property tax rate was 1-1/2%, then you'd be paying $5,250 per year real estate tax on your home.
Here's the math:
$350,000 [Full Cash Value] x .1 [or 10%] = $35,000 [Assessed Value]
$35,000 [Assessed Value] x .15 (Tax Rate of 15%) = $5,250
$350,000 x .015 [or 1.5%] = $5,250
Keep in mind that the assumption of 15% of full cash 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 withing Maricopa County.
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 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! Read more about property tax appeal scams.
How often are Arizona Property Taxes collected?The Maricopa County 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 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.