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Arizona Property Taxes: A Comprehensive Guide

CEO Khai Intela
Image: Arizona Property Tax Calculator Are you a homeowner in Arizona? If so, you're in luck! Arizona boasts one of the lowest property tax rates in the United States. In fact, the typical Arizona homeowner...

Arizona Property Tax Calculator Image: Arizona Property Tax Calculator

Are you a homeowner in Arizona? If so, you're in luck! Arizona boasts one of the lowest property tax rates in the United States. In fact, the typical Arizona homeowner pays just $1,707 in property taxes annually, saving them an impressive $1,088 compared to the national average.

How Arizona Property Taxes Work: Limited Property Value

You may be wondering how property taxes are determined in Arizona. It all begins with the current cash value of your home. Arizona counties calculate a full cash value for every house in the county, based on the sales prices of similar homes in the area. However, taxes are not based on the full cash value but rather on something called the Limited Property Value (LPV). The LPV is derived from the cash value of the home and is subject to certain limitations. According to a law passed by Arizona voters in 2012, the LPV cannot increase by more than 5% each year. This prevents drastic tax increases when home values skyrocket.

Tax rates are then applied to the assessed values, with the assessment ratio for residential property in Arizona set at 10% of the LPV. This means that assessed values are equal to 10% of the LPV. It's essential to grasp these calculations to gain a deeper understanding of your property tax obligations.

Arizona Property Tax Rates

Property tax rates in Arizona vary depending on factors such as your city, county, school district, and special tax districts. There are two types of tax rates: primary and secondary. Primary tax rates primarily fund governmental entities like municipalities and school districts, while secondary tax rates finance special districts and bond issues for major projects. Typically, primary rates account for the majority of property tax rates in Arizona.

Tax rates are recalculated every year by taxing authorities to meet their funding requirements and adjust to changes in the tax base. For owner-occupied homes, the total primary tax rate for all districts cannot exceed 1% of the property's limited value. If the total rate exceeds this threshold, school district taxes are reduced, and the state steps in to cover the difference.

Even for homeowners whose tax rate falls below the 1% cap, there is a benefit from the state if they live in their house. Owner-occupied residences receive a Homeowner Rebate of 40% of school taxes, up to $600 per year. These incentives, combined with the 1% cap, contribute to Arizona's relatively low property tax rates.

Let's take a closer look at the effective property tax rates in some key counties:

Maricopa County

Maricopa County Image: Maricopa County

As the largest county in Arizona, Maricopa County is home to major cities like Phoenix, Mesa, Chandler, and Glendale. The average effective tax rate in the county is just 0.64%. However, rates may vary by city and school district.

Pima County

Property tax rates in Pima County are the second-highest of any county in Arizona, with an average effective property tax rate of 1.00%. The typical Pima County homeowner pays $1,753 annually in property taxes, which is above the state average.

Pinal County

In Pinal County, the average effective property tax rate is 0.75%. This rate is higher than the state average but still well below the national average. A homeowner with a property valued at $200,000 can expect to pay around $1,520 per year in property taxes.

Yavapai County

Yavapai County Image: Yavapai County

Yavapai County, located north of Phoenix, offers its residents breathtaking natural beauty and low property tax rates. The average effective property tax rate in Yavapai County is just 0.58%, making it one of the most desirable areas in terms of property taxes.

Mohave County

Across the U.S., Mohave County is the fifth-largest county in terms of area. It also boasts some of the lowest property taxes. The median annual tax payment in Mohave County is just $1,210, which is approximately $500 less than the state average. The average effective property tax rate in the county is 0.70%.

Yuma County

Yuma County Image: Yuma County

Located in the picturesque southwestern corner of Arizona, alongside the Mexican and Californian borders, Yuma County has property tax rates that surpass the state average. The average effective property tax rate in Yuma County is 0.84%. With a median home value of $139,200, the average homeowner in Yuma County pays $1,172 annually in property taxes.

Coconino County

Coconino County covers the north-central portion of Arizona and boasts the highest median home value of any county in the state at $299,100. While the average effective tax rate is relatively low, at 0.63%, actual tax payments are among the highest in the state. The typical Coconino County homeowner pays $1,899 annually in property taxes, which is still well below the national average of $2,795.

Cochise County

Cochise County, situated in southeastern Arizona along the borders with New Mexico and Mexico, has tax rates that align closely with the state averages. However, tax rates can vary depending on the city and school district. Cities in Cochise County operate under primary rates, meaning that the combined city and county rates cannot exceed 1% for owner-occupied properties.

Navajo County

Navajo County homeowners can expect to pay lower property taxes compared to the national average. With a median home value of just $135,800, the typical homeowner pays $1,024 annually in property taxes. The average effective tax rate in Navajo County is 0.75%, making it an attractive option for those looking for more affordable property taxes.

Apache County

If you seek an area with low real estate taxes, Apache County is worth considering. The median real estate tax payment is now $1,018, which is more than double the previous rate of $505 but still nearly three times lower than the national average.

Understanding Arizona's property tax system is crucial for homeowners. By familiarizing yourself with the calculations, tax rates, and incentives, you can make informed decisions about homeownership and budgeting.

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