Property taxes are a necessary evil that every homeowner has to pay no matter what state they live in.
If you own a home or plan to buy one in Arizona, it’s always a good idea to understand the ins and outs of these taxes so you don’t get slapped with a surprise bill.
Check out this handy guide to learn more about Arizona Property Taxes so you can be a more informed homeowner whenever that notorious tax bill arrives.
Understanding Assessed v Market Value
With a wonderful climate, affordable housing, and plenty to do, Arizona is a popular state for many homeowners. You can sell your home fast in many areas of this state. The tax base is quite low in comparison to other states, but it can be a bit confusing.
If you’re looking at Arizona Property Taxes, there are several factors that come into play. First, the taxes are levied based on the assessed value of the home and not the market value.
A good example is Maricopa County, where the assessment ratio is 10 percent full cash of the market value. For example, if your home’s market value is $150,000, you will be charged property taxes based on the assessed value of $15,000.
Where you live still plays a big role in how much your property taxes will be. Various cities, school systems, water districts, and other factors can determine a specific tax rate for your location.
On average, the tax rate in Arizona before all exemptions and potential rebates is usually between around .87% and 1.5% of the market value. You can find this amount by calculation the percentage in your location based on the home’s assessed value.
Computing your property tax depends on the specific tax rate applicable to your area. This rate applies to every parcel of property that is the sum of the state, county, municipal, school, and special district rates.
Find this current tax rate for your location, and then multiply it by 10 percent of the full cash value of your home. The result will be your assessed value. Then, multiply the assessed value by the local tax rate to see how much you will pay for the year.
It’s important to note that tax rates can change from year to year in Arizona. This is just an example to give you a better idea of how the taxes are assessed and calculated. Each county may collect taxes differently, too.
Assessment for Arizona Property Taxes
Every year, the local Assessor’s office will send you an updated assessment of the value of your home. This amount is what your property tax calculations are based upon.
The amount of assessment can depend on a variety of factors, including:
- Prior sales in the neighborhood: if there have been sales at a higher rate, the assessed value may go up. If sales are low or stagnant, it may stay the same or go down.
- Distance from major roads or areas zoned differently: the assessed value may be higher if you live near a major intersection or road. If you live in a rural place or one that has a unique zone, they could be higher or lower.
- Topography and view: the Assessor will look at the topography of your location to factor it into the amount, as well as the view.
- Livable square footage: a larger home typically assesses higher than one with less square footage.
- Lot size and other factors: the assessed value can also depend on how large your lot size it. It may also depend on a variety of other improvements such as a shed, carport, or garage.
Once you receive your updated annual assessment, go over it carefully. Compare it to last year’s assessment to see how much it has increased or decreased.
If you do not agree with the Assessor’s statement, you have the right to appeal. In some cases, the appeal may get you a lower assessed value so you have to pay fewer taxes for the year.
Paying Property Taxes
In most counties within Arizona, the country treasurer will send you a semi-annual bill. It may be sent by your mortgage company if you have a monthly escrow or impound on your property tax.
It’s important to remember that the Assessor determines the value of your property, but the treasurer is the one sending you the tax bill. Contact the treasurer’s office if you have any questions once the assessed value is determined.
Keep in mind that as you make improvements to your home or property, the assessed value will likely go up. Talk to your county and find out what the current tax rates are to give you a better picture of the total annual cost.
Always read your bill carefully and look for any potential errors so you can have them corrected as soon as possible. Remember that property taxes are a part of owning a home and you’ll need to pay them wherever you live.
You can visit the Arizona Department of Revenue website for a much more in-depth explanation of how properties are assessed. You’ll also find more about the current tax rates in each locality.
Navigating Property Taxes
Paying taxes is never fun, but it’s just part of life. Now that you have a better idea of how the Arizona Property Taxes system works, you’ll be more prepared when you get that annual bill.
Be sure to contact your local assessor’s office or county treasurer whenever you have any questions about your property taxes. They can give you more clarification on costs and how the process works.
For more information on selling your home and to get a cash offer, check out our website.