Arizona Taxes

… especially real estate taxes, are lower than in most other states … and going even lower starting in 2015.

There’s no “personal property” tax. The only ongoing tax for cars, boats and such are those inherent in registration/licensing, if such is required for the item.

Arizona Real Property Taxes

Prior to 2015, property tax was based on the “Full Cash Value” (FCV) of the property, which was determined by the County Assessor based on actual sales data for comparable properties, with adjustments for differences in amenities, etc., much as would be made by an appraiser.

Generally, the FCV was about 80% of what a Realtor® would determine to be the likely sales price. Given this market relationship and other fixed tax rate factors, there has been a historic “rule of thumb” that the property tax would be about 1% of the current market value.

Voters passed a resolution in 2012 that went into effect for 2015 limiting the annual increase in the value used to calculate the property tax to 5% per year, and specified that value could not be greater than the FCV.

In 2015 and since, the increase in real estate market values have generally been more than 5% … a lot more in 2018 and since.

But that 5% limit to the annual property tax increase still applies. The “rule of thumb” is now more like 0.6% … and falling.

This article might also be of interest regarding property taxes … Same Property – Same Tax

Arizona Personal Property Taxes

… on cars, boats, etc, are in registration/license fees only. If there is no license then there is no personal property tax.

Annual registration costs are based on the “Assessed Value”. At purchase the rate is 2.8% of 60% of the MSRP. This declines 16.25% per year. For example, for a new car with a MSRP of $25,000, the initial registration fee would be $420 (25,000x.6x.028), declining $68.25 to $351.75 for the registration in the second year.

Arizona Personal Income Tax

… is “progressive” and based on the same “Adjusted Gross Income” as federal taxes, except for possible adjustments.

For individuals on the tax returns filed April 2018, the tax rate went from 2.59% for the first $10,000, up to $5,771 plus 4.54% for the income above $150,000. For joint returns, tax rates are same but the progression steps are double (tax less).

Arizona Sales Tax

… is 6.6% … Maricopa County adds another 0.7% … most cities tack on a bit more, plus there usually are adds for transportation system growth.

The result is a sales tax that varies between about 8.5% and 11.5%, depending on where you buy.

Non-taxed Items

There is no sales tax on prescription medicines, or real estate (by a constitutional amendment in 2008). In most local communities, there is no sales tax on food. In Phoenix, this tax comes and goes.

 

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Other Arizona Homeowner Issues

* Agency - What is it?
* Buyer's Agent - Guardian Angel
* Listing Agent's Job
* Broker - Agent Difference?
* AZ RE Transaction Issues
* Buyer Advisory - Priceless - FREE
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* SPDS - Seller Disclosure
* BINSR - Buyer Inspection Notice
* Arizona Dept of Real Estate

* Contents

Arizona – the most “western” State – Take a Look!

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