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Property Taxes and Arizona Counties: What Lawmakers Need to Know

  • 2 days ago
  • 3 min read

48th

Arizona's National Ranking on Property Tax Burden
Arizona's effective property tax rate for homeowners in among the lowest in the country.

2.0% + New Construction

Maximum Levy Growth

County primary property tax levy limits can grow no more than 2% annually, plus revenue from new construction.


2.5x

Home Values Have Grown 2.5x as Fast as County Taxes

Arizona's property tax limits work — county property tax only grew 44% over 10 years even as home values surged 113%.


Property taxes are the financial foundation of local government in Arizona — funding schools, counties, fire districts, and more. Yet how the system actually works, who administers it, and what limits exist on its growth are details that aren't always well understood. Here's what policymakers need to know about the state-county relationship in Arizona's property tax system.


Counties act as the operational backbone of the property tax system.

County assessors and treasurers perform the day-to-day work that keeps the property tax system functioning and county supervisors are tasked by the state with adopting all jurisdiction tax rates and levies to enable collection.

Counties assess property values, bill and collect taxes, and distribute those revenues to the school districts, community colleges, municipalities, fire districts and other taxing jurisdictions. This work is foundational to ensure that public services across Arizona are funded accurately, efficiently, and on time.


Arizona ranks 48th in the nation for residential property tax burden.

Arizona has some of the lowest property tax burdens in the nation. Even as housing values have grown dramatically, and counties have faced inflationary pressures and workforce costs, property tax revenue growth has remained moderate because Arizona’s system includes significant constitutional and statutory limits. Those protections help keep taxes low for property owners, but they also constrain counties’ ability to keep pace with the rising cost of delivering essential services and funding state mandates.



There are constitutional and statutory limits on property taxes.

In addition to local decisions made by county supervisors and other taxing jurisdictions to keep property tax burdens low, Arizona operates with a number of restrictions on how fast property tax collections and property values can grow – along with limits on the liability property taxpayers have.

  • Constitutional Levy Limits: County primary property tax levies are subject to a constitutional levy limit that generally restricts annual growth to 2%, plus revenue from new construction.

  • 1% Cap: Arizona's Constitution limits the amount of primary property tax a residential property owner can pay to 1% of the property's limited value (LPV). This cap applies to the combined primary property taxes levied by all taxing jurisdictions.

  • 5% Growth Limit: Limits the annual increase in a property’s limited property value (LPV)—the value used to calculate property taxes—to no more than 5% over the previous year.

  • Senior Valuation Freeze: Provides a property valuation freeze for limited-income seniors who are 65 years or over.  

  • Debt Limits: Limits the amount of voter approved general obligation debt issued by a political subdivision to 6% of the jurisdictions NAV.

 

In addition to these constitutional limits, there are transparency requirements, requirements for voter approval, the homeowners’ rebate and various property tax exemptions that limit the amount of property taxes Arizonans and Arizona businesses pay.


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