Consider Taxes When Purchasing a Home
There are many factors to consider when buying a house: location, size and price are a few, but there is one factor that is sometimes overlooked that is also important–property taxes. In Arizona, property taxes on owner-occupied residences are 10 percent, which would seem extremely high, but they are levied against the assessed value, not the market value. The assessed value of a home in Maricopa County is 10 percent of the full cash (market) value. Therefore, if your house is assessed with a full cash value of $375,000, your assessed value is $37,500.
Many times the full cash value of your house will be lower than the actual market value, which is the price at which your house would sell under normal market conditions. This is because often the assessor’s office rounds down in your favor. It could also vary based on what time of the year it was assessed. Most properties in the area are appreciating and if your house was assessed in January it will be taxed based on the value at the time assessed. The house could currently be worth more.
The taxes that are placed on your property vary depending on where you live because there are many factors that influence that rate including cities, schools, community colleges. The actual tax rate that a property will be charged is the sum of state, county, municipal, school, and special district rates. In Arizona that average tax rate is 13 percent of the assessed value. If we take the example of the house above, a house with a full cash value of $375,000 would be assessed at $37,500 and the property taxes would be $4,875.
The Assessor’s office takes many things into consideration when determining a property’s full cash value. These things include previous sales in the neighborhood, distance from major intersections or areas zoned differently, topography, view, livable square footage, lot size and components and more. All these factors go into the final computer analysis that will give you the full cash value. The county assessor’s office then sends notices to homeowners that state both the full cash value and assessed values of the properties.
In the changing market we’ve been experiencing, it is important to look at these notices and make sure that the full cash value is correct as this can make a big difference in how much taxes you will pay that year. If you feel they have made an error, there is an appeal process that could help save you some money.
The Maricopa County Treasurer sends a semi-annual bill to homeowners. A taxpayer has 60 days from the postmark of the bill to petition the county assessor’s office for a review of the full cash value amount. The assessor’s office has no later than August 15th to rule on this petition. If they deny the appeal, the taxpayer has one final place they can go. Within 25 days of the rejection of the appeal, the homeowner can file another appeal with the State Board of Equalization. The state board must rule on all appeals by October 15th.
You can obtain all the information for a tax court appeal package by sending a self-addressed envelope with two stamps to: AZ Tax Court, 125 W Washington, Phoenix, AZ 85003. You can also find online information at:
Another way to help keep costs down is addressed to only those Arizona residents who are older 65 and older. These people may apply to the assessors office for a property valuation protection order. This order can only be applied for a person’s own residence than is not more than 10 acres. This protection gives a fixed, full cash value for the property ensuring that the taxes will remain the same even as the property increases in value. This is particularly important and beneficial to those living on a fixed income because it will help ensure that your taxes do not increase beyond your means. In order to be eligible for this, a person must apply to the county assessor’s office by September 1 and they will evaluate the income of those who are the actual owners of the property in question to determine eligibility. You can find more information and the form to fill out at:
This seemed like a pertinent issues, because recently I was approached by a client who owns several properties in Laveen and the values assessed by the county were extremely higher than market value. If you think your assessed value looks high, call a Realtor to receive comparable sales information to determine whether or not your assessed value is in line.