Overview of Arizona Real Property Tax
The fundamental elements of Arizona's existing system, including PRIMARY and SECONDARY taxation, LIMITED VALUES, PRIMARY LEVY LIMITS and the 1% Primary tax limitation for homeowners, were established by the 1980 Tax Reform Act. This act was adopted by voters as an alternative to Proposition 106, which was similar to Proposition 13 in California.
It is the role of the County Assessor to identify, value and assess. The County Assessor is mandated by statute to value real property to determine what it is worth on the market using standard appraisal methods and techniques (Sales Comparison Method, Replacement Cost less Depreciation Method, Income Method).
FULL CASH VALUE The Assessor, using the standard valuation methods, determines what is called the full cash value of the property. This value is used when determining how much taxes are due on Secondary Property taxes, such as those for special districts, fire districts, school districts, bond issues, and bond overrides. There is no limit on the growth rate of this value and it fluctuates from year to year with the market.
LIMITED CASH VALUE Limited Cash Value is used for counties, cities, towns, and community college districts. The limited value of property is determined by taking the limited property value of the property in the preceding valuation year plus the greater of either: 10% of that value or 25% of the difference between the full cash value of the parcel in the current valuation year and the limited value of the parcel in the preceding valuation year. Under no circumstances may the limited value of the property ever exceed its current full cash value.
The property's ASSESSED VALUATION can be determined by using a statutory formula, or commonly referred to as Assessment Ratio (10% for Owner-Occupied Residential Property).
Under the Arizona Constitution there are a Homeowner tax limit and Homeowners rebate, which limits amounts of primary taxes from all taxing jurisdictions on owner-occupied homes to 1% of the property full cash value. Usually, the total primary taxes for homeowners stays below this level, in part because the state pays 35% of the school district primary rate that is imposed on the homeowner. If the taxes should exceed 1 % of the property's full cash value because of school district taxes, a credit is given to the homeowner for the excess.
Appeal Process
Step 1
File a petition with the County Assessor. The filing deadline is printed on the Notice of Value card. You must file your appeal within 60 days after the card was mailed to you. A.R.S.§ 42-16051 D.
Step 2
You may request a meeting with the County Assessor's office - or submit written evidence that supports your appeal. The assessor must consider, decide, and answer all requests on or before August 15. A.R.S.§§ 42-16054, 16055.
If you reach an agreement, no further appeal is permitted. A.R.S.§ 42-16056.
Step 3
If you do not agree with the assessor's decision, you may file a petition with the Board of Equalization for that county. The petition must be filed within 25 days of the date the assessor's decision was mailed to you. However, you may decide to bypass the Board and appeal directly to the Tax Court within 60 days. A.R.S.§§ 42-16056, 16105, 16157, 16201.
Step 4
If you are not satisfied with the Board of Equalization's decision, you may appeal to the Tax Court. Be sure to file your appeal no later than 60 days after the Board of Equalization decision is mailed to you. A.R.S.§§ 42-16111, 16168, 16201.
