How Do Arizona Property Taxes Work?

Arizona property taxes for a primary residence (also known as a Class 3 property) are determined based on two different valuations: Full Cash Value (FCV) and Limited Property Value (LPV).

FCV is similar to market value; it reflects what the property could reasonably sell for in the current market.
LPV is the number used to calculate your property tax. It is capped to increase by no more than 5% each year, and it can never exceed the FCV.

After a property’s LPV is set by the county assessor, it’s multiplied by the assessment ratio for residential properties, which is 10%. That number becomes the assessed value. Your assessed value is then multiplied by the total tax rate in your area (based on school districts, city services, fire districts, etc.) to determine your annual tax bill.

Based on HomeLight’s research of data from all 15 Arizona counties, the state average effective property tax rate is approximately 0.61%, lower than the national average of 0.90%. A typical homeowner pays around $1,800 annually.

If the combined primary tax rate exceeds the 1% LPV limit, the school district primary taxes are reduced accordingly. To compensate the school district, the state provides additional aid to cover the difference between the overall primary tax rate and the 1% rate cap.

Note: HomeLight’s Arizona property tax calculator provides a ballpark estimate for owner-occupied, primary homes based on average rates, your home’s value, and the standard 10% assessment ratio. Because rates vary by county and district, your tax bill may be higher or lower. For a precise number, contact your county assessor.

Are There Property Tax Exemptions in Arizona?

Arizona does not offer a traditional homestead exemption like some other states, but there are several property tax relief programs for eligible homeowners. These include:

State Aid to Education Credit: This credit reduces school district taxes on owner-occupied primary residences. If your home is your primary residence and you file the appropriate paperwork with your county assessor, this credit is applied automatically. It’s the most common form of tax relief for Arizona homeowners.
Senior Valuation Freeze (Property Valuation Protection Option): Homeowners age 65 or older with limited income may qualify for a freeze on the taxable portion of a home’s property value, preventing it from increasing year over year, even if market values rise. Eligibility is based on income and length of residence.
Widow/Widower or Disability Exemption: A limited exemption is available for qualifying widows, widowers, and individuals with disabilities. The exemption amount is relatively modest and varies by county, but it can reduce the property’s assessed value.

To apply for any of these programs, you’ll typically need to file an application with your county assessor’s office. Deadlines and income limits vary by program and county, so it’s best to contact your local office for current guidelines.

If you’re buying a home, note that tax exemptions and valuation freezes do not automatically transfer from the previous owner. You’ll need to reapply based on your own eligibility after the home changes hands.

How Is Assessed Value Different From Market Value?

Market value refers to what a buyer would likely pay for your home today. It’s influenced by location, condition, and comparable sales in the area — and it’s what you’ll negotiate when buying or selling a home.

Assessed value is used solely for tax purposes and is calculated in Arizona using the two steps mentioned above — LPV multiplied by 10% (the residential assessment ratio).

For example:

Market value (or Full Cash Value): $400,000
LPV (capped): $350,000
Assessed value = $35,000 (10% of LPV)
Tax bill = Assessed value × local rate

This system helps protect Arizona homeowners from sharp increases in property taxes year-over-year, even in a rising housing market.

When Are Arizona Property Taxes Due?

Property taxes are typically due October 1. However, Arizona law allows property taxes to be paid in two installments on most residential homes.

First half of taxes: Due October 1, delinquent after November 1
Second half of taxes: Due March 1 of the following year, delinquent after May 1

If any of the delinquency dates fall on a Saturday, Sunday, or a legal holiday, the due date is extended to 5 p.m. the next business day.

If your mortgage includes an escrow account, your lender will typically handle tax payments on your behalf. Otherwise, payments must be made directly to your county treasurer’s office.

What Do Property Taxes Pay For in Arizona?

Arizona property taxes help fund a variety of essential public services at the local level. These include:

K–12 public education (including school district bonds and overrides)
Police and fire protection
Street and road maintenance
County and municipal operations
Library systems and community colleges
Flood control and special districts

Each local taxing authority — like your county, city, school district, or fire district — sets its own tax rate or levy, which collectively determines your total property tax bill.

What Does It Cost to Buy a Home in Arizona?

How Much House Can You Afford?

Affordability depends on income, debt, credit, and the interest rate environment. Based on a median household income in Arizona of roughly $75,000, many buyers can qualify for a home in the $225,000–$275,000 range using standard affordability guidelines. Dual-income households are often necessary to purchase a median-priced $450,000 home in the Grand Canyon State.

Use HomeLight’s Home Affordability Calculator to estimate what you can comfortably afford based on your financial picture and today’s rates.

What Down Payment Will You Need?

Down payments in Arizona can range from 3% (for FHA or first-time buyer loans) to 20% (for conventional loans without mortgage insurance). In today’s market, many Arizona buyers put down 10%–15%, with the current average being 9.31%.

For a $450,000 home, that means:

3% down = $13,500
10% down = $45,000
15% down = $67,500
20% down = $90,000

Try HomeLight’s Down Payment Calculator to explore how different down payment amounts impact your loan and monthly costs.

How Much Are Closing Costs in Arizona?

Buyers in Arizona typically pay 2%–5% of the home’s purchase price in closing costs, which may include:

Lender fees
Title insurance
Appraisal costs
Prepaid taxes and insurance
Escrow and recording fees

For a $450,000 home, that means estimated closing costs of $9,000–$22,500. Use HomeLight’s Closing Costs Calculator for a custom estimate based on your purchase price.

How To Find a Trusted Arizona Real Estate Agent

Buying a home in Arizona is a big decision, and having a top agent by your side makes it easier and can help you save money in the long run. A local expert can help you understand tax districts, uncover value in high-growth areas, and negotiate strategically.

HomeLight’s free Agent Match tool analyzes over 27 million transactions and thousands of reviews to connect you with the best agents in your selected buying area based on real performance, not paid placements.

Tell us about your goals and get matched with Arizona agents who know the neighborhoods you’re considering and can guide you from search to close.

Additional resources when searching for a trusted buyer’s agent in Arizona:

Buying and Selling? Consider “Buy Before You Sell”

If you’re buying a new home in Arizona but need to sell your current one first, HomeLight’s Buy Before You Sell program can simplify the process. This modern solution helps you unlock equity from your current home so you can buy your next one without a contingent offer — and only move once.

Watch the short video below to see how it works and whether it’s a fit for your situation.