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Arizona law was changed back in 1995 to define "valuation year" as the year prior to the "tax year". This law requires the assessment roll to be created in the year prior to the actual tax levy and collection. Due to this requirement, the assessor is required to set valuations for 2023 as of January 1, 2022, using 18 months of sales data. This dictates setting 2023 values using sales data from 2020 and 2021.
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To notify you of any change in the full cash value, limited value, or legal classification from last year.
The 2023 valuation will be the basis for the property tax assessment and property tax bill to be sent out in September 2023, in about 18 months. The full cash value is an estimate of the property's market value, and the legal classification shows how the property is used, residential, vacant land, agricultural, commercial, etc.
Yes. Every property owner in the State of Arizona is required by law to be notified of their valuation annually. Notices are mailed to the current owner at the last known address on file at the Assessor's Office.
Full cash value is the estimated market value the Assessor is required to establish for property tax assessment. It includes an estimated value for the land and any structure on the land. Beginning Tax Year 2015, no tax levy is assessed against the full cash value (Proposition 117).
The limited property value is a value calculated through a statutory calculation that is based on the previous year's limited property value and the new full cash value. This value is not subject to discretionary adjustment by the assessor. Beginning Tax Year 2015 the limited property value is restricted to a 5% increase, and all property taxes will be levied against the limited property value (Proposition 117).
The legal classification of property defines the assessment ratio based on the property's use as defined by Arizona law. For example, a residence that is owner-occupied is "legal class 3". Legal class 3 property is assessed at 10% of its full cash value. If a property is used for commercial purposes, it would be identified as "legal class 1.12" and is assessed at 18% of its full cash value. Vacant land is "legal class 2" and is assessed at 15% of its full cash value.
A new law changed in 2012 restricts legal class 3 owner-occupied residential classification to an owner's primary residence. (A home may qualify as class 3 if it is a primary residence of a qualified family member.) Second homes, vacation homes, etc. which were classified as legal class 3 in the past now must be classified as legal class 4. Both class 3 and class 4 properties have a 10% assessment rate. A legal class 3 property, however, receives a state aid to education reduction on the tax bill computation which is not received by a legal class 4 property. To change your property to a legal class 3 primary residence status, file an Application for Reclassification of Property - To Owner Occupied with the Assessor.
The full cash value can increase for several reasons. New construction or remodeling of existing structures that were not previously shown on the assessment records will increase values. A change in property use, such as going from agricultural to non-agricultural use can cause an increase. Under normal market conditions, an increase in the overall real estate market and selling prices of similar property in the area is the major cause for valuation increases. Current real estate market conditions are reflecting stable or declining values in many areas of the county. Often a physical inspection by assessor staff will result in prior improvements being added to the assessment roll for the first time, resulting in an increase.
Yes. When there exists a large value spread between the full cash value and the limited property value, the limited property value will increase even though the current year's full cash value dropped. In no case can the limited property value exceed the full cash value in any given year. Beginning Tax Year 2015, the limited property value is limited to a 5% increase, provided no change in use or new construction has occurred since last year's assessment (Proposition 117).
The full cash value can increase in a declining market as long as it does not exceed the market value as of the valuation date. Note: The 2023 full cash value is based on a valuation date of January 1, 2022, and is based on a minimum of 18 months of sales data. In the case of the 2023 valuation, sales data from years 2020 and 2021 were the basis for the valuation. Real estate market changes or conditions existing after January 1, 2022, are not relevant to the 2023 assessment.
No. The constitutional responsibility of assessing and valuing property falls to the County Assessor. The Assessor is not a taxing authority and cannot levy taxes. The Assessor reports the net assessed valuation to each of the 75 plus taxing jurisdictions within the county. The individual taxing jurisdictions then, based on their individual budgetary decisions, will set tax rates which will then be used to calculate the property tax bill.
No. The county is broken up into 9 separate market areas. Each of these 9 market areas are then broken up into smaller sub-market areas and sales data from within these sub-market areas are then the basis for setting valuation levels. Areas transitioning in use, new construction, or other external factors affecting market values can impact the valuation set by the assessor in each area.
The full cash value is comprised of a value for the land and for the structure (improvement). The land value is set based on the selling prices for similar types and sizes of land and is updated periodically. The improvement value is re-calculated every year and is adjusted for depreciation, physical condition, modernization, etc. A market factor is applied based on a statistical sales ratio analysis for that type of property in that specific submarket area of the county. Standard appraisal methods are used by State certified appraisers within the Assessor's Office to achieve this goal.
This occurs generally due to the market factor adjustment which tracks the change in the real estate market through sales analysis. It may also occur when a systematic land reappraisal occurs on the 3 to 5-year cycle. A value can also increase when a new owner purchases a property for which the prior owner had qualified for a Senior Property Valuation Freeze.
Every property owner has the legal ability to file an appeal with the County Assessor if the property owner believes the assessment is incorrect. Arizona law requires the assessor to value property at market value levels, but the assessor cannot value property over the actual market value of the property. There is no restriction or limit as to an increase in the full cash value, so in the case of an appeal, the property owner is required to demonstrate documentation as to the incorrectness of the assessment or valuation. An appeal must be filed with the assessor within 60 days of the mailing of the Notice of Valuation. Forms are available from the assessor. Beginning Tax Year 2015, no tax levy is assessed against the full cash value (Proposition 117).
The taxing jurisdictions will not set the 2022 tax rates until August of 2022. Beginning Tax Year 2015, your tax bill is calculated solely on the limited property value (Proposition 117).
If you believe your property is incorrectly assessed or is in fact valued in excess of market value, contact the Assessor's Office and get more information on filing an appeal. This will not impact the 2022 tax bill but would address the problem for the 2023 tax bill.
Note: Individual Property Tax Exemption: an exemption is available to property owners qualifying as a widow, widower, or an individual who is 100% totally and permanently disabled. There is an income and property valuation limitation. The filing deadline is March 1 of each year.
Note: Senior Property Valuation Freeze Option: a property owner 65 years of age or older may qualify to have their property value frozen for a three-year period which can be renewed every three years, resulting in a permanent freeze. The filing deadline is September 1 of each year.
Once an appeal is filed with the assessor, a review of the appeal and documentation supplied with the appeal will be made. A review of the assessment record is made to determine any obvious problem or error. If the property assessment is in question, a Deputy Assessor will physically review the property as well as the market data used to set market values in that specific market area. Any changes in the assessment will be documented and the appeal will be responded to and mailed back to the property owner.
If the property owner is still dissatisfied with the decision and believes a second review is warranted, he has the option of appealing the assessor's decision to the County Board of Equalization. The County Board of Equalization will then schedule a hearing time to hear from both the property owner and assessor as to the property assessment. A third level of appeal is available, and that is an appeal to Arizona State Tax Court. This is a formal appeal process through the Maricopa County Court system.