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 in 2024 at 16.5% (17% in 2023) 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.