Arizona property tax: the 5% value limit and how bills work

How does Arizona set the value that is taxed?

Two values appear on your notice.

• Full cash value is the assessor’s estimate of market value, set annually with standard appraisal methods (A.R.S. § 42-11001).
• Limited property value (LPV) is last year’s LPV plus 5%, and it can never exceed full cash value (§ 42-13301). Property taxes are based on LPV, not on full cash value, for nearly all homes (§ 42-11001).

The Maricopa County Assessor gives an example: if LPV was $100,000 last year, it is $105,000 this year even if the market value jumped. The rule is the “Rule A” method.

LPV is reset by a “Rule B” calculation when the property changes, for example by new construction or demolition worth 15% or more of full cash value, a split or consolidation of lots, a change of use, or loss of a special valuation program (§ 42-13302). The assessor then sets LPV at a percentage of full cash value comparable to similar properties. It can go down as well as up. A change of owner is not among the triggers listed in § 42-13302(A), apart from the senior program below.

Because LPV trails the market, two similar neighbors can have different tax bills. For the market side, see Arizona home prices.

How is the tax calculated?

The formula is:

limited property value × assessment ratio × tax rate per $100 of assessed value ÷ 100.

For class three property, the assessment ratio is 10% (§ 42-15003). Class three is residential property that the owner occupies as a primary residence, or that a relative of the owner occupies as a primary residence, valued with up to 10 acres (more than 10 and up to 40 acres in some cases) (§ 42-12003). A home you rent out is classified differently. If you move in, you ask the assessor to change the legal class; the Maricopa County Assessor asks for a document such as a driver’s license, voter registration card or tax return showing your name and the property address.

Rates add up all the jurisdictions where the home sits: county, community college, city, school districts and others. They are divided into a primary rate and a secondary rate, which pays for voter-approved bonds. A separate Article 9, Section 18 limit caps most primary taxes on residential property at 1% of full cash value as limited by that section; it does not apply to bond debt or voter-approved overrides.

The state-aid reduction

State law lowers the primary school tax on residential property by a share of the school district’s qualifying rate. The reduction on one parcel cannot exceed $600 (A.R.S. § 15-972). Maricopa County’s rate table shows it as an “approximate residential primary rate,” lower than the full primary rate.

What exemptions and relief exist?

The statute text I read shows $4,188; the Department of Revenue raises it by formula each year, so confirm the current figure with the assessor. For the senior program, the application deadline is September 1, and the assessor recalculates LPV if the owner sells, moves out, stops renewing, or the home changes by more than 15% (Maricopa County Assessor, as of October 2026).

Example: a Phoenix home at 2026 Maricopa rates

This is a hypothetical example. Assume a Phoenix home with an LPV of $350,000, owner-occupied, in Phoenix Elementary District #1, the Phoenix Union High School district and the City of Phoenix (Maricopa County rate area 011300). Assessed value: $350,000 × 10% = $35,000.

Without the state-aid reduction, the full primary rate of 6.9834 would give $2,444.19 of primary tax, so the reduction saves about $529.48 here, under the $600 limit. Your rate depends on your school districts and any special districts, so look up your own area code in the county table.

If LPV rises the full 5% next year, it becomes $367,500 and the assessed value $36,750. See the Phoenix guide and closing costs in Arizona for how this fits a purchase, and our guide on the escrow account if your lender collects the tax monthly.

When do you pay, and how do you appeal?

Delinquent taxes bear 16% simple interest a year, a part month counted as a whole, but no interest is collected if the full year’s tax is paid by December 31 (§ 42-18053). Your petition must state your opinion of value and a method, such as a comparable property’s value or the sale of your property (§ 42-16051).