Phoenix is the largest and most popular city in the state of Arizona for a reason. It has an excellent cosmopolitan lifestyle, comparable to that of many other major American cities, with fine dining, trendy bars, diverse culture, professional sports teams, and various other activities constantly being put on within it’s city limits. The city is also close to areas like the Tonto National Forest and Lake Pleasant, making it an ideal place to buy a large home for an equal amount of urban entertainment and rural Southwest getaway. However, before you purchase a home in the Phoenix area, it’s important to know some hidden costs that you may have not taken into account when you saw a home’s list price. Things like property tax, which can quickly make an affordable home suddenly unaffordable on an annual basis. Below are some details about property taxes on a home in Phoenix and how they compare to other cities in the United States.
WHAT ARE THE MANY VALUES OF A HOME IN PHOENIX, ARIZONA?
In short, property tax in the state of Arizona is ten percent of the value of your home. However, this statement is relatively unspecific to how that value is actually calculated. There are two values of a property in Arizona: the limited property value, or LPV, and the Full Cash Value or FCV. The limited property value is determined by someone from the state of Arizona coming by your Phoenix home and assessing what it is worth based on a number of different types of criteria. This value will either be equal to or significantly lower than the full cash value, which is the current market value and what the home would sell for in the current real estate market. Whatever the limited property value of a home is, ten percent of that would be considered the assessed value. From that number, you would compute the property tax for your Phoenix home in a number of ways.
HOW DO YOU COMPUTE PROPERTY TAX IN PHOENIX, ARIZONA?
For the Phoenix area, property taxes are going to be higher than the rest of Arizona, because a slightly larger percentage is levied for water, schools, bond issues, and all the other things residents of Phoenix must pay for to live in a major American city. However, this property tax rate varies around the city of Phoenix itself as some neighborhoods are charged higher taxes for the aforementioned services than others. So, generally speaking, the average property tax rate in Phoenix is around 13 dollars per one hundred dollars of assessed value with the assessed value being ten percent of the limited property value, which is determined by a property assessor from the state of Arizona. This means if your home is valued at a limited property value of one hundred thousand dollars and you have to pay thirteen dollars per one hundred dollars, you would be paying around $1300 per year in property taxes, which is a little over one hundred dollars per month. In simpler terms, the property tax rates in Phoenix are about 1.3 percent of the total limited property value. Of course, this 1.3 percent is only for example purposes and it can vary up or down from year to year.
HOW DOES PHOENIX PROPERTY TAX COMPARE TO OTHER MAJOR CITIES?
Property tax rates in Phoenix are relatively low compared to those in the rest of the country, especially in major American cities. Phoenix and the state of Arizona is 36th on the list for property tax rates in the United States, surprisingly behind the likes of New York City, whose property tax rate is only around .72 percent on average, which is well below the state wide property tax rate of New York at 1.64 percent on average; and Los Angeles, whose property tax is about 1.2 percent on average, which is above the statewide property tax rate of about .81 percent on average. The highest property taxes in the country are in New Jersey who has a whopping 2.38 percent property tax rate state wide and higher in cities like Newark; Illinois with a 2.32 percent property tax rate and much higher in cities like Chicago; Wisconsin with a 1.96 percent property tax rate and even higher in cities like Milwaukee; and in Texas, who has a 1.9 percent property tax rate that is taken directly from the market value of the home, making property taxes in the state’s major cities of Dallas, Houston, Austin and San Antonio especially high. In other words, property taxes on a home in Phoenix, Arizona shouldn’t be to much of a stretch to pay, unless your home ends up having a very high assessed value—which means you’re probably living in a spectacular home for Phoenix, Arizona where the median home price is around $200,000.
2 Point Highlight
Which means if your home is valued at a limited property value of one hundred thousand dollars and you have to pay thirteen dollars per one hundred dollars, you would be paying around $1300 per year in property taxes, which is a little over one hundred dollars per month.
Phoenix and the state of Arizona is 36th on the list for property tax rates in the United States, surprisingly behind the likes of New York City, whose property tax rate is only around .72 percent on average, which is well below the state wide property tax rate of New York at 1.64 percent on average; and Los Angeles, whose property tax is about 1.2 percent on average, which is above the statewide property tax rate of about .81 percent on average.
