Your property tax bill in Arizona is based on a number that is not your home's market value. Most homeowners do not know this. It costs some of them money they don't need to spend.
01The Two Numbers
Every Arizona property has two values assigned by the county assessor. The first is the Full Cash Value — the assessor's estimate of what the property would sell for on the open market. If your home is worth $800,000, the Full Cash Value is supposed to be close to that.
The second is the Limited Property Value. This is the number your tax is actually based on, and it cannot increase by more than 5 percent per year regardless of what happens to the market. When Phoenix home values shot up 30 percent in 2021 and another 20 percent in 2022, the Limited Property Values of established homeowners barely moved. New buyers had their values reset to market at purchase, because the 5 percent cap applies going forward from the acquisition date. Same house, different history, different tax base.
02How the Rate Works
Arizona's residential property tax rate is applied to 10 percent of the Limited Property Value, not the full amount. That 10 percent figure is the assessment ratio for residential property. On a home with a $500,000 Limited Property Value, you are taxed on $50,000. The county then applies the levy rate to that $50,000.
Maricopa County's overall levy rate runs around 8 to 9 percent of assessed value, depending on what special districts your property sits in — school district, fire district, flood control, community facilities district. The total rate is the sum of all those levies. This is why two homes on the same street can have meaningfully different effective tax rates. On a $1 million home in Scottsdale owned for ten years, the effective property tax might run $3,000 to $4,000 per year. On the same home bought yesterday, it might run $7,000 to $9,000.
When Phoenix home values shot up 30 percent in 2021, established homeowners barely felt it on their tax bills. New buyers reset to market on day one.
03The Exemptions Worth Knowing
The Senior Freeze is genuinely valuable and underused. Homeowners 65 and older who meet income requirements can freeze their Limited Property Value for renewable three-year periods. In a rising market, this means the tax base doesn't increase with values. You apply through the county assessor's office between January and March. If you qualify and haven't applied, you are leaving money on the table.
As of January 1, 2026, veterans with a 100 percent service-connected disability rating qualify for a full property tax exemption on their primary residence. This is new. If it applies to you or someone in your household, the application goes through the county assessor.
04The Practical Takeaway
If you are buying a home that has been owned for a decade or more, understand that your tax bill will be substantially higher than the seller's. The Limited Property Value resets at acquisition. The gap between what the seller was paying and what you will pay can be several thousand dollars per year on a high-value property. That difference belongs in your cost analysis before you close.
If you have owned your home for several years and haven't checked the Full Cash Value recently, look at it. The assessor is supposed to track the market, but assessors are imperfect and busy. In a correcting market, the Full Cash Value can lag on the high side. If comparable sales support a lower valuation, you can appeal — and a successful appeal reduces your tax base.
Arizona's property tax system is favorable compared to most states. The rate is low, the cap protects long-term owners, and the exemptions are real. What trips people up is not the rate. It is not understanding which number the rate is applied to, and not realizing that number changes when the property changes hands. Sources: taxuni.com, turbotenant.com, azdor.gov
