AZ Property Taxes and how this works at your Close of Escrow
My next few blogs will be moving towards education.
I am often asked questions about investing in tenant occupied properties. I am going to break the top 50 questions that I am asked into sections and will dedicate the next few blogs for this. If you have missed one, scroll down and see the data rich information from past blogs.
Property taxes are one of the most common questions so let’s start this week with Property Taxes.
Many investors come from other states where the property taxes are reassessed at Close Of Escrow to a much higher rate. Guess what? NOT in AZ! In Arizona the county assessor assesses the property on the ASSESSED Value not the Sale Price. This is typically much lower than the sale price. Our taxes here are paid in arrears and while you can pay in full once a year, the taxes are typically split into two payments and due twice a year.
Let’s say that the accessed taxes are $5000.00. Great at Close of Escrow the taxes are prorated. If the Seller will owe for a part of the period; the Buyer will get a credit from the Seller at the CLosing to compensate for the next payment.
People have asked me how the access value is done and frankly, I am not sure. What I will say tath sometime in February there is a postcard sent out for the taxes fro the following year. Watch for htis and if you see that there is a problem this is the time to contest the taxes-not later.
Around the 20th of September of every year, the taxes are public record and viewable on the assessor’s website.
CAUTION, keep your mailing address up to date with the country so that you receive the notices.
One last question answered as well. Will I be charged a transfer tax at the CLosing? When I first heard about this, I had to look this up many years ago. Here is the really good news-THERE IS NOT A TRANSFER TAX IN THE STATE OF ARIZONA!
A touch on personal property taxes. Mostly dealt with on Assisted Care or Mobile Home Parks. Be sure to look for outstanding personal property liens as this typically is accessed against the perosanlproerty and does not always show up on your title reports. If purchasing this type of property, simply have the seller provide the documentation that this has been paid.
This market is STILL hot and please call me to discuss your needs! I answer my phone or return the call quickly! 602-688-9279.
Hope that you have a GREAT day!
Remember to look for my book on Amazon about investing in commercial real estate!
This is clearly one of the benefits of doing business in Arizona…as in California, the property is re-assed at 1.25% of the purchase price. Crazy, for sure.
Fantastic information! Taxes in AZ to me is one of the mail reasons why I feel there is such an opportunity here. The low taxes significantly impact the ROI of 2-4 unit properties in a positive way. Can make things very attractive.
Real estate taxes are much lower here compared to other parts of America. I believe this is one of the main attractions to Arizona real estate. Plus, all information is made public quickly. More and more people are coming to Arizona to live and invest at the same time. We are a business friendly state.