New Arizona Property Tax Requirement

A newly passed law that provides additional breaks for businesses on their property taxes may have unintended consequences for many Arizona homeowners. Beginning next year all property owners will receive an affidavit attached to their property valuation cards that require verification of the home being owner-occupied. These affidavits must be completed and returned to the assessor’s office within 60 days or else the property will be reclassified as a rental. Currently owner-occupied properties receive an automatic rebate on their property taxes of 40%, so a reclassification as a rental would result in higher taxes being charged to the owner.

The reasoning behind this affidavit requirement is to fund the new business tax break by catching the estimated 25% of rental homes that are misclassified as owner-occupied currently. While that goal may be sound there are many citizen groups, professional organizations, and lawmakers alike that see a looming nightmare of headache ahead with the affidavit requirement. So many homeowners pay little attention to the postcard sized notice of valuation that currently is sent out, likely tossing them in the recycling or filing them immediately in their tax files. It’s extremely likely that a huge number of people would fail to see they must fill out and send in the affidavit which will result in many incorrect reclassification’s of owner-occupied homes. One group leading the way to change this forthcoming requirement is the Arizona Association of Realtors who see this affidavit program as a tremendous burden on all homeowners. Ultimately this could lead to angry taxpayers and increased expenses for the assessor’s office to correct classifications after they automatically switched all because a homeowner didn’t inspect their mail carefully enough.

Efforts are underway to make changes to this program before it’s put in place next year. A budget strapped Arizona should definitely make efforts to have all properties correctly classified as rental or owner-occupied, but the burden shouldn’t be so severe on every homeowner. With persistence and reasoning its likely some change will occur, but definitely pay close attention anytime you see your notice of valuation come in the mail.

Stephen Woodall
REALTOR, GRI @ Long Realty Company

Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.


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