Arizona Property Tax Law Changes 2026: What Homeowners Need to Know

Updated March 2026

Key Takeaway

Arizona's 5% annual cap on primary residences (Proposition 117, 2012) limits Limited Property Value increases, but your Full Cash Value can still jump. The state offers a valuation freeze for seniors 65+ and a property tax deferral program. Understanding the difference between Full Cash Value and Limited Property Value is the key to Arizona property taxes.

Arizona Property Tax Snapshot: 2026

Median home value: $265,600
Average annual tax: $1,647
Effective tax rate: 0.62%
Assessment ratio: 10% of market value
Reassessment cycle: annual

Two Values: Full Cash Value vs. Limited Property Value

Arizona has a dual valuation system that confuses many homeowners:

Full Cash Value (FCV): The county's estimate of market value -- used for bonded indebtedness taxes
Limited Property Value (LPV): Capped at 5% annual increase (Prop 117) -- used for most other taxes

Your primary residence taxes are mostly based on LPV, so the 5% cap protects you from large swings. But secondary taxes (bonds, overrides) use FCV, which has no cap. Always check both values on your assessment notice.

Proposition 117: The 5% Cap

Passed by voters in 2012, Prop 117 limits annual Limited Property Value increases to 5%. This is similar to California's Prop 13 but much less restrictive (5% vs. 2%). The cap resets when the property sells. Unlike Prop 13, Arizona reassesses to FCV every year -- the LPV just can't grow more than 5% annually.

Senior Property Valuation Protection (Age 65+)

Arizona offers a property valuation freeze for qualifying seniors:

Age 65+ (or surviving spouse 55+)
Total household income below approximately $40,528 (adjusted annually)
Lived in the home for at least 2 years
Freezes the Full Cash Value and Limited Property Value

This is more powerful than the 5% cap because it freezes the value entirely.

Property Tax Deferral

Arizona allows seniors 65+ to defer property tax payments until the home is sold or transferred. The deferred taxes become a lien with interest. This is designed for homeowners who are house-rich but cash-poor. Apply through the county treasurer.

Assessment Ratio: 10% for Residential

Arizona assesses residential property at just 10% of Limited Property Value (the "assessment ratio"). Commercial property is assessed at 18%. This means a $300,000 home with an LPV of $300,000 has an assessed value of only $30,000. The tax rate is then applied to this $30,000 figure.

Check Your 2026 Arizona Assessment

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Arizona Appeal Process

Filing deadline: Within 60 days of notice
File with: County Assessor
Evidence needed: Comparable sales, property condition photos, record corrections

2026 Action Checklist

Review your assessment notice when it arrives
Verify all exemptions are applied (homestead, senior, veteran)
Compare your assessed value to recent comparable sales
File your appeal by Within 60 days of notice if over-assessed
Check your property record for errors (square footage, features, classification)

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