One perks of buying in Payson, Arizona is that property taxes are often lower than other parts of the country. However, the way we calculate property taxes in Arizona is both unique and quite confusing. Property taxes exist across the United States, but the amount of taxes due and method of calculation varies widely among different states, counties, and municipalities. Here we will consider how your property tax bill in Payson, Arizona is calculated and billed. We will also look at what property taxes are used for.
When are my property taxes due?
Statewide Arizona bills property taxes in arrears which means that the taxes are due after they are incurred. Rather than paying the taxes at the beginning of the year for the time you own the property in the coming year, you first own the property and receive a bill for the preceding time you have owned the property.
Property tax rates are set on or before the third Monday of August of each year by the County Board of Supervisors, and the property tax statements are mailed out from the Treasurer's office in late September or early October. Property taxes can then be paid in one payment or in two installments.
● 1st half of the year property taxes are due October 1st, and they become delinquent if not paid by November 1st.
● 2nd half of the year property taxes are due March 1st of the following year and become delinquent if not paid by May 1st.
Notification of Value
A Notice of Value is mailed to a property owner on or before March 1st of each year by the County Assessor. This notice contains both a Full Cash Value (FCV) and a Limited Property Value (LPV).
● The Full Cash Value (FCV) is defined under Arizona Law as the market value of your property including the land, plus improvements. It should be noted however that due to the limitations of mass appraisal, the value determined by the County Assessor usually falls below the market value of your property. It is the value determined by the assessor on a type of property for tax purposes in a geographic region. This value appears on the Notification of Value, but it is not the value ultimately used to determine your property tax bill. It is merely calculated as a baseline for Limited Property Value (LPV) in determining your property tax bill.
● Limited Property Value (LPV) is similar to FCV except it is limited by law. This is the value used to calculate your tax bill. LPV is calculated based on The Arizona Constitution and Statutes. The LPV may continue to rise annually but can never exceed the FCV value. Beginning in tax year 2015, the tax rates used in determining your property tax bill are applied only to the LPV.
Once the Limited Property Value is determined, the assessment ratio is then applied based on property use as follows:
● Residential = 10%
● Vacant Land = 15%
● Commercial = 18%
This Assessment ratio is then applied to the Limited Property Value to arrive at the Assessed Limited Property Value. Local county and municipal taxes are then applied to this number to arrive at your property tax bill.
Example Payson Residential Property Tax Bill:
Full Cash Value (FCV) = $300,000
FCV purports to represent full market value, but it is not used except as a baseline to make sure the Limited Property Value stays within its legal limits.
Limited Property Value (LPV) = $270,000
The LPV is statutory and can never be more than FCV. This number is used to begin to arrive at the property tax bill.
Assessed LPV = $27,000
LPV is then multiplied by the Assessment Ratio to determine the Assessed LPV. In this case because we are considering a residential property, the assessment ratio is 10%. We multiply $270,000 x 10% to get an assessed LPV of $27,000.
Payson Jurisdiction Tax Rates
We now consider the tax rates for the local jurisdiction of Payson, Arizona which is in Gila County. These numbers will vary slightly for areas outside of Payson like Christopher Creek or Pine-Strawberry because a portion of property taxes is based on the municipality.
Gila County 0.0419
St. School Equ. Tax 0.004566
Town of Payson 0.003594
SD # 10 Payson 0.003594
Comm. College 0.009578
G.C. Library Dist. 0.002378
SD # 10 Budg Ovrrd 0.005063
Sd # 10 Bonds (A) 0.011474
Tax Bill = $3,504.74
We then multiply the Assessed LPV of $27,000 times .129805 for our local taxes to arrive at a property tax bill of $3,504.74.
What are my property taxes used for?
Property taxes are used for the maintenance and operation of school districts, cities, community college districts, counties, and the state, as well as secondary taxes for bonds, budget overrides, and special districts such as fire, flood control, and other limited purpose districts. The reason they will vary slightly within the state is because there are different needs in different geographical regions and municipalities.