Understanding homestead exemptions in Arizona: Things to know

Dated: March 25 2021

Views: 0

The average homeowner pays just over $2,200 in property taxes every year. Property taxes and surprise expenses can scare potential homeowners away from buying property.

To ease the financial burden taxes can have on homeowners, the homestead tax exemption was created.

But what is a homestead? Do you qualify? Here’s what you need to know about homestead exemptions in Arizona.

What is a Homestead Tax Exemption?

Homestead tax is an exemption for homeowners that makes a percentage of the home’s value not taxable. The term “homestead” comes from the fact that qualifying properties are residential homes occupied the primary owners.

For example, if you have a $300,000 home and your property tax is 1%, you would owe $3,000 every year in property tax. However, if you qualify for a $100,000 homestead exemption, you would only need to pay property taxes on $200,000 of your home’s value. This would drop your annual property taxes to $2,000.

Homestead Tax Exemptions in Arizona

Arizona is one of the 46 states that offers a homestead tax exemption. The goal is to relieve the pressure and burden of property tax on homeowners, to make homeownership more accessible. In Arizona, you can exempt up to $150,000.

However, exemptions are based on the property, not the individual. For example, a married couple that owns a home is seen as a singular entity, not as two separate entities that can both qualify for a property tax discount.

In Arizona, houses, land, condominiums and mobile homes, all qualify for tax exemption. However, you have to actually live in the home. Rental properties do not qualify.

How Arizona Homestead Tax Exemptions are Different Than Other States

Homeowners in Arizona don’t have to do any extra work to qualify for a homestead tax exemption. If your home qualifies for the exemption, the state will automatically provide it to you when you are billed.

In Arizona, the homestead exemption is not applied to a child or spousal support, and the courts will not consider it in their judgment.

In the event of bankruptcy, Arizonans are not allowed to use federal bankruptcy exemptions, they are limited to state-only exemptions.

Have more questions about homeownership in Arizona? Get the help of one of our dedicated team membersClick here to contact us!

Latest Blog Posts

Fun Things to Do This Halloween in AZ

There’s nothing like Halloween in Arizona - the fall colors, apple orchards, and community events take this seasonal celebration to a whole new level. So bring the gang and check out these fun

Read More

How to Enjoy Watching Basketball at Home

There’s something to be said about sitting courtside in a stadium, but streaming the NBA playoffs can be just as exciting as watching live basketball. If you’re staying home, there are

Read More

Requirements for Buying a New House in Arizona

When buying a new house in Arizona, it’s important to make note of any requirements to hasten the buying process and to protect your interests. These may include anything from bank statements

Read More

Memorable Places to Visit This Fall in Arizona

Looking for things to do in Arizona this fall? There’s no better place to spend the autumn season. Check out these destinations in the Copper State.Apple Annie’s Orchard2081 Hardy Rd,

Read More