Arizona is open for business with business property tax cuts and targeted incentives aimed at job creation.  That’s the purpose and strategy behind HB 2001 that was signed into law last month.  That’s what the sponsors want you to remember.   What they didn’t tell you is what will happen to residential property taxes.  Buried deep in the 214 page bill is a change to the tax treatment of residential property.  And in this bill what they didn’t tell you will cost you.  How so? Read on.

Are you a Class 3 or Class 4 Property Owner?

Class 3 properties include owner occupied primary residences and vacation/second homes.  The  picture above is my Property Notice of Valuation I received in February and shows the legal classification of my home.   If your property falls in the class 3 category, you are currently a recipient of a rebate from the State General Fund.  The State Aid Credit reduced my property tax bill by $273.74.  You can see  the value of this aid or credit in the detail of your tax bill.  To see how to see the detail of your tax bill including any credit for State Aid Credit, click on researching your tax bill.   Rental properties fall into the class 4 category which do not currently receive the State Aid Credit.

Under the new “Jobs Bill”, vacation and second homes will lose the rebate /credit resulting in increased property taxes.  Besides automatically disqualifying second/vacation homes from the credit, owner occupant homeowners will lose their credit or rebate unless they go through the process of signing and returning  an affidavit beginning in 2012 and then subsequent even-numbered years that they live in the home or if it is being leased to a relative.   The affidavit must be mailed along with the annual Notice of Full Cash Value which must be returned to the County Assessor within 60 days or the residential property will be reclassified as Class Four and owners will see their taxes increase by as much as $600 for the year.  Not being aware of this change and forgetting to return the signed affidavit beginning in 2012,  which is bound to happen to many homeowners,  will mistakenly and automatically increase property taxes for owner occupants who should receive the credit.  **Make sure that next February you read in detail any propert tax valuation notices you recieve and return the affidavit promptly so you don’t lose out on the tax credit you’ve been automatically receiving so far!**

Related Posts:

Making sense of Maricopa county taxes

In 1991, the Base Realignment and Closure Commission recommended that the Williams Air Base close its doors.  Two years later in 1993, it became a reality and the former Air Base began its search for a new identity.  A plan was developed to transform the base to be an aerospace center and an educational, research and training facility with the airport serving as a reliever to Phoenix Sky Harbor International Airport.  Currently, aviation uses include commercial passenger service, aircraft manufacturing, maintenance, modification, air cargo operations and flight training.  In 2008, the former base became the Phoenix Mesa Gateway Airport.

A Historic Beginning for Williams Field

In 1942, the facility was named Williams Field in honor on Charles Linton Williams, an Arizona born pilot.  Williams Air Force Base became the premier pilot training facility, graduating more student pilots and instructors than any other base supplying 25 percent of the Air Force’s pilots.  During its history, more than 26,500 men and women earned their wings at Williams Field.

Phoenix Mesa Gateway Airport Now

More than 35 companies operate at Phoenix Mesa Williams Gateway complex contributing to the east valley economy.  A significant addition was the decision by Allegiant Air to establish a new base in the valley of the sun in 2007.  Allegiant Air now serves 28 destinations including the recent addition of Minot, ND to its flight itineraries.

Phoenix Mesa Gateway Airport provides a fantastic opportunity for visitors and second homes owners to access the east valley.

Real estate information can be found at East Valley Real Estate.

Granite counter tops in Phoenix homes are always considered an upgrade and a distinguishing characteristic in any kitchen. The Arizona Regional MLS has recently made “granite countertops” a searchable field for those buyers where granite kitchen counter tops are a “must have”.  While buyers and sellers alike will attest to the natural beauty of granite, the facts behind this natural igneous upgrade are sometimes unknown. 

Igneous crystalline formation of Quartz, Feldspar and Mica   

I was lucky enough to find a Tracy Makowski, the Branch Manager  at Interceramic Marble Collection in Tempe who showed me around their warehouse showroom and allowed me to take the pictures featured in this post.

Granite slabs typically come in two thicknesses, 2 cm. and 3 cm., which translates into  3/4 and  1  1/4 inches  for those that are metrically challenged. A basic 62″ x 109″  two centimeter thick slab can weigh between 600 – 800 lbs. Granite is an igneous rock  formed from magma. The word granite comes from the Latin, granum, a grain, in reference to the coarse-grained structure of this  crystalline rock. Granite is formed from magma as it cools far beneath the earth’s surface very slowly allowing the crystals to form.   Granite is comprised of quartz, feldspar, mica, and to some degree hornblende.  Granite kitchen counter tops are a standard among many Phoenix luxury waterfront community homes.

As I walked around the showroom it was interesting to see the country of origin of the granite slabs which included Brazil, India, Italy, Finland, Norway, Madagascar, Africa, and Argentina.

All installed granite slabs that I’ve seen have a polished finish.  And most of the slabs in the warehouse also had a polished finish. The other type of finish is a “leathered”, satin or antiqued style.  The leathered finish has a rougher texture and more of a matte finish.

Below is a YouTube view explaining the process starting with extraction from the quarry to installation in the kitchen.

If you would like to receive listings that have granite kitchen counter tops in the Gilbert, Chandler, Mesa and any Phoenix area city, click on receive e-mails of homes with granite counter tops. 

Information for homeowners who need to sell but are underwater with their mortgage can go to Gilbert and Chandler Short Sale information.

Maricopa County Tax Bills Arrived – Some Happy, Some Not

The motivation for this article comes from all the recent news about taxes, and some buyers who say interesting things like “The property values have gone down, so the taxes better be lower!”   With that I thought it was the right time to dig in and get to the bottom of this sensitive topic.   I’m glad I did because there are some interesting facts of which I was unaware.  Read on and find out what is myth, what is reality,  and discover some unknown facts.

The Basics of Maricopa Property Valuation- Limited Cash Value and Full Cash Value, and primary and secondary taxes

There are two assessed values used in determining your tax bill.  The primary assessment is called the “Limited Value”, and the “Full Cash Value” is the secondary assessment .  Most of the time they are the same value; however the limited value can never be higher than the full cash value.  Besides the possibility of being different numbers, each one is used in the computation of different taxes. 

The Limited Property Value (LPV)  assessment used to calculate primary taxes  is determined by a statutory formula mandated by the Arizona State Legislature.   The Maricopa County Assessor’s website further explains,  “The LPV is used to compute primary taxes for the maintenance and operation of school districts, cities, community college districts and counties. The LPV cannot exceed the property’s Full Cash Value.”   In most cases, the primary tax based on the limited value assessment is the larger portion of property taxes.

The Full Cash Value(FCV) is intended to be a reflection of the market value of the property including land and improvements.  Quoting again from the Assessor’s website, “The FCV is used to compute secondary taxes, which may consist of bonds, budget overrides, and special districts such as fire, flood control, and other limited purpose districts.”  When you appeal the valuation, you are challenging the Full Cash Value portion of the assessment.  For more information on this process, click on appealing the property tax valuation. 

The devil is in the details of your tax bill

To really understand what is happening with your tax bill you need to drill down and identify each component.  The general categories under which taxes are listed are Primary(Limited) Tax Amounts, Secondary (Full Cash) Tax Amounts, and Special District Details.   The line item details of these categories are very revealing and explain why taxes decrease or increase.  For example, those living in the Nadaburg Elementary School District were significantly impacted and most likely surprised by the increase from 2009 to 2010.  Below is the actual tax detail for a resident in Wittman whose overall taxes increased from $1,318 in 2009 to $2,055 in 2010 due to a 346%  increase in the Nadaburg Elementary School district assessment, or $961. See line item detail below.

This is why it is important to understand and analyze the specific line items of your tax bill.

Analyzing the details of you Maricopa County Tax bill

To see the detail of your taxes start out at the Maricopa County Assessor’s website.  Look for the “Advanced Search Options” link which will take you to a page where you can enter your address. You’ll be able to search based on address, subdivision, or your last name and street.

Once you’re on the assessor’s page for your property, you can access the Maricopa County Treasurer’s website (where the tax line item detail resides) via a link on the assessor’s page.  Look for the link “View Tax Information”.

This will take you to the Maricopa County Treasurer’s website (don’t give up we’re almost there!)  This will tell you your most current tax bill as well as the history for your property.  The last link you’ll need to click is the “Tax Bill” link in the upper left hand corner of the page. The tax bill page will break down your property taxes by line item detail and you can also see which special tax district assessments you pay for at the bottom of the page. Make sure and scroll down to see the individual taxes.   It’s also nice because it shows the previoius year vs. the current year tax liability.   While my overall property tax bill went down, there were some that did increase.   You’ll also notice that the majority of your taxes go towards education.

Remember the assessor sets the valuation of the property and the treasurer’s office assigns the taxes for the property based on the assessed values, but these activites take place at different times of the year.   You receive your notice of valuation typically in February of valuation of your property for the next calendar year. 

The next important event is in September when property owners are advised of their tax liability for that year.   You may say “Wow, we find out almost 3/4 of the way through the year of our taxes for that year?”  Correct, but you also pay your taxes in arrears so the first half taxes are due October 1st, and the second half are due March 1st of the next year.

Lastly,  there is a common but mistaken belief that property taxes should rise and fall in sync with property value.  That’s very appealing right now when home values have fallen.  Charles Hoskins, the Maricopa County treasurer answered the question in a recent article in The Arizona Republic, “We often hear from citizens wanting to know why their tax bills have gone up, even though the assessed value of their property has gone down. And the answer is increased government spending,”    Operating budgets are established which drives  the total  tax levy required via direct taxation and then the tax rates are set to support the budgets.

I believe the best way to summarize the process is property values and assessments do NOT determine the total taxes  that will be collected.  They only determine the DISTRIBUTION of the total tax levy among homeowners.

Fortunately, Arizona has the 39th  lowest property taxes in the nation.  Just ask anyone who has relocated from back east.  My sister lived in New Jersy and her property taxes were more than my total house payment!  One town in Massachusetts has seen their property taxes increase 64% since 2000.   Right now many homeowners are seeing their taxes turned back to what they were paying during 2000 or 2001.   But every property’s tax will be different so check out the Treasurer’s website and see how yours compare.

Related Post:

The AZ Jobs Bill and its affect on residential property taxes

This giant checker board is actually the “guts” of an unbonded post tension slab.

Post tension slabs are used to create a monolithic slab that is stronger than the typical slab and foundation that is poured in stages.  Post tension slabs are used in many parts of the country where the soil has high shrink / swell potential, also commonly know as expansive soil because they resist soil movement.   Many parts  of the Phoenix area have soil that is expansive  and exhibits a high shrink / swell potential.  The USDA has published a shrink / swell potential map for Phoenix which identifies the cities or towns most affected by this condition.

The Process of Creating Post Tensioned Slabs

Concrete performs extremely well under compression (pushed together), but poorly in tension (pulled apart).  The cables or tendons are stretched with hydraulic jacks  up to 25,000 psi and clamped at the ends.  The result is the tendons constantly keep the concrete in compression forming a stronger more reliable foundation and slab.

The plastic sheathed cables are positioned in the slab at the correct height and distance  using “chairs”, the little cone shaped supports. The plastic coating allows the cables to move within the concrete after it is poured and  stretched.  This is why you may also hear the term unbonded, since the cables move independently of the slab.  Once the concrete is poured and has reached approximately 75% of the desired strength, the cables are stretched using a hydraulic jack.  Applying the pressure to the concrete after it is poured and cured is the “post tension” part of the name.  The cables are then anchored at the ends and allowed to cure.

How Do I Know If My Home Has A Post Tensioned Slab?

Since the cables or tendons in the slab have been stretched to high tensile strengths, it is extremely important that you do not drill, cut, chisel or do anything to expose the tendons.  An easy way to  verify if the slab is post tension is to go to the edge of the garage by the garage door and check for  stamped warning in the concrete similar to the one on the left.

What If My Dream Home Doesn’t Have A Post Tensioned Slab?

The majority of the homes in Phoenix do not have post tension slabs.  Home builders may choose not to use post tension slabs if the house is not in a high risk area.  The best approach is to consult the shrink / swell map of the Phoenix area to be aware of the areas where it would be a concern.  If the house uses a slab on grade type of foundation, look for severe settling cracks, especially if they are recent.  A qualified inspector can also be a good source of information.

One of the most important and simplest things you can control is to keep water away from the house.  Many home builders suggest keeping sprinklers and landscaping at least 12 – 24  inches away from the side of the house.

Being aware of the expansive soil condition is the first step.  Looking for excessive settling cracks and continued settling is important.  Using a qualified inspector is key and ultimately keeping water a safe distance from the perimeter of the home will help avoid further risk.

For further questions or assistance in searching for homes, feel free to call me at 480-326-8571.

Amazingly,  Sun Lakes has over 430 waterfront homes, and that is not counting those homes on golf courses within Sun Lakes that also have lakefront property.  This may come as a surprise since Sun Lakes is known for it’s well manicured 18 hole golf courses, and 5 club houses.  This 3,500 acre active adult community is home to approximatley 16,000 residents.

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“Lots to do in Sun Lakes”

Besides enjoying the tranquil and relaxed feeling of living in a lake community, you won’t get bored if you reach out and get involved in the many social  opportunities  offered in Sun Lakes,  which is separated into 5 communities; Sun Lakes Phase I, Oakwood, Ironwood, Palo Verde, and Cottonwood. Each community offers it’s residents access to the community club house and recreation center as well as a buffiet of activities such as dancing, swimming, aerobics, tennis,  arts and crafts, and more.

The housing opportunities  have something for everyone’s budget, ranging from modest affordable homes up to 3,500 sq.ft. luxury homes on the golf course.   To gain appreciation for the wide choice of real estate opportunities in Sun Lake, click on:

Homes for Sale in Sun Lakes Active Adult Retirement Community

For those that are looking for a waterfront or lakefront home in Sun Lakes:

Waterfront Homes in Sun Lakes Active Adult Retirement Community

Back in 1972 when Ed Robson developed Sun Lakes, it was a stand alone community and separate from it’s neighbor to the north, Chandler.  Now it blends into the prestigious Ocotillo Lakes area in Chandler and enjoys great proximity to freeways, healthcare, dining, libraries and shopping.

Satellite view of Sun Lakes

The clients I have helped purchase homes in Sun Lakes have spoken very favorably about the community.  There is a strong sense of community and for those willing to get involved, making friends comes very easy.  The activities at the recreation center were given very high marks by one couple.

Given the wide range of housing options, the location, experience of past clients, amenities, and the abundance of waterfront homes, it is definitely a community for active adults that I would recommend.