Property Taxes
Maricopa County tax calculations & new construction rules
How Property Taxes Work in Maricopa County
Arizona property taxes are calculated by multiplying the assessed value of a property by the combined tax rate of all overlapping taxing jurisdictions. For residential property, the assessed value is 10% of the Full Cash Value (FCV) determined by the Maricopa County Assessor.
Full Cash Value (FCV)
The Assessor determines the Full Cash Value of your property based on comparable sales, cost approach, and market conditions. This is similar to fair market value.
Assessed Value
For residential property, the assessed value is 10% of the Full Cash Value. This is the number your tax rate is applied to.
- •Residential: 10% of FCV
- •Commercial: 16% of FCV (declining to 15% by 2027)
- •Vacant land: 15% of FCV
Tax Rate
The combined tax rate is the sum of all overlapping taxing jurisdictions — county, city/town, school districts, community colleges, and special districts. Paradise Valley typically has a lower combined rate than most Maricopa County municipalities because the Town has no property tax of its own.
- •Maricopa County general levy
- •Maricopa County flood control
- •Scottsdale Unified School District
- •Maricopa Community College District
- •Central Arizona Water Conservation District
- •Note: Town of Paradise Valley levies NO property tax
Primary vs. Secondary Taxes
Arizona splits property taxes into primary (operating budgets, capped by Prop 117 at 5% growth per year) and secondary (bonds, overrides, special districts, no growth cap). The Limited Property Value (LPV) applies only to primary taxes.
Example Tax Calculations
Based on approximate combined tax rates for the Paradise Valley area:
| Home Value | Assessed (10%) | Est. Annual Tax |
|---|---|---|
| $2M | $200,000 | $13,000 |
| $5M | $500,000 | $32,500 |
| $10M | $1,000,000 | $65,000 |
Estimates are approximate. Actual rates vary by specific location and taxing jurisdictions. Town of Paradise Valley levies no property tax of its own.
Rule B — New Construction Property Taxes
When a new home is built, the property's Limited Property Value (LPV) is set to the Full Cash Value (FCV) in the first year of assessment. This means new construction owners may see higher primary taxes in year one compared to owners of similarly valued established homes whose LPV has been capped by Proposition 117.
Proposition 117 (2012) caps the annual increase of a property's Limited Property Value at 5% per year. This helps existing homeowners keep primary taxes stable over time.
For new construction (Rule B properties), there is no prior LPV — so the starting LPV equals the first FCV assessment. There is no "discount" in year one.
After the first assessment year, the 5% annual cap kicks in, and the LPV will grow at no more than 5% per year, regardless of how fast the actual market value rises.
Secondary property taxes (bonds, overrides) are always based on FCV, not LPV — so they are unaffected by Rule B or Prop 117.
The County Assessor typically values new construction based on the costs reported in the building permit plus land value.
Example
You build a $5,000,000 home in Paradise Valley. In year one, the FCV is assessed at $5,000,000 and the LPV is also set to $5,000,000.
Your primary taxes in year one are based on the full $5M value. Starting in year two, even if the market value rises to $5.5M, your LPV can only increase by 5% to $5,250,000 — so your primary tax base grows more slowly than market appreciation. Over time, this creates meaningful savings compared to what you'd pay if taxes were based on full market value.