Arizona Property Tax: Full Cash Value vs. Limited Property Value

On your Arizona Notice of Value you see two numbers for the same house: the Full Cash Value and the Limited Property Value. Full Cash Value is the county assessor’s yearly estimate of what your property would sell for on the open market, with no cap on how much it can move. Limited Property Value is a separate figure that can grow by no more than 5% a year, and for almost every residential owner in the state it is the number your actual tax bill is calculated from.1Arizona Department of Revenue. Limited Property Value Knowing which value does what lets you read your notice correctly and decide whether anything on it is worth challenging.

What Full Cash Value Means

Full Cash Value is Arizona’s market-value estimate: what a willing buyer would pay a willing seller in a normal transaction, with neither side under pressure. County assessors recalculate it every year, so it rises and falls with local real estate conditions, and there is no statutory cap on how far it can move from one year to the next.2Arizona Legislature. Arizona Code Title 42 – Section 42-11001

Assessors use three standard appraisal methods to arrive at the number. The sales comparison approach, which looks at recent sale prices of similar homes nearby, is the most common for residential property. The cost approach estimates what it would take to rebuild the structure from scratch, less depreciation. The income approach, used mainly for commercial and rental property, values the property based on the revenue it generates.2Arizona Legislature. Arizona Code Title 42 – Section 42-11001

For most owners, Full Cash Value does not directly set the tax bill. It only drives taxes on a narrow category of property: non-mobile-home personal property and certain Class 1 property such as utilities and mines.1Arizona Department of Revenue. Limited Property Value For a house, Full Cash Value still matters for two reasons: it is the figure you would challenge if you think the assessor has your market value too high, and it sets a ceiling the Limited Property Value is never allowed to cross.

What Limited Property Value Means

Limited Property Value exists because Arizona voters approved Proposition 117 to protect owners from sudden tax spikes when the market surges. It works as a governor on taxable value. Under A.R.S. § 42-13301, your Limited Property Value for the current year equals last year’s Limited Property Value plus 5% of that amount.3Arizona Legislature. Arizona Revised Statutes 42-13301 – Limited Property Value If last year’s Limited Property Value was $300,000, this year’s cannot be more than $315,000, no matter how hot the market got.

One hard rule overrides the formula: Limited Property Value can never exceed Full Cash Value. If the market drops and your Full Cash Value falls below what the 5% calculation would produce, the Limited Property Value is pulled down to match.3Arizona Legislature. Arizona Revised Statutes 42-13301 – Limited Property Value So the two numbers are linked: Full Cash Value is the ceiling, and the 5% rule controls everything underneath it.

New construction, major renovations, and properties that change use do not follow the 5% formula. Assessors instead calculate their Limited Property Value using a ratio that compares market values to limited values of similar properties in the area. This keeps a newly built home from getting an artificially low taxable value just because it has no prior-year baseline to grow from.

Which Value Your Tax Bill Is Calculated From

For a typical home, both primary and secondary property taxes are computed from the Limited Property Value, not the Full Cash Value.1Arizona Department of Revenue. Limited Property Value Primary taxes fund the day-to-day operations of counties, cities, school districts, and community college districts. Secondary taxes cover voter-approved debt such as school bonds and special district obligations. Both draw from the same Limited Property Value.

The county does not multiply your tax rate against the Limited Property Value directly. It first applies an assessment ratio tied to your property’s class. The result, called net assessed value, is what the tax rate is applied to. The common ratios are:

Run the numbers for a Class 3 home with a $350,000 Limited Property Value: 10% of that is a $35,000 net assessed value. The same value in Class 1 would produce $56,000. Tax rates in Arizona are expressed per $100 of net assessed value, so if the combined rate across your jurisdictions is $12.00 per $100, that Class 3 home would owe $4,200 for the year ($35,000 ÷ 100 × $12.00). Your treasurer’s statement shows your exact combined rate.

A practical consequence of this structure: a jump in your Full Cash Value does not, by itself, mean your taxes are jumping. If the Limited Property Value only moved by its 5% maximum, that is the number flowing into your bill. The Full Cash Value matters to the bill mainly if it drops below the Limited Property Value and drags it down, or if your property falls into one of the narrow categories taxed on Full Cash Value directly.

Checking and Challenging the Numbers on Your Notice

County assessors mail Notices of Value before March 1 each year for the following tax year.5Yavapai County. 2027 Notice of Value Mailout When yours arrives, three things on it decide what you’ll owe: the Full Cash Value, the Limited Property Value, and your property class. Confirm the class first. Getting put in Class 4 instead of Class 3 won’t change the valuation, but it can change the assessment ratio and the taxes that come out the other end.

If you think the Full Cash Value is higher than what the home would actually sell for, that is the figure to challenge. You cannot usefully appeal the Limited Property Value on its own, because the Limited Property Value is produced by the formula, and the only ways it moves are through the 5% rule or by being capped at the Full Cash Value. Bring the Full Cash Value down and the Limited Property Value may follow.

You file a Petition for Review of Real Property Valuation (Arizona Department of Revenue Form 82101) with your county assessor’s office within 60 days of the date on your Notice of Value.6Arizona State Board of Equalization. How to File an Appeal The petition asks for your parcel number, which is printed on the notice, and your opinion of the property’s value, which has to be backed by evidence.7Arizona Department of Revenue. Petition for Review of Real Property Valuation

Evidence is what carries the appeal. A professional appraisal done within the last 12 months is the strongest exhibit. Closing statements from recent sales of comparable homes in the neighborhood also help, especially when the comps match yours on size, age, and condition. Photographs documenting structural damage, foundation issues, or negative conditions next door such as industrial activity support an argument that your property is worth less than the assessor’s figure. If the assessor has the square footage, lot size, or room count wrong, submit documentation of the correct measurements.

The assessor must rule on all real property petitions by August 15.8Arizona Department of Revenue. Property Tax Appeals If the decision goes against you in whole or in part, you have 25 days from the mailing date to appeal to your county board of equalization or to the State Board of Equalization; in Maricopa and Pima counties, appeals go to the State Board rather than a county board.6Arizona State Board of Equalization. How to File an Appeal You may also skip the board and file directly in Arizona Tax Court within 60 days of the assessor’s decision.9Arizona Department of Revenue. The Appeals Process If you go through the board first and are still unsatisfied, you can appeal to Tax Court within 60 days of the board’s final decision or by December 15, whichever is later.10Arizona Department of Revenue. 2026 Annual Calendars of Legal Events and Assessments Miss the initial 60-day window and the administrative appeal closes for that tax year.