ARIZONA RESIDENTIAL RENTAL INCOME TRANSACTION PRIVILEGE TAX (TPT) RATES BY CITY
There is no State of Arizona or County Transaction Privilege Taxes (TPT) a.k.a. Arizona Sales Tax on residential rental property income with 30 or more days of occupancy. But municipalities have taxing authority to levy TPT. The list below shows TPT tax rates metro Phoenix rental property owners will pay to local municipalities in the Phoenix East Valley.
Short Term residential rentals of less than 30 days are required to pay the same Transaction Privilege Tax (TPT) Transient Lodging Rates as motel and hotel businesses pay. For complete details about Arizona Department of Revenue tax rate structure, go to https://www.azdor.gov for complete details.
WHO PAYS TRANSACTION PRIVILEGE TAX (TPT) ON RESIDENTIAL INCOME
Phoenix investors who are a lessor/owner of the Arizona residential rental property are required to pay TPT when the rental property is within the city limits of a municipality that levies TPT.
If the Phoenix real estate investor has not hired a property manager to manage their property and collect and remit TPT, then the lessor/owner will have to apply for a license and pay the annual fees to be able to administer TPT payments they owe. For more details please visit: https://www.azdor.gov/TransactionPrivilegeTax(TPT).aspx
In a weak Phoenix rental market where there are more residential rental properties for rent than renters, the rent charged would probably include the transaction privilege tax (TPT) the Phoenix investor lessor/owner is required to pay. In a stronger rental market, like the rental market we are experiencing now, it is not unusual for the total monthly fee to be the quoted monthly rent plus a separate fee for the transaction privilege tax (TPT) and an administrative fee for the property manager to collect and pay TPT on behalf of the lessor/owner. Good luck finding a Phoenix rental property you want to rent without the lessor/owner/property manager charging TPT separately from the quoted rent. Just chalk it up to the cost of renting and snap up the home you want to rent before someone else gets it.
TRANSACTION PRIVILEGE TAX (TPT) RATES FOR LEASE TERMS > 30 DAYS
CITY OF CHANDLER, ARIZONA – 1.5% of the gross rent for each Chandler residential rental property
TOWN OF GILBERT, ARIZONA – 1.5% of the gross rent for each Gilbert residential rental property
CITY OF MESA, ARIZONA – 1.75% of the gross rent for each Mesa residential rental property
CITY OF TEMPE, ARIZONA – 1.8% of the gross rent for each Tempe residential rental property
CITY OF PHOENIX, ARIZONA – 2.3% of the gross rent for each Phoenix residential rental property
CITY OF SCOTTSDALE, ARIZONA – Scottsdale exempts up to two Scottsdale residential rental properties, providing the lessor/owner does not own rental properties elsewhere in Arizona. Lessor/owners that have rental property in Scottsdale and have more than two rental properties in the Arizona are subject to 1.65% TPT rate on all Scottsdale residential rental property income. If the lessor/owner has a commercial rental property anywhere in Arizona, all Scottsdale residential rental property income is subject to the 1.65% TPT.
Author: Sam Elam,
Arizona Associate Broker, CRS, GRI, e-PRO, SFR
Berkshire Hathaway HomeServices | Arizona Properties
Sam has over 25 years of full time real estate experience assisting buyers who are purchasing homes for sale in Gilbert, Mesa, Chandler, Phoenix, Scottsdale, Queen Creek and San Tan Valley and AZ for retirement or investment.
Call: (480) 213-1799 or email: firstname.lastname@example.org
Contact Sam to discuss your Arizona home purchase plans and schedule an appointment to see how he can help make your plans become a reality.