An Overview
The Pima County Assessor's Office is responsible for locating, listing, and valuing all of the properties under its jurisdiction that are to be listed on the assessment rolls. This includes both real and personal property.
The Assessor does not create the value. People make the value by the decisions they make in the marketplace. The Assessor has the legal responsibility to study those transactions and appraise property accordingly: "Determine the full cash value of all such property as of January 1 of the next year by using the manuals furnished and procedures prescribed by the department [of revenue]." (A.R.S. § 42-13051)
Analyzing data, establishing values, issuing notices to owners, and providing for two appeal periods takes time. In fact, a given "assessment year" isn't a year at all. It is actually much longer—especially for residential values. Click here to see the residential valuation timeline in a visual form.
As you can see, the bulk of the time is taken up with sales affidavit collection. These sales are analyzed for economic and neighborhood trends using a technique called Multiple Regression Analysis. Multiple regression explores and quantifies the relationship between known sales prices and property characteristics to predict a value. That value appears as the full cash value on the notice of valuation card mailed in February.
However, Arizona is unique in that it uses two types of property values for taxing purposes. The aforementioned full cash value is the value placed on the property by the Assessor. The limited value is determined by applying a statutory formula for a specific tax year (A.R.S. § 42-13301). Limited value may increase by either 10% of the previous year's value, or 25% of the difference between the current year's secondary value and previous year's limited value, whichever is greater. In no event should the limited value exceed the full cash value.
The assessed value is derived by multiplying the full cash value and the limited value by the assessment ratio. To calculate the tax, the assessed value divided by 100 and multiplied by the tax rate.
The assessed value derived from the limited value is the basis for computing primary taxes for the maintenance and operation of school districts, cities, community college districts, counties, and the state. The assessed value derived from the full cash value is the basis for computing secondary taxes for bonds, budget overrides, and special districts, such as fire, flood control, and other limited purpose districts.
The following seven steps describe the Assessment Process:
- Locate and identify all property in the county.
- List all properties, with a description of quantity, quality, and significant characteristics.
- Determine the full cash value of each taxable property.
- Determine the taxability of each property by legal class.
- Calculate limited property value and the assessed value, as defined by statute.
- Maintain an up-to-date ownership list of all property.
- Notify property owners of the proposed full cash and limited property valuations.
- Maintain and apply exemption and senior property freeze applications.
- Prepare and convey the assessment roll to the board of supervisors.
More About Determining Full Cash Value
There are three methods of appraising or establishing the full cash value of property:
Market Approach
The Market Approach, also known as the sales comparison method, compares property to other similar properties that have sold. Our office uses the previous three years of sales for all properties that the sales comparison approach can be utilized. Recent market transactions are analyzed for a given location and then property values are determined, based on those transactions. Sales prices determine values for individual characteristics (like a pool or a garage), which are then applied to all of the properties in that particular area.
Cost Approach
When there are not enough sales for a type of property to be properly valued using the Market Approach, there is the Cost Approach. In this approach, the replacement cost (minus depreciation) is determined based on how much it would take at today's material and labor costs to replace the existing structure. Then the value of the land is added to arrive at the value for the property. Some properties are valued statutorily or overridden based on market sales; some are modeled.
Income Approach
For rental and leasing property, the Income Approach is sometimes used. This method utilizes the capitalization of the property's net income to determine its value.
For a more detailed explanation of the valuation of various types of property, please view the information for each type.
Assessment Ratio and Assessed Value
In addition to determining the value, the Assessor must identify the appropriate legal class to be applied to the property. The legal class ratios are used to calculate the assessed values of the property. The following are the most common legal classes, property uses, and their assessment ratios:
Legal
Class |
Property
Use |
Tax
Year |
Assessment
Ratio |
1 |
Commercial and Industrial (A.R.S. § 42-15001) |
1980 to 2005
2006
2007
2008
2009
2010
2011 |
25.0%
24.5%
24.0%
23.0%
22.0%
21.0%
20.0% |
2 |
Vacant and all other property not included in other legal classes (A.R.S. § 42-15002) |
All |
16.0% |
3 |
Owner-occupied residential (A.R.S. § 42-15003) |
All |
10.0% |
4 |
Rental residential (A.R.S. § 42-15004) |
All |
10.0% |
To calculate the Assessed Values:
Limited Assessed Value = Limited Value × Assessment Ratio
The Limited Assessed Value is used by the clerk of the board to calculate Primary Taxes. |
Assessed Value = Full Cash Value × Assessment Ratio
The Assessed Value is used by the clerk of the board to calculate Secondary Taxes. |
Notification and Appeals
The Assessor is required to notify the owner of record with a Notice of Valuation on or before March 1. This is sent via mail to the last known address. If the property owner feels that their property has been improperly valued or erroneously listed, they may petition the Assessor for review of the property. This must be done within 60 days of the notice date, found on the front of the card. More information on this can be found on the Appeals Process page.
The Assessment Roll
Once a year, the Assessor prepares the assessment roll for conveyance to the board of supervisors. The board prepares the abstracts of value. These abstracts are sent to the various taxing jurisdictions. The finance departments of the jurisdictions use the abstracts (along with the jurisdiction's budget) to determine their tax rate.
On the third Monday in August, the board of supervisors approves the the tax rates sent from the taxing jurisdiction. Then the board orders the clerk to "extend" the roll, thus transforming the assessment roll into the tax roll. The tax roll will be used to create the tax bills. Afterward, the tax roll is conveyed to the treasurer for collection.
To recap:
The statutes and reference to the Arizona Constitution above are shown as examples of the points listed. To review all the laws and regulations governing the assessment process in detail, please consult: