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Last Chance Approaching for Arizona Property Tax Relief for 2012

Tax Law Update

For real property valued by a county assessor, December 15, 2011 is generally the last day to appeal the property tax valuation for tax year 2012. This final opportunity to appeal a 2012 valuation is initiated by filing a notice of appeal with the Arizona Tax Court.

The December 15 deadline applies where the property owner has not filed a petition for review with the county assessor for 2012. In cases where the owner has filed a petition for review with the Maricopa County Assessor, the last day to appeal the outcome of the petition is 60 days from the most recent administrative decision on the petition. In other Arizona counties, the owner has until December 15 or 60 days from the most recent administrative decision, whichever is later, to appeal in tax court.

A new owner of real property may also have an opportunity to appeal the county assessor's valuation for tax year 2011. The right to appeal the 2011 valuation applies to an owner who acquired the property after December 15, 2010 and applies provided that prior owners of the property have not appealed the 2011 valuation in tax court.

Where a valuation appeal results in a reduction, the adjusted valuation for the tax year under appeal "rolls over" to and applies for the next tax year. Tax savings for two years may thus result from appealing one tax year. In addition, property owners prevailing in a property tax appeal are entitled to an award of attorney fees up to $30,000 at each level of judicial appeal, i.e., $30,000 for the proceeding in the Arizona Tax Court, another $30,000 if the case is appealed to the Arizona Court of Appeals and another $30,000 if the Arizona Supreme Court grants review.

For many categories of real property, the property's valuation is its market value. Market value is ascertained by using standard appraisal methods and techniques. Accepted approaches to value are reproduction cost, capitalization of income and comparable sales. The county assessors generally rely on depreciated replacement cost as their starting point for market value, and their market adjustments to their cost model may not always result in valuations reflecting market value based on income, comparable sales or a sale of the property.

Quarles & Brady's state and local tax attorneys routinely advise clients about property tax provisions and represent property owners at all stages of administrative and judicial appeals of valuation and/or classification in several states. If you have questions regarding property taxes or need assistance in identifying opportunities for significant property tax relief, please contact Mark Vilaboy at (602) 229-5508 / mark.vilaboy@quarles.com or your local Quarles & Brady attorney.