The national Tea Party has found its way to Arizona.
Prop 13 Arizona, a citizen's initiative to limit property taxes, has been filed with the Arizona Secretary of State.
Arizona has the most complicated and complex property tax laws in the nation with few property owners understanding how their assessed value or tax bill was calculated, whether it is accurate or fair.
The current tax system has the government completely in charge. Taxing districts decide how much they want to spend, calculate your portion of it and send you the bill. Prop 13 Arizona changes the balance of power and limits how much you can be taxed.
Modeled after California's successful Proposition 13, the initiative rolls back valuations to 2003 full cash value for properties purchased before January 1, 2004, and actual purchase price for properties purchased after that date. It caps total tax at 0.5% for all residential property and 1% for all other real property, limits valuation increases to 2% per year, and eliminates overrides and exceptions to the tax cap.
Property owners will experience tax savings primarily through reductions in the tax rate. Those who bought at that top of the market will see immediate tax savings via the tax rate reduction. In the future, they will experience additional savings from the 2% annual cap on valuation increases. Currently, there is no limit on the annual increase in full cash value or the secondary taxes associated with the assessed full cash value.
Like Prop 13 in California, Prop 13 Arizona transitions Arizona to a purchase-price based system. It eliminates subjective and unfair valuations and the need for assessment appeals. The formula is easy to understand and easy to calculate. Buyers will know their tax obligation for as long as they own the property with no surprises. If they can keep up with a maximum 2% increase per year, they will never be taxed out of their home.
The initiative was kept as close as possible to California's Proposition 13, since it has survived constitutional challenges all the way to the US Supreme Court, where it was upheld in 1992.
Details of the initiative can be found at www.Prop13Arizona.com