Does Arizona have a real estate transfer tax?
No. Arizona doesn’t charge a transfer tax, deed tax, documentary stamp or excise tax when real estate is sold, and neither do its counties or cities. The only government charges on an Arizona deed are the county recording fee and the paperwork that comes with it.
That’s not just a policy choice that could change with the next budget. It’s written into the state constitution, which makes Arizona one of the most dependable no-transfer-tax states for investors who plan to hold, sell and buy again.
Why Arizona can’t add a transfer tax
Arizona voters approved Proposition 100 in November 2008, which added Article IX, Section 24 to the Arizona Constitution. It says the state, counties, cities, towns and other taxing districts shall not impose any new tax, fee, stamp requirement or other assessment on transactions that sell or transfer an interest in real property, whether direct or indirect.
The ban covers anything not already in effect on December 31, 2007. In practice, that freezes Arizona at zero. A city can’t pass a mansion tax like Los Angeles’s Measure ULA, and the Legislature can’t add a deed stamp without another constitutional amendment approved by voters.
For a seller, that certainty is worth something. A buyer underwriting a 10-year hold in Arizona doesn’t have to model a transfer tax on their own exit, which supports the price they can pay you today.
The affidavit of property value
Instead of a tax return, Arizona requires an Affidavit of Property Value with most deeds. Under A.R.S. § 11-1133, it’s an affidavit of the seller and the buyer, or the agent of either or both, and it must be attached when the deed or sale contract is recorded.
The county recorder must refuse to record a deed that doesn’t have a complete affidavit, unless the deed notes a specific exemption under A.R.S. § 11-1134. Your escrow company normally prepares the form from the purchase contract and has both sides sign it before closing.
The affidavit reports the sale price, the property type and how the purchase was financed. County assessors use that information as sales evidence, so the price you get becomes part of the data that drives future values in your area.
Check that the price on the affidavit matches the purchase contract and the closing statement. It’s the figure the assessor will see, and a mismatch is the kind of detail that holds up recording on closing day.
What it costs to record a deed in Arizona
Arizona uses flat recording fees. In Maricopa County, the recorder charges $30 for any document except plats and surveys, under A.R.S. § 11-475(A)(1), whether it’s a 2-page deed or a 20-page deed of trust. Government agencies pay $15.
So the recording cost on a typical apartment sale is $30 for the deed, plus $30 for the buyer’s deed of trust if they finance. Other counties set their schedules under the same statute, so check the recorder’s fee page for Pima, Pinal or wherever your property sits.
Who pays closing costs in an Arizona sale?
With no transfer tax, an Arizona closing statement mostly shows escrow fees, title insurance, recording fees, prorations and loan payoffs. The purchase contract allocates each one, and on commercial and apartment deals they’re open to negotiation.
Sellers should watch the owner’s title policy, the escrow fee split and any prepayment penalty or defeasance on their loan. On a $5 million sale, those items can run into the tens of thousands, while the government’s share stays at the recording fee.
LLC transfers and other exempt deeds in Arizona
Moving a building into your own LLC costs nothing in transfer tax, because there isn’t one. What changes is the affidavit. A.R.S. § 11-1134 exempts certain deeds from the affidavit and its fee, and the deed must state which exemption applies when it’s recorded.
- Transfers for no or nominal consideration between related entities, between an LLC and its members, between a partnership and its partners, within a joint venture, or between a trust and its trustee.
- Deeds of gift, and quitclaim deeds to quiet title or with no monetary consideration.
- Transfers that secure a debt, including trustee’s deeds.
- Court-ordered conveyances, tax sales, partitions and mergers.
- Corrections of earlier deeds, beneficiary deeds for nominal consideration and transfers to combine or split parcels.
Entity sales, foreclosures and 1031 exchanges
Selling the LLC that owns your building, rather than the building, doesn’t change your transfer tax in Arizona, which is zero either way. Some states tax a sale of a controlling interest in an entity as if a deed were recorded. Arizona’s constitutional ban reaches indirect taxes on transfers too, so there’s no state or local controlling-interest tax to plan around.
Trustee’s deeds after a foreclosure are on the affidavit exemption list, and they owe no transfer tax. A 1031 exchange also owes none on either leg, but if your replacement property is in a state that does tax transfers, that state’s tax still applies to the new deed.
Worked example: a $2M and $5M Arizona apartment sale
Take a 28-unit building in Mesa selling for $2,000,000. Arizona transfer tax is $0. The Maricopa County recorder charges $30 for the deed, and the affidavit goes in with it. If the buyer finances, their deed of trust costs another $30.
At $5,000,000, the Arizona numbers don’t change: $0 in transfer tax and $30 to record the deed.
Compare a sale in Las Vegas, where Clark County’s real property transfer tax is $2.55 per $500. A $2,000,000 sale owes $10,200 and a $5,000,000 sale owes $25,500. In the City of Los Angeles, the county tax of $1.10 per $1,000 plus the city’s $2.25 per $500 comes to $11,200 at $2,000,000 and $28,000 at $5,000,000, below the city’s Measure ULA thresholds.
Put another way, the Mesa owner keeps $10,000 to $28,000 that the same sale would cost in Las Vegas or Los Angeles. The buyer doesn’t pay a deed tax either, which leaves more of their budget for the price itself.
| Sale price | Arizona | Clark County, NV | City of Los Angeles, CA |
|---|---|---|---|
| $2,000,000 | $0 | $10,200 | $11,200 |
| $5,000,000 | $0 | $25,500 | $28,000 |
Arizona compared with neighboring states
Arizona has the lowest transfer cost of the Southwest’s big markets. California charges a county tax of 0.11% plus city taxes in many places, Nevada’s Clark County charges 0.51%, and Colorado charges a documentary fee of one cent per $100. New Mexico and Utah, like Arizona, have no state transfer tax.
Arizona investors who trade into California or Nevada should budget the other state’s tax into the replacement purchase. It catches many sellers off guard after years of paying nothing in Arizona.
| State | Transfer tax | As a percentage |
|---|---|---|
| Arizona | None (constitutional ban) | 0% |
| California | $1.10 per $1,000 county tax, plus city taxes | 0.11% and up |
| Nevada (Clark County) | $2.55 per $500 | 0.51% |
| Colorado | $0.01 per $100 documentary fee | 0.01% |
| New Mexico | None | 0% |
| Utah | None | 0% |
How Arizona taxes your sale instead
The tax that matters in Arizona is income tax on the gain. Arizona taxes individual income, including capital gains, at a flat 2.5%, which is low by national standards. Federal tax is the larger bill, with long-term gains taxed at up to 20%, depreciation recapture at up to 25% and the 3.8% net investment income tax on many sellers.
A 1031 exchange can defer both the federal and the Arizona tax, and an installment sale or seller financing can spread the gain over several years. Have your CPA model each option, because the structure you pick affects how the purchase agreement is written.
Rental tax changes Arizona apartment owners should know
Arizona cities lost the right to tax residential rents on January 1, 2025. Senate Bill 1131, enacted in 2023, added A.R.S. § 42-6004(H), which bars cities, towns and other taxing jurisdictions from levying a transaction privilege tax on renting real property for residential purposes after December 31, 2024. Hotels and other transient lodging are excluded from the ban.
Landlords who had been passing the tax through to tenants had to stop by January 1, 2025. If you’re selling, make sure your rent roll and operating statements show rents without the old city tax, so a buyer isn’t confused by a drop in collections that’s really just the tax going away.
Selling your Arizona apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units across Arizona, including Phoenix, Mesa, Tempe, Tucson and the West Valley. We buy directly, can offer seller-carry terms and can close inside 1031 exchange deadlines.
Send us the property address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and our offer states which closing costs each side pays.
