By Alejandra Paladino, REALTOR® with eXp Realty | azalejandra.com
If you're moving from California to Arizona, the property tax difference is one of the most concrete, dollar-for-dollar financial wins you're going to get. I see California buyers underestimate this all the time. They know Arizona is "cheaper" but they don't realize just how different the annual tax bill actually is — and how that difference compounds over the years you own the home.
Let's get into the real numbers.
Buying a home in Arizona and want to know what your actual tax bill will look like? Fill out my buyer form at bit.ly/BuyAZhome and I'll walk you through the real costs for any home you're considering.
The Basic Rates
Arizona effective property tax rate: approximately 0.52% of home value
California effective property tax rate: approximately 0.71% of home value
Those numbers look close. They're not, for two reasons.
First, the dollar difference on actual home values is significant. Second and this is the part most California buyers don't think about California's property tax situation is more complicated than that 0.71% number suggests. That average includes long-term homeowners who bought decades ago and are paying on a much lower assessed value under Prop 13. If you are buying a home in California today, you are starting fresh at today's purchase price with today's full rate. New buyers in California are not paying 0.71% they're often paying 1.1% to 1.3% or more when you factor in Mello-Roos and special assessments.
What California Buyers Are Actually Paying
Proposition 13 caps California property taxes at 1% of assessed value. That sounds reasonable. Here's the catch.
When you buy a home in California, your assessed value resets to your purchase price. Every year after that, it can increase up to 2% annually but you start at 100% of what you paid. And on top of the 1% base rate, most California counties layer on additional voter-approved assessments. These include Mello-Roos fees (for infrastructure in newer developments), school bonds, fire district assessments, and other special taxes. These are not subject to Prop 13's cap, and they can be substantial.
In practice, new homebuyers in many California counties end up with an effective total rate of 1.1% to 1.3% of purchase price sometimes higher in newer developments with active Mello-Roos.
Here's what that looks like in real dollars on a home purchased today:
$600,000 home in California (at 1.2% effective rate): $7,200 per year / $600 per month
$700,000 home in California (at 1.2% effective rate): $8,400 per year / $700 per month
$800,000 home in California (at 1.2% effective rate): $9,600 per year / $800 per month
$1,000,000 home in California (at 1.2% effective rate): $12,000 per year / $1,000 per month
What Arizona Buyers Actually Pay
Arizona's system works differently. The state assesses residential properties and applies Maricopa County's effective rate, which runs approximately 0.68% for primary residences. Arizona also has Proposition 117, which caps annual increases in your home's assessed value at 5% per year protecting you from dramatic tax spikes even in hot markets.
There's no Mello-Roos equivalent in Arizona. New construction communities do sometimes have community facilities district (CFD) fees or HOA-funded infrastructure, but these are generally much smaller than California Mello-Roos assessments and are often disclosed upfront in the purchase.
Here's what the same home values look like in Arizona:
$500,000 home in Arizona (at 0.68% in Maricopa County): $3,400 per year / $283 per month
$600,000 home in Arizona (at 0.68%): $4,080 per year / $340 per month
$700,000 home in Arizona (at 0.68%): $4,760 per year / $397 per month
$800,000 home in Arizona (at 0.68%): $5,440 per year / $453 per month
The Side-by-Side Comparison
$600,000 home:
California: ~$7,200/year
Arizona: ~$4,080/year
Annual savings: ~$3,120
$700,000 home:
California: ~$8,400/year
Arizona: ~$4,760/year
Annual savings: ~$3,640
$800,000 home:
California: ~$9,600/year
Arizona: ~$5,440/year
Annual savings: ~$4,160
Over 10 years at $700K:
California: ~$84,000
Arizona: ~$47,600
Total savings: ~$36,400
And remember this is just property taxes. This doesn't include the income tax difference (Arizona flat 2.5% vs. California up to 13.3%), the lower cost of homeowners insurance in most Arizona markets, or the fact that your dollar buys significantly more house in Arizona to begin with.
The Real Estate Math for California Buyers
Say you're selling a home in Orange County for $950,000. You clear $400,000 after paying off your mortgage. You move to Queen Creek and buy a brand-new 2,800 sq ft home for $650,000. You put 20% down ($130,000) and finance $520,000.
Your new annual property tax bill: approximately $4,420 per year.
Your California tax bill would have been, on a $950,000 home: approximately $11,400 per year.
Annual savings on property taxes alone: approximately $6,980.
Now add the income tax savings if you're a W-2 earner making $150,000: roughly $6,213 per year based on the difference between Arizona's 2.5% flat rate and California's progressive brackets.
Combined annual tax savings: roughly $13,000+.
That's not a rounding error. That's a car payment, a family vacation, or an extra mortgage paydown every single year.
What to Watch For in Arizona
Your property is assessed annually by the county assessor. The "full cash value" is their estimate of market value, but taxes are calculated on the "limited property value," which is the Prop 117-protected figure that can only grow 5% per year. In a rising market, this means your tax bill grows slowly even when home values spike.
New construction homes will sometimes be assessed lower in the first year and then catch up as the assessor updates to full market value. This means your first year's tax bill may be lower than subsequent years. Ask your REALTOR® to get the updated assessed value estimate, not just the first-year bill.
Some master-planned communities in the East Valley do have CFD (Community Facilities District) bonds that add a line item to your annual tax bill. These are disclosed at closing and are typically in the $300–$1,200 per year range significantly less than California Mello-Roos fees, which can run $3,000–$6,000+ per year.
The Bottom Line
If you bought a home in California years ago and you're sitting on Prop 13 protection, you're probably paying a much lower effective rate than the numbers above. Moving to Arizona means giving that up and starting fresh — but starting fresh in Arizona means starting at a much lower baseline than starting fresh in California.
For anyone buying in California today paying today's prices at today's rates with today's Mello-Roos the property tax argument for Arizona is decisive. You will pay meaningfully less every single year, on a larger and newer home, with no Mello-Roos surprises.
I've made this move myself. I moved from California to the East Valley over a decade ago and I've never looked back. If you want to see exactly what the numbers look like for a specific home you're considering, fill out my buyer form at bit.ly/BuyAZhome and let's run the real comparison.
Want to see what your monthly payment including taxes, insurance, and HOA would actually look like on an Arizona home?
I'll put together a side-by-side of your California cost of ownership vs. what you'd pay here. Book a call at zoomtoarizona.com or fill out my form at bit.ly/BuyAZhome.
Alejandra Paladino is a REALTOR® with eXp Realty specializing in California-to-Arizona relocation. She moved from California to the East Valley over a decade ago and helps buyers navigate the move every day.
Follow her on Instagram @moving2arizona
or visit azalejandra.com
Direct: 480.382.0519 | Alejandra@azalejandra.com | Book a call: zoomtoarizona.com