Arizona

Arizona has no state real estate transfer tax, one of a handful of states without one. Closings are handled by escrow companies (the title and escrow function are usually combined in a single company), with attorneys involved on a case-by-case basis rather than by default. Arizona is not an attorney-required state for residential closings.

The escrow company is the central professional. They draft closing documents, hold funds, coordinate with the lender, and record the deed. The closing process is typically straightforward and well-documented, reflecting Arizona's substantial volume of routine residential transactions in metro Phoenix and Tucson.

What property taxes look like

Arizona uses a two-tier assessment structure: the Limited Property Value (LPV) is what's actually used to compute taxes, and it's capped at 5% annual growth for primary residences (independent of how fast market value moves). The Full Cash Value (FCV) tracks current market value and is used for some bond-rate calculations but not the primary tax bill.

Effective property tax rates in Arizona are relatively low by national standards (typically 0.6%–0.9% in most counties) with the LPV cap providing meaningful stability for long-term owners.

The primary residence (Class 3) classification itself produces a meaningful rate reduction compared to non-primary properties (Class 4 (second homes, rentals) pay higher rates). New owners need to ensure the county assessor has recorded the primary-residence status; this is sometimes automatic when deeds reference primary residence, sometimes requires a separate filing. Both Maricopa and Pima counties have online forms.

The state homeowner rebate (also called the school district education tax credit, applied automatically) reduces the school-district portion of property taxes for primary residences. There's no equivalent of a Florida-style large lump-sum homestead exemption, the AZ structure produces its tax savings through the classification system rather than a flat exemption amount.

What buyers should know

The standard Arizona residential purchase contract (the AAR form, published by the Arizona Association of Realtors) is widely used and includes well-defined contingency periods: typically 10 days for inspection, with the financing and appraisal contingencies running through close.

Earnest money is typically 1%–2% of purchase price, held by the escrow company. Title insurance is not state-promulgated in AZ; premiums vary by insurer. Both lender's and owner's policies are customary, with the seller often paying for the owner's policy in southern Arizona and the buyer paying in northern Arizona, a regional split similar to California.

Without a state transfer tax, the buyer's closing-cost stack is dominated by lender fees, title insurance, and prepaids. The all-in buyer closing costs in Arizona typically run 2%–3.5% of home price, lower than in transfer-tax states.

What sellers should know

Sellers face no state-level transfer tax, the seller's closing costs are dominated by agent commissions (subject to post-2024 NAR settlement variability), the owner's title insurance premium (where seller-paid is the local custom), the escrow company fee, and any seller concessions. The full-stack seller closing costs typically run 6%–8% of sale price.

Required disclosures include the Seller's Property Disclosure Statement (the AAR-published form), covering known material defects, environmental conditions, and HOA matters. As-is sales don't waive the disclosure requirement.

Arizona state cap-gains tax is a flat 2.5% (recently flattened from a graduated structure). Sellers with significant gains above the federal § 121 exclusion pay federal LTCG + 2.5% AZ + 3.8% NIIT (for high earners), combined effective rates in the 21%–26% range, among the lower combined rates in the country.

How closing typically works

Closings in Arizona happen at the escrow company, with documents sometimes signed remotely via mobile notary. The buyer signs loan documents and the deed of trust; the seller signs the deed and disclosures; funds wire; the deed records at the county recorder. The full process is often shorter than in attorney-state closings, 30–45 minutes is common.

For complex transactions, contract disputes, or party-specific representation, an Arizona-licensed real estate attorney can review the relevant documents. For routine residential closings, the escrow company handles the closing without attorney involvement on either side. The Arizona Department of Real Estate handles broker and salesperson licensing complaints; the Department of Insurance and Financial Institutions handles title-insurance complaints.