New Investor here, who just purchased a SFR in Mesa, AZ. I was reading online about a residential rental property tax (about 2% of gross income) and I was wondering if anyone has any experience with this? How are the fees paid, when are they paid, are they only paid for occupied months, etc.?
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
5y
If you are the Owner and this is your only rental you do not need to register or pay TPT taxes. I believe individual Owners can have 2 or maybe 3 before they need to comply with TPT Taxes. Or if you turn it over to a Professional Property Manager, they will be required to register and pay TPT Taxes.
TPT is (about) 2% tax on all rents and fees collected from the tenant (except Security Deposit). The percentage varies per city.
You are still required to register the property as a rental with Maricopa County, if they find out you have a rental that is not registered as a rental the fines are assessed daily until you get it registered.
@Dick Rosen Thank you for the reply. You are exactly correct, as I just spoke with someone from the Mesa tax office. I have already registered the property as a rental through the Maricopa County Assessor.
Real Estate Agent · Phoenix, AZ · Member since 2012 · 640 posts · 457 votes
5y
@Kerns Churchill the taxes are now paid through AZDOR rather than through each individual municipality. Check the AZDOR tax matrix to see if you are liable to pay taxes (it varies by city and number of rentals owned)
Rental Property Investor · Long Beach, CA · Member since 2020 · 31 posts · 5 votes
5y
@Ryan Swan Thanks for this. I have a property in Glendale that I picked up last September and one in Scottsdale as of March 2021, and both had different requirements and taxes. The former requires TPT to be paid with even just one property if it is being used as a rental. The tax is 2.2%. The latter does not require it until you hit 3 properties or more in AZ. I’m actively looking for a third, so I’ll be passing the 1.75% on to my tenant in Scottsdale when the time comes. Thankfully, it’s defaulted verbiage in the AAR lease contract.