Arizona renters set to pay less with tax elimination in 2025
PHOENIX (AZFamily) — Renters across Arizona will soon save some extra monthly cash as the state eliminates the Transaction Privilege Tax (TPT), which was added to rent payments every month.
The tax rates vary by city. In Phoenix the rate is 2.3%, Mesa is 2%, and Cave Creek is 3%. Some other municipalities are set at 4%.
Local Republicans set out to eliminate the rental tax to help people with the rising costs of living, but some experts worry the tax cut won’t make a long-lasting change for affordability.
Jake Beeson provides affordable housing in the Valley and said every dollar counts for families living paycheck-to-paycheck.
“It’s going to mean quite a bit for some tenants,” Beeson said. “We work with the Community Housing Partnership as one of our clients, which has low-income housing, and those rents are between $900 and 1,000 a month. So for a low-income family to have a 2% discount every month doesn’t sound like a lot, but if you’re paying $900 in rent every month, that’s $18. $18 is a whole month of discounted lunches at your kid’s school.”
Not everyone is for removing this tax.
The League of Arizona Cities and Towns released a statement to Arizona’s Family saying this will take away from essential funding sources for local governments.
Cities and towns across the state are facing a loss of over $230 million in their budgets, which support essential services like police, fire, parks, and more. Without state funding to make up for these losses, local governments will be forced to make tough decisions to balance their budgets, such as cutting jobs and services or raising local taxes—both unpopular choices. Local leaders are working to address these challenges before the repeal takes effect in January.
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