The repeal of the regressive rental tax went into effect in dozens of local municipalities across the state on January 1, 2025. Affordable housing remains top-of-mind for many Arizonans and this harmful tax would further decrease housing affordability, especially for lower income families and individuals. The Arizona REALTORS® was adamantly against this tax and fought for its repeal in 2023. Incredibly, only two states, Hawaii and Arizona, still imposed this tax as it is widely recognized that doing so causes more harm than good. There were 75 different municipalities that imposed this tax across the state, meaning renters in more than 80% of Arizona cities suffered from this regressive system. The Arizona REALTORS® is thankful that the Legislature realized the burden of this tax and worked tirelessly for its eventual repeal.Tim Beaubien
Our state’s housing market has been marked by limited supply and rising prices over the last several years. In August of 2023 when the governor signed the rental tax repeal into law, median rent in the Phoenix metro area had risen $595 from four years prior, according to data from Rent.com. Varying residential transaction privilege tax rates across the Valley added anywhere from $100-$250 a year on top of that 38% rent increase. For example, the current median rent in the Phoenix metro area is $2,179, potentially costing renters up to an additional $900 a year on residential transaction privilege tax.
While Arizona has done a great job attracting new jobs and companies to the Grand Canyon State, this, too, has created housing challenges. As our population increases because of this economic growth, it is critically important that housing remains affordable to sustain these new workers and families who choose to make Arizona their home.
The obvious solution is increasing supply to match the demand caused by our population increase, but this does not happen overnight. In the meantime, while our state and local government officials work to get more shovels in the ground, we must battle the rising housing costs in other ways. The truth is inflation is hitting all aspects of daily life. Families are spending more money at the grocery store, at the gas pump, and on utilities. The repeal of the rental tax puts dol …
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