Understanding Property Taxes in Lake Havasu City

Understanding property taxes is crucial for homeowners in Lake Havasu City, Arizona, especially when preparing to sell a property. A clear grasp of how these taxes are calculated and their implications can aid in making informed decisions and ensuring compliance with local regulations. This guide provides a comprehensive overview of property taxes in Lake Havasu City.

1. Overview of Property Taxes in Lake Havasu City

Lake Havasu City is located in Mohave County, Arizona. The median property tax rate in the city is approximately 0.36%, which is significantly lower than both the national median of 0.99% and the Arizona state median of 0.56%. With a median home value of $405,224, the typical annual property tax bill in Lake Havasu City is around $1,363. (source)

2. How Property Taxes Are Calculated

In Arizona, property taxes are based on the Limited Property Value (LPV) of the property, which is determined by the county assessor. (source)The LPV cannot exceed the property's Full Cash Value (FCV) and is limited to increasing by no more than 5% each year, unless there are certain physical changes, changes in use, or an erroneous assessment. (source)

The calculation process involves:

• Assessment Ratio: For residential properties, Arizona applies an assessment ratio of 10% to the LPV. This means the assessed value is 10% of the LPV. ?(source)

• Tax Rate Application: The assessed value is then multiplied by the applicable tax rate to determine the annual property tax owed. (source)

Example Calculation:

If a property's LPV is $200,000:

• Assessed Value: $200,000 × 10% = $20,000

• Annual Property Tax: $20,000 × 0.36% = $72 (source)

3. Distribution of Property Tax Funds

In Lake Havasu City, property taxes fund various services:

• City Services: Approximately 6.7 cents of every dollar in general property taxes paid by property owners goes to the city. These funds help support services like police, fire departments, and parks. (source)

• Other Entities: The remaining 93.3 cents of every dollar go to public schools, the county, community colleges, and various special taxing districts.?(source)

4. Payment Schedule

Property taxes in Arizona are typically paid in two installments:

• First Installment: Due on October 1 of the current tax year and becomes past due after 5:00 p.m. on November 1. (source)

• Second Installment: Due on March 1 of the following year and becomes past due after 5:00 p.m. on May 1.?

If the total taxes are $100 or less, they become due and payable in full on October 1 and are past due after December 31. (source)

5. Implications for Sellers

For homeowners planning to sell their property in Lake Havasu City:

• Proration of Taxes: Property taxes are typically prorated at closing. This means the seller pays taxes up to the closing date, and the buyer assumes responsibility thereafter.

• Outstanding Taxes: Ensure all property taxes are current before selling. Unpaid taxes can complicate the closing process.

6. Staying Informed

Property tax rates and assessments can change annually. It's essential to stay informed about any changes that may affect your property. Regularly reviewing your property's assessed value and understanding how taxes are allocated can provide clarity and help in financial planning.

Conclusion

Understanding property taxes in Lake Havasu City is vital for homeowners, especially those considering selling their property. By comprehending how these taxes are calculated, where the funds are allocated, and the payment schedules, homeowners can navigate the selling process more effectively and avoid potential pitfalls.

If you're considering selling your property and need expert guidance on navigating property taxes and the real estate market in Lake Havasu City, contact The Gedalje Group today. Our experienced team is here to assist you every step of the way.