LANDLORD RESOURCES What you need to do in order to turn your property into a residential rental 1. Read the Arizona Landlord Tenant Act. 2. Register the property with the County Assessor. It is the law! 3. Verify whether a rental tax will be imposed on the rental income. 4. Verify whether a business license is required. 5. Consult with your tax advisor to discuss tax implications. 6. Consult with your attorney. 7. Notify your insurance company. Register Your Home as Rental Property: • Register Your Rental Property in Maricopa County • Register Your Rental Property in Pinal County Rental Property Tax Information By City Chandler The tax rate for residential rentals in Chandler is 1.5%. All real property rentals are subject to tax regardless of the number of rental units owned. Chandler links: City of Chandler Guidelines for Rental Properties Obtain a Chandler Business License Gilbert The tax rate for residential rentals in Gilbert is 1.5% (unless if you meet the exemption) Exemption: If you have only one or two residential units within the state and no commercial rentals, you are exempt from the Gilbert residential rental tax. Gilbert links: Town of Gilbert Guideline for Rental Properties Obtain a Town of Gilbert Business License Mesa The tax rate for residential rentals in Mesa is 1.75% You owe tax on a rental property if: • You have one or more non-residential rental units • You have 3 or more residential units. • You have 1 residential unit and one or more commercial units Mesa links: City of Mesa Guidelines for Rental Properties Obtain a City of Mesa Business License Phoenix The tax rate for residential rentals in Phoenix is 1.3% You owe tax on a rental property if: • You have three or more residential units rented or available for rent in the State of Arizona • You have one unit of commercial property for rent plus one or more units of residential property available for rent in the State of Arizona Phoenix links: City of Phoenix Guidelines for Rental Properties Obtain a City of Phoenix Business License Queen Creek The tax rate for residential rentals in Queen Creek is 2.25% You owe tax on a rental property if: you have three or more residential units rented or available for rent in the State of Arizona Queen Creek links: Town of Queen Creek Guidelines for Rental Properties Obtain a Town of Queen Creek Business License Scottsdale The tax rate for residential rentals in the City of Scottsdale is 1.65% You owe tax on a rental property if: • You have a residential rental property in Scottsdale and more than two rental residential properties in the State • You have one or more commercial property units available for rent in the State, then all residential rental property located in the City is subject to the City tax Scottsdale links: City of Scottsdale Guidelines for Rental Properties Obtain a City of Scottsdale Business License Good Terms to Know: Transaction Privilege Tax - Privilege tax is often passed on to the business' customers as "sales tax". However, this is a tax on the privilege of doing business and is not a true sales tax. Transactions between related companies or persons are taxable. Use Tax - Use Tax is a tax on tangible personal property which is purchased or leased for storage or use in the City on which tax was not paid at the time of purchase or rental. The use tax protects local vendors because it removes incentives for customers to shop outside of the city or state to avoid paying the city sales tax. Real Property - Real property is defined as land and any permanent structures attached to it. Some examples of real property are: • Houses • Office Buildings • Vacant Land • Gas Stations • Motels • Shopping Centers • Farms • Apartment Buildings • Factories • Restaurants • Manufactured Housing • Saleable Natural Resources (Oil, Gas, Timber) Residential Unit – A unit is one real property location rented to one tenant. For example a three-story office building rented to one law firm is one unit. On the other hand, if you rent three offices in a medical office building to three separate physicians, each office is one unit. Return to top Aimee Burrell, CLHMS, CRS, GRI Realtor® 480.216.2644 Jeff Tipton, ABR, CRS, GRI Associate Broker 480.216.9966 RE/MAX POWER REALTY 7529 S. Power Road Suite 101 Queen Creek, AZ 85242 (480) 850-5858 Each Office Independently Owned and Operated

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