In the state of Arizona, the term Limited Property Value refers to the valuation of a property for tax purposes. It is used as the basis for calculating property taxes by the county assessor’s office.
Limited Property Value (LPV) is determined by the county assessor when establishing tax valuations. It is the lower of two values: the Full Cash Value or the Limited Property Value.
The Full Cash Value is the estimated market value of the property and fluctuates based on market conditions. The Limited Property Value, on the other hand, is a capped value that limits the annual increase in assessed value for property tax purposes.
The Limited Property Value is determined by taking the Full Cash Value and applying limitations set forth by Arizona law. The increase in Limited Property Value is capped at 5% per year for properties that have had no additions or other improvements. For properties with additions or improvements, the Limited Property Value may increase by a maximum of 10% per year. This ensures that property taxes remain predictable and do not increase excessively over time.
It is important to note that the Limited Property Value is not the same as the property’s market value. The Limited Property Value is used solely for the purpose of calculating property taxes and may not accurately reflect the current market value of the property.
What is the difference between Full Cash Value and Limited Property Value?
Full Cash Value is the estimated market value of a property, while Limited Property Value is a capped value that determines property taxes.
How is Limited Property Value calculated?
Limited Property Value is calculated by taking the Full Cash Value and applying limitations set forth by Arizona law.
Are there any limitations on how much the Limited Property Value can increase?
Yes, the Limited Property Value is capped at 5% per year for properties with no additions or improvements, and 10% per year for properties with additions or improvements.
Why is there a cap on the increase in Limited Property Value?
The cap on the increase in Limited Property Value helps prevent property taxes from increasing excessively over time and provides predictability for homeowners.
Does Limited Property Value accurately reflect the market value of a property?
No, Limited Property Value is used solely for the purpose of calculating property taxes and may not accurately reflect the current market value of the property.
Is Limited Property Value the same as assessed value?
No, Limited Property Value and assessed value are different. The assessed value is a percentage of the Limited Property Value and is used to calculate the actual property tax amount.
Can Limited Property Value decrease?
No, Limited Property Value can only increase annually, but it will not decrease even if the market value of the property decreases.
What happens if I make improvements to my property?
If you make improvements to your property, the Limited Property Value may increase by a maximum of 10% per year instead of the usual 5%.
Can I challenge the Limited Property Value determined by the county assessor?
Yes, property owners have the right to appeal the Limited Property Value if they believe it is incorrect. They can provide evidence to support their claim and request a reassessment.
Is Limited Property Value the same for all properties in Arizona?
No, the Limited Property Value is determined on an individual property basis and may vary depending on the property’s characteristics, location, and any improvements made.
Does Limited Property Value affect my property insurance coverage?
No, Limited Property Value is unrelated to property insurance coverage. Property insurance is typically based on the replacement cost of the property and not its assessed value.
Can Limited Property Value be transferred to a new owner?
No, Limited Property Value is not transferable. When a property changes ownership, the new owner will be assessed based on the current market value or a new Limited Property Value determined by the county assessor.
Can the Limited Property Value change if I dispute my property taxes?
If you successfully appeal your property taxes and obtain a lower assessed value, the Limited Property Value may be adjusted accordingly.
In conclusion, Limited Property Value in Arizona is the capped value used by county assessors to calculate property taxes. It helps prevent excessive increases in property taxes and provides predictability for homeowners. While it is not the same as the market value, it serves as a basis for determining tax obligations for property owners.