If enacted, this bill would amend current statutes regarding property tax exemptions by changing the method used to adjust the property assessment limit for qualifying individuals. Currently, the Arizona Department of Revenue (ADOR) increases the property assessment limit based on the average annual percentage increase in the GDP price deflator. The bill proposes that starting in tax year 2026, this adjustment will instead be based on the average annual percentage increase in the Federal Housing Finance Agency House Price Index (FHFA HPI) for Arizona. This change aims to better reflect the actual market conditions affecting property values.

Additionally, the bill introduces a definition for "federal house price index" and makes conforming changes to the existing language. It retains the current exemption amounts and income limits but updates the assessment limit to align with the new index. The bill also clarifies that the total assessment limit will be adjusted annually based on the FHFA HPI, while the total allowable exemption amount and income limit will continue to be adjusted based on the GDP price deflator until further notice. Overall, these updates aim to provide a more accurate and equitable framework for property tax exemptions in Arizona.

Statutes affected:
Introduced Version: 42-11111
Senate Engrossed Version: 42-11111
Chaptered Version: 42-11111