Lewis Roca Blog

Arizona’s speculative builder’s tax is a hidden real property transfer tax imposed by Arizona cities but is not imposed by the state. The speculative builder’s tax is a sales tax on the sale of “improved real property.” It is triggered for commercial buildings if the property is sold within 24 months of substantial completion. However, if the property is for inventory, model or custom homes or improvements of residential or commercial lots, there is no 24-month limitation and the tax is imposed when the property is ultimately sold.

Pat Derdenger and Karen Lowell have updated their detailed materials on Arizona’s Speculative Builders tax with the 2019 changes that became effective on April 1, 2019. If you might be a speculative builder or a developer that plans to sell a project, the Updated Materials will be useful reading to see how the tax works.

Click here to download the 2019 Guide to Arizona's Speculative Builder's Tax.