Buying or selling in Sedona and wondering how property taxes will hit your bottom line at closing? You are not alone. Taxes and local fees can be confusing, and small mistakes often lead to costly delays. This guide walks you through how Arizona calculates taxes, what gets prorated in escrow, and the Sedona and Coconino County fees you should expect. You will also get a simple checklist to keep your closing on track. Let’s dive in.
How Arizona property taxes work
Arizona uses two values to set your property tax bill. The assessor estimates a Full Cash Value (FCV), then calculates a Limited Property Value (LPV) that becomes the base for most taxes. LPV cannot exceed FCV, and it is the key number used to compute your taxes. You can review the basic terms in the State Board of Equalization’s FAQs at the state level (Arizona State Board of Equalization).
Coconino County confirms that LPV drives the tax bill and that state rules limit how fast LPV can rise. Proposition 117 generally caps LPV increases by up to about 5 percent per year, subject to statute and exceptions. This moderates sharp swings and explains why your taxes may not move in lockstep with market price changes (Coconino County Assessor).
In simple terms, the county applies a tax rate to the assessed value, which is usually a percentage of the LPV. That math produces your annual tax dollars. The most recent bill is what escrow uses to estimate prorations.
Why this matters in escrow
At closing, property taxes are usually prorated on an accrual basis as of the closing date. If the current year’s bill is not out yet, the title company uses the latest available bill or a reasonable estimate, then adjusts if needed when the official bill arrives (Pioneer Title Agency).
If you have a mortgage, your lender may set up an impound account for future taxes and insurance. That means you will prepay a few months of taxes at closing to seed the account.
Sedona and Coconino County essentials
The Coconino County Treasurer issues tax bills, accepts payments, and publishes due and delinquency dates for each tax year. First half and second half timelines are posted annually. Use the Treasurer’s official site to verify the current calendar and to avoid fraudulent payment portals (Coconino County Treasurer FAQs).
If you disagree with your Notice of Value or classification, there are set appeal windows through the county and the State Board of Equalization. This can affect future bills, so timing matters if you plan to close before a new value becomes final.
Recording fee and transfer tax
Coconino County charges a flat $30 recording fee for most documents. This appears as a standard line item on your settlement statement (Coconino County Recorder Fees).
Arizona does not levy a large state conveyance or transfer tax like some states. In Sedona, your key transfer costs are the county recording fee, title, and escrow charges, plus lender and association items if applicable (Arizona closing cost overview).
Special assessments and HOA items
Beyond regular property taxes, some properties carry special assessments for things like road or utility improvements. These can show up as installments on the tax bill and may be prorated or paid off at closing. Ask your title officer to check for any municipal or district assessments early in the process (Municipal red flags overview).
If your property is in an HOA, expect transfer or disclosure/estoppel fees. Amounts vary by association and are negotiable by contract, but they are common in Arizona transactions (Typical Arizona closing cost items).
Short-term rental owners in Sedona
Property tax is separate from lodging and business taxes for short-term rentals. If you operate a vacation rental, you must follow state Transaction Privilege Tax rules and any local requirements. These are ongoing business taxes, not traditional property taxes that get prorated at sale (Arizona Department of Revenue TPT resources).
What you will likely pay at closing
Every deal is different, but here are the line items you are most likely to see in Sedona closings:
- Escrow fee for administering the closing, split or assigned by contract.
- Title insurance, with the owner’s policy often paid by the seller and the lender’s policy by the buyer, although this is negotiable.
- Recording fee to Coconino County (flat $30 in most cases) (Recorder Fees).
- Lender fees and prepaid interest if you finance.
- HOA transfer and disclosure fees, if applicable (Arizona closing cost items).
- Prorated property taxes and any unpaid balances cleared at closing (Escrow prorations).
Timeline and risk checkpoints
- Check the current tax bill status with the Treasurer. You do not want to close with delinquent taxes attached to title (Coconino Treasurer FAQs).
- Understand that unpaid taxes can lead to liens and, eventually, tax certificate sales. Clear any balances in escrow to deliver clear title.
- Your escrow officer will obtain tax payoffs from the county and lender payoffs from your mortgage holder. After closing, lenders typically send any remaining escrow balance back to you within a few weeks (Title company payoff FAQ).
Sedona escrow checklist
- Ask your title company for a preliminary title and tax status report early.
- If you are selling, provide lender payoff info and request a tax payoff through your escrow officer.
- If you are buying with a loan, review the Loan Estimate and Closing Disclosure. Check the tax and impound lines closely (Typical Arizona closing cost items).
- Confirm the $30 county recording fee and budget for title and escrow fees (Recorder Fees).
- Ask your title officer to check for special assessments or bonds that might generate supplemental bills (Municipal red flags overview).
- If the home is a short-term rental, verify TPT and local lodging tax requirements for your business plan going forward (Arizona TPT resources).
How tax prorations typically work
Suppose you close on June 30. The seller is responsible for taxes from January 1 through June 30, and you are responsible for July 1 through December 31. Escrow calculates the split using the latest bill or a reasonable estimate, then may reconcile if the official bill later differs (Escrow prorations explained).
Final take
A smooth Sedona closing starts with clear expectations about how Arizona calculates taxes, how prorations work, and which county and association fees apply. Use the checklist above, verify dates and amounts with the Coconino Treasurer, and review your settlement statement a few days before signing. If you want a hands-on advisor who treats your purchase or sale like an investment decision, reach out to Dennis Salazar to plan your escrow with confidence.
FAQs
Who pays Sedona property taxes at closing?
- Taxes are prorated as of the closing date. The seller covers the period they owned the home and the buyer covers the remainder. Escrow clears any unpaid balances using county payoffs (Pioneer Title).
How does Arizona’s LPV cap affect my future bill?
- LPV is the base for most taxes and is generally limited in annual growth by Proposition 117, which can moderate year-to-year changes in your tax bill (Coconino County Assessor).
What is the Coconino County recording fee?
- Most documents record for a flat $30 fee, which appears on your settlement statement at closing (Coconino County Recorder).
Does Arizona charge a transfer tax on home sales?
- Arizona does not impose a large state conveyance or transfer tax. In Sedona you mainly see the county recording fee, plus title, escrow, lender, and HOA items where applicable (Arizona closing cost overview).
How are short-term rental taxes different from property taxes?
- Property taxes are ad valorem and get prorated at closing. Lodging and business taxes for STRs are ongoing TPT obligations and do not transfer the same way at sale (Arizona Department of Revenue TPT).
