If you love hot, sunny weather and natural beauty, you’ll love Arizona. The Grand Canyon State has a diverse population and plenty of natural attractions. When it comes to taxes, the state’s sales tax is high, but property and income taxes are below average. The overall cost of living in Arizona is relatively low compared to the rest of the United States.
Housing Costs in Arizona
Deciding whether to renting or buy is an inherently difficult decision. In Arizona’s most populous cities, though, the majority of residents are homeowners. NeighborhoodScout data shows that Scottsdale, Mesa and Chandler all have homeownership rates around 60% and higher. This statewide trend is further visible in Sedona, where 73.3% of residents are homeowners.
Despite the seemingly strong demand for homes in Arizona, median home values aren’t overly exorbitant. In Phoenix, the state’s largest city, the median home value is $230,493, according to NeighborhoodScout. In Flagstaff and Scottsdale, though, these values jump to $376,887 and $560,871.
The good news is that Arizona rent is affordable. For example, 53% of Tucson residents are renters, and the median rent for a two bedroom apartment there is just $936, according to Apartment List. That places the city $239 below the median national rent for two bedrooms, which is $1,175.
Apartment List data indicates the national median for studio apartments is $827. Some cities in Arizona come in above that mark. Gilbert and Peoria have $952 and $938 median studio rents, respectively.
Arizona residents pay higher-than-average electricity bills. According to the U.S. Energy Information Administration (EIA), the average monthly electricity bill in Arizona is $128.40. That places Arizona sixth in the nation, and its substantially higher than the national average of $111.67.
The constant heat in Arizona is a major culprit for these inflated electricity bills. Statistics from USClimateData.com shows that Arizona has an average annual high temperature of 86.7 degrees, making air conditioning a necessity.
According to the Bureau of Labor Statistics (BLS), Phoenix area residents spend an average of 11% of their annual income on food, compared to the U.S. average of 12.6%. Furthermore, the BLS found that “Phoenix area households spent $3,938, or 57.4%, of their food dollars on food at home and $2,918 (42.6 percent) on food away from home.” As a comparison, the national averages for these statistics are 56.3% for food at home and 43.7% for food away from home.
When it comes to specific food items, Arizona’s prices are generally cheaper than the U.S. average. Based on May 2019 data from Numbeo.com, a gallon of milk in Phoenix goes for $2.06 compared to the $3.10 national average. The same applies to a dozen eggs in Chandler, which costs $2.10, whereas the national average is $2.26.
May 2019 Data from GasBuddy places Arizona as the seventh-worst state in terms of gas prices. Its $3.15 average is well above the national mark of $2.92.
If you’re not big on driving, there are public transportation options in Arizona. A 31-day pass on Phoenix’s Valley Metro will cost you $64. A 30-day pass on Tucson’s SunGO costs $48, and a 31-day pass on Glendale’s Beeline bus goes for $36. Of course, you’ll need to make sure that you can get between home and work on public transportation if you decide to go car-free.
Income tax rates in Arizona range from 2.59% to 4.54%, depending on your bracket. Basically, the more money you make, the more you pay in taxes. Note that these rates are on the low side for state income taxes in the U.S.
Sales tax in the Grand Canyon State is high, though. At a city level, rates range from 7.6% to 11.2%. The base state sales tax rate is 5.6%, but counties and cities add their own rates on top of that. Altogether, Arizona’s sales taxes average 8.33%, which is good for 11th highest in the nation.
On a positive note, Arizona has an average effective property tax rate of just 0.77%, lower than the national average. It also has the fifth-lowest gas taxes in the nation, at 19 cents per gallon of regular gasoline and 27 cents per gallon of diesel.
According to 2016 data from the Health Care Cost Institute, healthcare prices in the Phoenix metro area are 3% below the national median, while the Tucson metro area is much lower at a 14% difference. Additionally, Tucson and Phoenix metro area healthcare prices have risen 20% and 15%, respectively, since 2012.
This trend shifts if you look into total employee contributions for single healthcare coverage. In fact, a 2017 report from the Agency for Healthcare Research and Quality shows Arizonans pay $1,523 per enrolled employee at private companies. This is $108 higher than the national average.
Miscellaneous Cost of Living Facts
Want to visit the Grand Canyon while you’re in the Grand Canyon State? A Grand Canyon National Park vehicle permit will cost you $35. Don’t want to bring your car? An individual permit is $20 if you’re “entering by foot, bicycle, park shuttle bus, Grand Canyon Railway and private rafting trip.” If you’re with someone 15 or younger that person can get in free. Admission is free to all visitors on certain national holidays, like Veterans Day (11/11) and the National Park Service Anniversary (8/25).
Grand Canyon not your thing? Check out some spring training baseball games in Arizona’s Cactus League. Half of the country’s Major League Baseball teams train in Arizona, across 10 stadiums.
Next Steps If You’re Making the Move to Arizona
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