Thedailymiaminews- Tenants should be aware of the significant changes to Arizona’s rent increase legislation that will take effect in 2025. Although the state has not yet implemented rent control, there are new developments that could have an impact on tenants.
Abolition of Rental Tax
Beginning on January 1, 2025, Arizona will no longer impose a rental tax on long-term home leases. This indicates that:
- Renters would no longer be required to pay transaction privilege tax (TPT) on their monthly rent.
- The amount of tax savings will differ from city to city, but it will be approximately 2.5% of the rent price on average.
- Landlords must reduce rent in order to pass on this savings to their renters.
For instance, a renter who pays $1,400 in rent each month and has a 2.5% TPT would save around $420 each year as a result of this move.
Regulations for Increasing Rent
Arizona still does not have any rent control regulations in place, even after the tax was eliminated. Tenants should be aware of the following important points:
- Landlords can increase rent by any amount they like, as there are no legal restrictions on this.
- Landlords are required to give 30 days’ written notice before raising the rent on month-to-month leases.
- Rent cannot be increased throughout the duration of a fixed-term lease unless the lease agreement states otherwise.
Protections for Renters
Even if there is no limit on rent increases, tenants are nevertheless entitled to certain protections:
- Landlords are not allowed to increase rent in response to a tenant’s actions or for discriminatory reasons.
- Rent increases must be done in good faith and with sufficient notice.
- Tenants have the right to contest increases that they believe are illegal or unreasonable.
Legislation that has been suggested
Certain legislators have put forward proposals to deal with the increasing expense of housing:
- HB 2086 would provide localities the ability to put their own rent control mechanisms in place. 3
- HB 2161 suggests that yearly rent increases should be capped at 10%, except in cases of major renovations.
As of 2025, these bills have not yet been made into law.
Additional Housing Developments
Arizona has implemented measures to make housing more affordable:
- A new law mandates that cities allow supplemental dwelling units (casitas) in urban areas and in new construction.
- In 2025, the state minimum wage went risen to $14.70 per hour, which could make it easier for certain tenants to pay for housing.
Tenants should keep themselves updated on their rights, thoroughly examine their lease agreements, and discuss any worries they have about rent hikes with their landlords. Although Arizona’s rental market is mostly unregulated, knowing these regulations and changes can assist renters in finding housing in 2025.