Why Paradise Valley Has No Town Property Tax—and Who Pays

Paradise Valley homeowners get no property tax bill from their Town, but they do get a monthly utility bill. On it is a fire service fee based on the square footage of the house. The Town's Resident Guide says the fee started in January 2013 "to offset the cost of providing fire protection," is billed monthly on the Town's utility bill, and charges owners of undeveloped parcels and raw land $10 a month. "No property tax" is the headline fact for anyone comparing Paradise Valley with Scottsdale or Phoenix. The fire fee completes the picture, and it shows how the whole town is financed.

What it shows is this. Paradise Valley can skip a municipal property tax because people who don't live here pay most of its costs. Resort guests and construction activity carry much of the load. A reserve fund that earns its own income covers more. The Town bills residents directly for only a few services, through fee-based funds. A buyer here is buying into that arrangement along with the house.

The fee that tracks the size of the house

The Town's 2013 fee schedule set the residential tiers by dwelling size.

In 2017 the Paradise Valley Independent reported the same $30, $40 and $50 tiers. The Resident Guide, revised in 2023, still describes the fee as based on square footage. A schedule confirming those exact dollar amounts for 2026 hasn't been published where we could check it, so a buyer should ask the Town's Sewer, Alarm and Fire Billing Department at 480-348-3518 for the current rate on a specific property.

The fee doesn't cover the full cost of the service. The Town's Fiscal Year 2027 final budget, covering July 1, 2026 through June 30, 2027, estimates $3,248,000 in fire service charges against $5,191,984 in fire services expenses. It also budgets a $1,300,000 transfer from the General Fund into the fire fund. So the General Fund pays part of what homeowners would otherwise be billed for fire service.

Where the General Fund gets its money

The Town Council adopted the FY2027 budget on May 14, 2026. Its summary schedule says it plainly: "The city/town does not levy property taxes and does not have special assessment districts for which property taxes are levied."

Most of the replacement money is sales tax. For FY2027 the Town expects $37,678,398 in transaction privilege tax, out of $52,964,921 in total General Fund revenue. That's about 71 percent. State-shared revenue of $5,367,047 adds roughly another 10 percent. The Arizona Department of Revenue's city profile lists the Town's regular rate at 2.50 percent. Hotel stays carry an extra 3.40 percent on top of that, a rate in effect since August 1, 2010.

The budget reports sales tax as one line and doesn't say who pays it. The clearest public breakdown comes from Councilmember Anna Thomasson. In a December 2025 opinion column in the Paradise Valley Independent about the Town's annual financial report, she wrote that "most of our revenues come from taxes from our resorts (about 35%), followed by construction sales tax revenue (about 15%)."

Those are one council member's rounded figures for total revenue of $58 million in that fiscal year. They aren't an audited table by category. They're still the most direct public answer to who pays. Resort guests cover about a third. Construction covers another seventh. Investment income on the Town's reserves brings in about as much as the State of Arizona sends.

Construction is part of the tax base

The construction share says a lot about this market. Sales tax on construction applies when work gets done, so every major remodel and every new custom home on a large lot adds to the Town's revenue. The same FY2027 budget expects $3,301,860 in permit and planning fees, up from $3,119,460 the year before. When a buyer budgets for a renovation here, part of that budget goes to the Town that the house's tax bill doesn't support.

Construction is also the least steady of those sources. A resort books guests every year. Building activity depends on lending conditions and buyer confidence. That's one reason the Town holds what it holds.

A reserve large enough to earn its own income

Thomasson wrote that FY2025 revenues of $58 million against expenses of $36 million produced a $22 million surplus, which went into the general fund's strategic reserves. The FY2027 budget shows the General Fund starting the year with a balance of $137,806,928. Budgeted General Fund spending for the year is $35,555,745.

That's close to four years of General Fund operations sitting in the bank. The budget sets aside $32,271,585 of it as "maintained for future financial stability" and another $5,000,000 for future retirement contributions. The balance pays a return of its own. The Town expects $1,973,567 in General Fund investment earnings for FY2027, compared with $1,265,567 estimated for FY2026.

This is how a town without a property tax handles the uneven parts of its income. Strong years add to the reserve, and the reserve earns income in every year. For a buyer, a large reserve means the Town doesn't have to raise money from residents in a hurry if resort or construction revenue drops for a year or two.

The resort that's still unfinished on Scottsdale Road

Resort revenue arrives only once a resort is open, and a large hotel project near Lincoln Drive and Scottsdale Road shows how long that can take. Five Star Development and related entities filed for Chapter 11 on November 4, 2025, and named Madison Realty Capital as the secured lender. In September 2026, the Phoenix Business Journal reported that a joint Chapter 11 plan filed September 18 could send the unfinished 215-room Ritz-Carlton hotel to a court-approved sale. The plan would go to a vote on November 4 if a judge approves it. Under the proposed bidding rules, any qualified bidder would have to identify an experienced hotel developer committed to finishing the hotel.

The Town's budget doesn't assign any revenue projection to this project. The sales tax line is one aggregate estimate. The point for a buyer is about how the Town is built. About a third of its revenue comes from resorts that are open and operating. A $137.8 million reserve gives the Town room while a project of this size works toward completion.

What a Paradise Valley property tax bill still includes

"No property tax" refers only to the Town. The Resident Guide states that property taxes "for other political subdivisions are collected by Maricopa County, the State of Arizona and various public school and special districts." A Paradise Valley homeowner still gets a county property tax bill. The difference is that the Town's own line is missing from it. On top of that come the Town's enterprise charges for fire, sewer service and alarm monitoring, which the Resident Guide describes as services paid for by the fees collected. As the FY2027 fire figures show, the General Fund still covers part of the fire service's cost.

When comparing carrying costs with a nearby city, it helps to look at three things together: the county tax bill, the Town utility bill with its fire fee, and the sales tax paid inside town limits. Any one of them alone gives a skewed picture.

Frequently asked questions

Has Paradise Valley ever had a property tax? The Town was incorporated on May 24, 1961, after residents became concerned that being annexed would bring new zoning and property taxes. The current budget confirms the Town levies none today. We haven't found a document covering the Town's entire tax history.

Does the fire fee apply to a lot with no house on it? Yes. According to the Resident Guide, owners of undeveloped parcels and raw land pay $10 a month.

Do I need to register a home alarm? The Town's alarm FAQ says residents no longer have to register a home alarm system.

Who provides fire protection? The Town's fire services are run through its fire services department under an arrangement with the City of Phoenix. The 2013 provider license required two fire stations in Paradise Valley, each with an engine company staffed around the clock that includes at least two certified paramedics. To confirm current terms for a specific address, contact the Town directly.

A Paradise Valley home's full carrying cost includes a county tax bill, a monthly Town fee sized to the house, and a municipal budget that depends on resorts and construction. At Cassandra Cook, we bring a mortgage lender's habit of tallying every recurring cost to each Paradise Valley valuation and purchase. If you'd like those figures worked out for a specific property, request a free home valuation and we'll go through them with you.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.