The City of Tempe Rental tax rate is 1.8% of the gross rent. Owners of residential rental properties are required to obtain and maintain a privilege (sales) tax license. Owners may list multiple residential rental properties located in the City of Tempe under one license as long as each property consists of four or fewer rental units and the legal owner of each property remains the same. As of October 1, 2006, the exemption for one residential rental property was eliminated and ALL residential rental properties are subject to the City’s privilege tax.
You must be licensed and pay tax if you lease or rent residential real property located within the City of Tempe. The entity leasing or renting to the tenant in actual possession is responsible for the tax. Examples of residential rentals include: houses, condos, townhouses, apartments, manufactured homes, and mobile home (trailer) spaces. Rental of a residential space, such as a room to a college student, is also taxable. Rentals for less than 30 consecutive days are also taxable under the Transient Lodging classification.
All amounts paid by the renter to, or on behalf of, the owner are taxable. In addition to rent, taxable income includes payments by the tenant for:
• Pet fees
• Telecommunications (cable TV, phone, internet)
• Non-refundable deposits
• Forfeited deposits
• Utilities
• Pool service or landscape maintenance
• Homeowner association fees
• Late fees, court fees and legal fees
• Repairs and/or improvements
Phoenix Metro Realty property managers will collect the Tempe privileged tax from the renters and pay it on behalf of the rental owners.
Click on the link for information about our Tempe property management.
Click on the link to download the City of Tempe Residential Rental Brochure.
