Arizona’s rent increase laws for 2025 bring some important changes that tenants should be aware of. While the state still does not have rent control, there are new developments that may affect renters.
Rental Tax Elimination
Starting January 1, 2025, Arizona will eliminate the rental tax on long-term residential leases. This means:
- Renters will no longer have to pay transaction privilege tax (TPT) on their monthly rent
- The tax savings will vary by city, but average around 2.5% of the rent amount
- Landlords are required to pass this savings on to tenants by reducing rent accordingly
For example, a tenant paying $1,400 in monthly rent with a 2.5% TPT would save about $420 annually from this change.
Rent Increase Regulations
Despite the tax elimination, Arizona still lacks statewide rent control laws. Key points for tenants to understand include:
- There is no legal limit on how much landlords can raise rent
- For month-to-month leases, landlords must provide 30 days’ written notice before increasing rent
- For fixed-term leases, rent cannot be raised during the lease period unless specified in the agreement
Tenant Protections
While rent increases are not capped, tenants do have some protections:
- Landlords cannot raise rent in retaliation or for discriminatory reasons
- Rent increases must be made in good faith and with proper notice
- Tenants have the right to challenge increases they believe are illegal or unconscionable
Proposed Legislation
Some lawmakers have introduced bills to address rising housing costs:
- HB 2086 would allow cities to implement their own rent control measures
3 - HB 2161 proposes limiting annual rent increases to 10%, with exceptions for major renovations
However, these bills have not been passed into law as of 2025.
Other Housing Developments
Arizona has taken steps to increase housing affordability:
- A new law requires cities to permit auxiliary dwelling units (casitas) in urban areas and new construction
- The state minimum wage increased to $14.70 per hour in 2025, which may help some renters afford housing costs
Tenants should stay informed about their rights, review lease agreements carefully, and communicate with landlords about any concerns regarding rent increases. While Arizona’s rental market remains largely unregulated, understanding these laws and changes can help renters navigate the housing landscape in 2025.
Sources:
- https://www.kiplinger.com/taxes/arizona-rental-tax-repeal-in-2025-what-to-know
- https://www.steadily.com/blog/rent-increase-laws-regulations-arizona
- https://www.abc15.com/news/let-joe-know/rent-control-in-arizona-proposed-laws-to-limit-rent-increases
