Students can look forward to having one less fee to be responsible for, as Transaction Privilege Tax in Arizona was abolished for residential rental properties at the start of this year.
A new rental tax law, originating from Senate Bill 1131, gets rid of TPT for landlords and, subsequently, their renters, which could possibly save them a large portion of their assets.
"I don't have a stable source of income that I can rely on by myself," Emi Heller, a freshman studying communication, said. "That's definitely nice as someone who's looking for a place to live."
TPT is a tax for a seller who does business within the state of Arizona and the tax varies depending on the business activity, according to the Arizona Department of Revenue.
This new law means that "landlords who have long-term renters, many 30 days or more, do not pay that Transaction Privilege Tax, and therefore their renters would not," said Rebecca Wilder, the communications director for ADOR.
The payment falls under the responsibility of the property owner, not the renter. Despite this, the owner typically passes the burden of this tax onto the renter, according to ADOR. However, Wilder said some landlords do not pass on the payment to renters.
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While Arizona did end TPT for the entire state, some cities were already not charging TPT, so their residents will not see a change in their rent, Wilder said.
The average rent in Maricopa County is about $2,100 a month, according to Zillow. Tempe's TPT for residential leasing was at a rate of 1.8% in 2024. On average, a renter would pay $38 a month or $456 a year in TPT.
Heller said she is planning on moving out of on-campus housing and into a rented apartment in the coming school year. As someone who will be renting soon, she said she is glad that TPT has been abolished in Arizona.
"I would love to have access to housing, and I'm appreciative of anything that can make it more affordable," Heller said.
Alexia Rivera Perez, a sophomore studying criminology and criminal justice, said while she currently lives in student housing, her family rented property her entire childhood. She said her family had difficulty in the past paying rent and couldn't imagine it now with more fees like TPT.
While she was turned away from renting due to familiarity with it growing up, she said knowing this law is now in place will make her consider the option more seriously.
"It encourages me a little more (to) rent, and it makes me feel a little more at peace that there's not additional fees," Rivera Perez said.
The new law brings relief to students not only because it has the ability to bring down rent but because it brings more transparency for renters.
Anushree Mishra, a junior studying marketing, said she appreciates it when she is shown upfront the price of what she is going to pay without having any "hidden fees."
"Rent would be $1,200, but then with everything else, it usually adds up to $1,400," Mishra said. "That $200 could have been used toward something else, even groceries."
Mishra commutes to school and lives at home, but she said she is more willing to rent now that it seems like the city is "looking out" for her.
"When you know that the city is also working to actively try to make renting a lot more friendly for people, it does encourage you to take part in it and also rent," Mishra said.
Mishra said the rental experience is impactful to a lot of people because most people start out renting before they buy property.
"You can't just go buy a house immediately, so the rental process is definitely important," Mishra said.
Heller, like Mishra, also had feelings of fatigue surrounding additional fees being incorporated into daily purchases.
"As a student, it feels overwhelming to constantly ... pay more things to have this life," Heller said. "And for the most part, they can do that simply because I need what they're selling to me."
While Heller is happy about the new law, she said she is fearful of what she could have to pay to allow the city to get rid of TPT. SB 1131, the bill from which the new TPT law originated, does not include information about how they plan to replace the funds usually taken from the tax.
"It will rear its head somewhere else," Heller said. "Alleviate pressure in one aspect of your life, but then it could potentially create new pressure in other parts of your life."
Edited by George Headley, Abigail Beck and Natalia Jarrett.
Reach the reporter at ehprest1@asu.edu and follow @ellis_reports on X.
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Ellis is a sophomore studying journalism and mass communication. This is her first semester with The State Press. She has also worked at Arizona PBS and Blaze Radio.
