A. Land that is used for agricultural purposes shall be valued using only the income approach to value without any allowance for urban or market influences.

Terms Used In Arizona Laws 42-13101

  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Property: includes both real and personal property. See Arizona Laws 1-215
  • Real estate: includes the ownership of, claim to, possession of or right of possession to lands or patented mines. See Arizona Laws 42-11001
  • Valuation: means the full cash value or limited property value that is determined for real or personal property, as applicable. See Arizona Laws 42-11001

B. The income of agricultural property shall be determined using the capitalized average annual net cash rental of the property. For purposes of this subsection the average annual net cash rental of the property:

1. Is the average of the annual net cash rental, excluding real estate and sales taxes, determined through an analysis of typical arm’s length rental agreements collected for a five year period before the year for which the valuation is being determined for comparable agricultural land used for agricultural purposes and located in the vicinity, if practicable, of the property being valued.

2. Shall be capitalized at a rate 1.5 percentage points higher than the average long-term annual effective interest rate for all new farm credit services loans for the five year period before the year for which the valuation is being determined.

  Previous section
Next section  
 Article 3 Contents