What to do when you receive a notice of tax assessment or tax increase 

In this article: 

• Why property tax assessments increase 
• How tax increases affect your escrow account 
• Why this notice matters for your mortgage payment 
• What to do when you receive a tax assessment notice 

Property tax assessments can be confusing, especially when the notice arrives with unfamiliar numbers or shows an unexpected increase. These assessments play a major role in determining your annual property taxes, which directly affect your mortgage escrow account and your monthly mortgage payment. Understanding how to read and respond to a tax assessment notice can help you avoid surprises and plan ahead. 

This guide walks you through what tax assessment notices mean, why they change and what you should do when you receive one as a Desert Financial member. 

What is a property tax assessment? 

A property tax assessment is an official valuation of your property completed by your county assessor. The notice usually includes information such as: 

• Limited Property Value (LPV)
• Full Cash Value (FCV)
• Assessed Value
• Assessment Ratio
• Property classification
• Applicable exemptions
• Instructions for appeals

The LPV is the primary value used to calculate property taxes in Arizona. It is not the same as your home’s current market value but follows formulas set by state law. 

Why property tax assessments increase 

You may see an increase in your LPV or assessed value for several reasons: 

• Annual LPV adjustments: Arizona law allows your LPV to increase by a limited percentage each year. 
• Home improvements: Upgrades, additions or significant repairs can increase your assessment. 
• Correction of records: The assessor may update information about your property’s size or features. 
• Market trends: While LPV doesn’t track full market value, rising home prices can still influence assessments. 
• Local tax district budgets: Even if the assessment stays the same, tax rates may increase based on school, city and district needs. 

Why this notice matters for your mortgage payment 

Because Desert Financial uses your property tax information to calculate your escrow payment, an increase in your tax assessment can directly affect your mortgage payment. 

If your taxes increase: 

• Your monthly escrow portion will increase. 
• Your total mortgage payment may rise.
• Your next escrow analysis may show a shortage.

These changes are normal, but they can be surprising if you are not expecting them. 

What to do when you receive a tax assessment notice 

Here are the steps you should take when you receive your assessment notice: 

Step 1: Review the Limited Property Value (LPV)  

LPV is the primary factor used for tax calculations. Compare this year’s LPV to last year’s to understand how much it increased. If the LPV increased more than expected, it may be due to improvements or corrections to your property record. 

Step 2: Check the property details for accuracy 

Incorrect property details can result in inaccurate tax assessments, so make sure the assessor’s information is correct, including: 

• Square footage
• Property classification
• Number of bedrooms and bathrooms
• Additions or improvements
• Lot size

Step 3: Compare your assessment with similar homes 

You can view property records for your neighborhood through your county assessor’s website. Comparing your assessment with similar homes can help you determine whether the increase is reasonable. 

Step 4: Decide whether to file an appeal 

Most counties allow you to appeal your assessment if you believe it is incorrect, and the assessment notice will include instructions and deadlines for filing an appeal. Reasons to appeal include: 

• Inaccurate property data
• Assessment significantly higher thansimilar homes
• Incorrect classification
• Undocumented or incorrect improvements

Step 5: Plan ahead for possible escrow changes 

Even if you do not appeal the assessment, it’s helpful to anticipate future changes. If your taxes increase, your escrow payment will increase at your next analysis. If the increase is significant, you may see an escrow shortage and a higher payment next year. If taxes decrease, you may see a smaller escrow payment or a possible surplus. Planning ahead can help you prepare for your next mortgage payment adjustment. 

How tax increases affect your escrow account 

The amount collected in escrow must match the amount needed to pay your tax bills. When taxes increase, you may see: 

• Escrow shortage: Your escrow balance may not be enough to cover the higher tax bill. 
• Higher monthly payments: Your escrow contribution increases to meet new projected tax costs. 
• Adjustment choices: You may choose to pay the shortage in full or spread it over 12 months. 

What if the assessment seems too high? 

If you believe your assessment is incorrect, you can: 

• File an appeal with your county assessor within the deadline listed on your notice.
• Request a review of your property characteristics.
• Compare your property with similar homes.
• Provide evidence such as sales data or appraisal information.

Should you send your assessment notice to Desert Financial? 

You do not need to send your assessment notice to Desert Financial because the county will report the finalized tax amounts directly to us when bills are issued. However, we’re always here to assist you, especially if:  

• You want help understanding how your assessment may affect your payment.
• You anticipate a significant tax increase. 
• You want to discuss your escrow before the next analysis.
• You need guidance on budgeting for future changes.

When To Contact Desert Financial 

We’re always here to support you with clear answers and member-first service. Contact Mortgage Servicing at (602) 433-7097 or firstmortgageservicing@desertfinancial.com if: 

• You received a large tax increase and want help planning ahead.
• Your next escrow analysis doesn’t match your expectations. 
• You’reconcerned about an escrow shortage. 
• You need help understanding the assessment notice.
• You want to understand how an appeal might affect your escrow.