Cost of Living in Arizona — Housing, Taxes & Everyday Expenses

Low flat tax, warm climate, growing job market

Data: 2026-Q2 · BLS · HUD · KFF

Overview

Arizona switched to a flat 2.5% income tax in 2023 — one of the lowest rates in the country. Phoenix is one of the fastest-growing metros in the U.S.

Housing costs

Median 1BR rent in Phoenix is approximately $1,400. Rents rose sharply 2020-2023 but have stabilized. Tucson is more affordable at around $950.

1BR FMR across major Arizona cities: $1,583 – $1,583/mo (HUD FY2026)

Tax reality

Arizona has a flat income tax rate of 2.5% as of 2023.

Everyday expenses

At a cost of living index of 102, Arizona is about 2% more expensive than the national average of 100. A $70,000 salary in Arizona benefits from the low 2.5% flat tax, providing approximately $1,500-$2,000 more annual take-home than a moderate-tax state.

City comparison

City 1BR FMR 2BR FMR
Phoenix $1,583 $1,839

Salary reality in Arizona

$40-60k ~$3,414/mo take-home
$60-80k ~$4,657/mo take-home
$80-100k ~$5,788/mo take-home
FAQ

Cost of Living in Arizona — FAQ

What is Arizona's income tax rate?

Arizona has a flat income tax rate of 2.5% as of 2023, down from a graduated system. This is one of the lowest flat rates in the country.

Is Arizona affordable?

Arizona has a cost of living index of 102, roughly at the national average. Housing rose significantly 2020-2023 but remains below California and New York.

Related

Full Arizona Income Reality → Cheapest States All Cost of Living Guides

Income Reality Check is an educational tool, not financial advice. Your situation has more dimensions than any tool can capture.