Why Foreign Investors Choose Arizona
Arizona has emerged as one of the top destinations for foreign real estate investors, particularly from Canada, Europe, and Asia. When I advise international clients on Arizona investments, I emphasize these key advantages:
- Year-round sunshine: 300+ sunny days per year, perfect for winter escapes
- Affordable luxury: Prices 50-70% lower than comparable California properties
- Strong appreciation: Phoenix metro has seen consistent value growth
- No state income tax on non-residents: Arizona does not tax non-resident rental income if structured properly
- Active adult communities: World-class 55+ communities designed for retirees
- Golf paradise: 300+ golf courses, many designed by legends like Nicklaus and Palmer
The Snowbird Advantage
Many of my clients from Canada, Northern Europe, and Russia purchase Arizona properties as "snowbird" homes - spending winters in Arizona's warmth while maintaining primary residence abroad. This lifestyle works particularly well because Arizona has direct flights to major international hubs and a large community of winter visitors.
Popular Property Types
Arizona offers diverse property options for foreign investors:
Single-Family Homes
The most common choice for foreign buyers. Ranch-style homes with pools, desert landscaping, and mountain views. Easy to maintain remotely with property management.
Golf Course Properties
Homes on or adjacent to golf courses in Scottsdale, Paradise Valley, or Tucson. Often in gated communities with club membership available.
55+ Active Adult Communities
Sun City, Sun Lakes, Robson Ranch, and similar communities offer resort-style amenities, low maintenance, and built-in social networks.
Luxury Condos
High-rise and mid-rise condos in Scottsdale, Phoenix, and Tempe. Lock-and-leave convenience for part-time residents.
Desert Estate Properties
Large acreage properties in Paradise Valley, Carefree, or Cave Creek. Privacy, custom homes, and dramatic Sonoran Desert views.
Investment Rentals
Single-family homes in Phoenix metro area purchased for long-term rental income. Strong demand from relocating workers and retirees.
Top Markets for Foreign Investors
| Market | Median Price | Best For | Key Features |
|---|---|---|---|
| Scottsdale | $750K+ | Luxury, golf | World-class resorts, Old Town dining, Troon golf |
| Paradise Valley | $2M+ | Ultra-luxury estates | Camelback Mountain views, celebrity homes |
| Phoenix | $450K | Investment, urban | Downtown revival, diverse neighborhoods |
| Mesa/Gilbert | $500K | Families, value | Top schools, master-planned communities |
| Tucson | $350K | Affordable retirement | University town, lower cost, cultural amenities |
| Sedona | $800K+ | Second homes, wellness | Red rock scenery, spiritual tourism |
The Snowbird Lifestyle
Thousands of Canadians, Europeans, and other international visitors spend winters in Arizona. Here is what I tell my snowbird clients:
Typical Snowbird Schedule
- Arrive in November after Thanksgiving
- Stay through March or April
- 4-5 months in Arizona, 7-8 months at home
Tax Considerations
- 183-day rule: Staying over 183 days can trigger US tax residency - I help clients track days carefully
- B1/B2 visa limits: Typically allows 6-month stays, can request extensions
- FIRPTA applies: 15% withholding when you eventually sell
- Property taxes: Arizona property taxes are moderate (0.6-0.8% of assessed value)
Canadian Snowbirds: Watch Your Days
Canada and the US have a tax treaty, but Canadian snowbirds must carefully track their US presence. The IRS uses a "substantial presence test" that weights days over a 3-year period. I advise my Canadian clients to keep detailed records and often recommend consulting with a cross-border tax specialist.
Retirement Communities
Arizona pioneered the active adult community concept, and today offers world-class options for foreign retirees:
Sun City (Original)
The first Del Webb community, established in 1960. Located northwest of Phoenix, Sun City offers golf courses, recreation centers, and an established community of 40,000+ residents. Properties are more affordable than newer communities.
Sun City West
Larger and more upscale than the original, with 7 golf courses, 4 recreation centers, and extensive amenities. Popular with Canadian and European buyers.
Robson Communities
Robson Ranch and other Robson communities offer newer construction and resort-style amenities. Higher price point but modern homes and facilities.
Trilogy Communities
Shea Homes' Trilogy brand offers luxury 55+ living with focus on wellness, golf, and social activities. Locations in Gilbert, Wickenburg, and other areas.
55+ Community Requirements
Under the Housing for Older Persons Act, 55+ communities require at least one resident in 80% of units to be 55 or older. If you are under 55, you can purchase but may face restrictions on residency. I advise clients to review each community's specific rules before purchasing.
Tax Advantages for Foreign Investors
No State Income Tax on Non-Resident Rental Income
Unlike California, Arizona generally does not tax rental income earned by non-resident foreign investors if the property is held in a properly structured entity. This is a significant advantage I explain to my California-focused clients who are considering Arizona instead.
Moderate Property Taxes
Arizona property taxes typically run 0.6-0.8% of assessed value (not market value). Assessed value is usually 10% of full cash value for owner-occupied and 15% for rental properties.
No Estate Tax
Arizona has no state estate or inheritance tax. However, federal estate tax still applies to foreign nationals holding US real estate - I recommend life insurance or other planning strategies for larger estates.
FIRPTA Still Applies
When selling, you will face the 15% FIRPTA withholding on the gross sale price. Read my complete FIRPTA guide for strategies to minimize this impact.
The Purchase Process in Arizona
Arizona has a relatively straightforward purchase process that I guide my clients through:
- Property search: Work with a buyer's agent experienced with foreign investors
- Offer and negotiation: Standard purchase contract, typically 1-3% earnest money
- Inspection period: Usually 10 days for due diligence
- Title and escrow: Title company handles closing (not attorneys like in some states)
- Closing: Can often be done remotely with power of attorney
Total timeline: 30-45 days for a typical transaction.
Remote Closing Options
Many of my foreign clients cannot travel to Arizona for closing. I help arrange remote closings using power of attorney or remote online notarization (RON) where available. Arizona has embraced digital transactions, making this process smoother than in many other states.
Property Management for Absentee Owners
If you will not be living in your Arizona property full-time, professional property management is essential:
- Full-service management: 8-10% of rental income, handles everything
- Vacation rental management: 20-30% for Airbnb/VRBO properties
- Snowbird watch services: Check on property weekly when you are away
- Pool and landscape maintenance: Essential in Arizona climate
Ready to Invest in Arizona Real Estate?
I can help you find the right Arizona property, structure your purchase correctly, and plan for your snowbird lifestyle.
Sergei Tokmakov, Attorney — California Bar #279869