Cost of Living in Arizona — Housing, Taxes & Everyday Expenses
Low flat tax, warm climate, growing job market
Data: 2026-Q2 · BLS · HUD · KFFOverview
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
Salary reality in Arizona
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.