SB 1263 Summary

• Establishes a withholding tax requirement of 2% on Arizona real estate sales by nonresidents, with exceptions for properties under $100,000 and foreclosures.

• Directs withholding tax collections to be split between the housing trust fund (70%) and the Arizona finance authority operations fund (30%).

• Requires title insurance companies, financial institutions, and attorneys closing real estate transactions to withhold and remit taxes, with penalties of $500 to $2,500 for non-compliance.

• Allows nonresident transferors to avoid withholding by providing written affirmation certifying residency, permanent business location in Arizona, or that the property is their primary residence.

• Funds from the Arizona finance authority operations fund must be used exclusively for down payment assistance programs requiring homebuyer counseling and repayment agreements.