Phoenix's run-up in values has many owners deferring gains into passive, diversified DSTs.
The typical Phoenix home is worth about $411,000 (-2.4% over the past year, per Zillow's home value index). For owners of appreciated Phoenix investment property, a sale can trigger a large tax bill — which a 1031 exchange into a Delaware Statutory Trust can defer while moving you out of active management.
Phoenix market snapshot
Home value & YoY: Zillow Home Value Index, 2026. Cap-rate range approximate — verify for your asset and submarket.
The tax on a Phoenix sale
Because Phoenix is in Arizona, a gain is taxed as ordinary income up to 2.5%, plus the federal 20% rate and 3.8% NIIT — a combined ~26.3%. A 1031 exchange into a DST defers the whole bill.
See the full Arizona 1031 rules, tax math, and state-specific reporting →
Baker 1031 near Phoenix
Realized programs on Phoenix-area property. Sponsor-reported, net-to-investor, not independently verified; past performance ≠ future results.
| Program | Sponsor | Avg annual | Equity × | Hold |
|---|---|---|---|---|
| CS1031 Crossroads Apartments, DST | Capital Square | 18.35% | 1.45x | 2.3 yr |
| Avenue 25 | Bluerock | 51.93% | 2.97x | 2.75 yr |
| Cielo on Gilbert | Bluerock | 140.23% | 4.27x | 1.83 yr |
Phoenix FAQ
What's the typical home value in Phoenix?
The typical Phoenix home value is about $411,000 (-2.4% year-over-year, per Zillow's home value index, 2026). Owners of appreciated Phoenix rental or investment property often use a 1031 exchange into a DST to defer tax and move to passive ownership.
What tax would I owe selling investment property in Phoenix?
Phoenix sits in Arizona, which taxes gains as ordinary income up to 2.5%; with the federal 20% rate and 3.8% NIIT, the combined bill can reach ~26.3%. A 1031 exchange into a DST defers it. See the full Arizona rules for details.
Does a DST have to be located in Phoenix?
No. A DST doesn't have to hold Phoenix (or even Arizona) property — you can exchange your Phoenix sale proceeds into vetted DST offerings anywhere in the country. We match the replacement to your goals, not your ZIP code.
Disclosures
This page is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Home-value data is from Zillow's home value index (2026) and cap-rate ranges are approximate — verify current figures. State tax rules are summarized; confirm with your CPA and attorney. For accredited investors only. Representatives may transact business only in states where registered or exempt. Securities offered through Aurora Securities, Inc., member FINRA/SIPC; Baker 1031 Investments, LLC is independent of Aurora. Past performance does not guarantee future results.