Free calculator
Lot Carry Cost Calculator
Estimate property tax, insurance, and loan interest while you hold a lot through permitting and construction.
Total carry cost
$19,900
$1,329 a month · 4.7% of lot + hard cost + carry · one extra build month $1,612
Exact total $19,931. The headline is rounded to the nearest $100. Annual property tax on the lot is $945.
| Item | Amount |
|---|---|
| Property tax | $1,181 |
| Land-loan interest | $0 |
| Construction-loan interest | $13,600 |
| Builder's risk | $3,400 |
| Liability insurance | $250 |
| HOA and utilities | $1,500 |
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With the defaults, assessed value is $60,000 times 15% = $9,000, so tax is $945 a year, or $1,181 over 15 months. Construction interest is $340,000 times 50% times 8% times 12/12 = $13,600. Builder's risk is $3,400, liability $250, HOA and utilities $1,500, and there is no land loan. Total about $19,900 (about $1,330 a month, 4.7% of lot + hard cost + carry). An extra month of construction costs about $1,610.
How this is calculated
months_total = pre_build_months + build_months
assessed = lot_price * lpv_pct/100 * assessment_ratio/100
tax_annual = assessed * tax_rate_per100 / 100
tax_carry = tax_annual * months_total / 12
land_months = land_loan_rolls ? pre_build_months : months_total
land_interest = land_loan_amt * land_loan_rate/100 * land_months / 12
const_interest = const_loan_amt * avg_draw_pct/100 * const_loan_rate/100 * build_months / 12
br_premium = max(br_min, hard_cost * br_rate/100 * build_months / 12)
liability = liability_annual * months_total / 12
hoa_util = hoa_util_monthly * months_total
total_carry = tax_carry + land_interest + const_interest + br_premium + liability + hoa_util
monthly_carry = total_carry / months_total
cost_of_1mo_delay = (tax_annual + liability_annual)/12 + hoa_util_monthly
+ (land_loan_rolls ? 0 : land_loan_amt*land_loan_rate/100/12)
+ const_loan_amt*avg_draw_pct/100*const_loan_rate/100/12
+ hard_cost*br_rate/100/12
carry_pct = total_carry / (lot_price + hard_cost + total_carry) * 100
Property tax here is on the lot only. Arizona values real property as of January 1 of the year before the tax year (A.R.S. 42-11001), so a partly built house may not be on the roll yet.
Interest is simple interest on an average drawn balance. An S-curve draw schedule is not included. Many lenders use an actual/360 day count, which adds about 1.4% to this simple-interest figure.
The loan interest rate fields are the rates you pay your own lender.Default values and sources
| Default | Value | Status | Source | Notes |
|---|---|---|---|---|
| Vacant land class | Class 2(R) | Sourced | A.R.S. § 42-12002 | Vacant land falls in class 2(R), "all other real property." |
| Class 2(R) assessment ratio | 15% | Sourced | A.R.S. § 42-15002 | Applied to limited property value. |
| Class 3 owner-occupied ratio | 10% | Sourced | A.R.S. § 42-12003 and § 42-15003 | Class definition: https://www.azleg.gov/ars/42/12003.htm |
| Class 4 rental residential ratio | 10% | Sourced | A.R.S. § 42-15004 | Rental residential property. |
| Valuation date | January 1 of the year before the tax year | Sourced | A.R.S. § 42-11001 | A partly built house may still be valued as land until the next cycle. |
| Combined tax rate | $10.50 per $100 | Derived | Yuma County adopted levies and rates, Aug 18, 2025 (corrected Sep 4, 2025) | Illustrative Wellton-area sum: Yuma County primary 2.4206 + secondary 1.1348, Arizona Western College 1.9894 + 0.2622, Wellton Elementary 2.0227, Antelope Union High 2.6217, and Southwest Technical Education District 0.0500, totaling 10.5014. Leaves out the state equalization rate, fire districts, and community facilities districts. The Links at Coyote Wash districts in Wellton add 0.30. Confirm your parcel's tax area. |
| Construction months | 12 | Sourced | Census Survey of Construction via NAHB, 2025 | Homes built by hired contractors took about 11.7 months from authorization to completion. Rounded to 12 here. |
| Prime loan rate | 7.00% | Sourced | Federal Reserve H.15, prime loan rate, Oct 15, 2026 | Reference only. It is not a rate this site offers. |
| Construction loan interest rate | 8.0% per year | Editable assumption | No public quote verified | Prime loan rate (sourced) plus an assumed 1.0 percentage-point margin. Enter the loan interest rate your own lender quotes you. |
| Land loan interest rate | 9.0% per year | Editable assumption | No public quote verified | The rate you pay your own lender. The default balance is $0 (cash lot). |
| Average share outstanding | 50% | Editable assumption | No public source verified | Evenly spaced draws average about half the commitment. |
| Builder's risk premium | 1.0% of hard cost per year | Editable assumption | No public rate table verified | Premiums are quote-based. Optional premium floor defaults to $0. |
| Vacant-lot liability insurance | $200 per year | Editable assumption | No public source verified | Replace with a quote. |
| HOA and base utilities | $100 per month | Editable assumption | No public source verified | Dues plus base utility charges. |
| Lot price | $60,000 | Editable assumption | No public source verified | Replace with your purchase price. |
| Limited property value as % of price | 100% | Editable assumption | No public source verified | The assessor's limited property value is often below purchase price, so 100% is a cautious default. |
| Months before construction | 3 | Editable assumption | No public source verified | Use the permit timeline estimator to size this. |
| Hard cost and construction loan | $340,000 | Editable assumption | No public source verified | Roughly the Yuma County hard-cost example from the new-build cost estimator. |
Sources last verified: 2026-10-18. Re-verify every source at least yearly.
How carry cost is built
What "carry cost" means
Carry cost is what a lot, or a house in progress, costs you each month before you can live in it. That includes property tax, insurance, loan interest, HOA dues, and base utility charges. None of it adds a stud or a shingle. It simply accrues with time. That's why builders track it separately from construction cost, and why a two-month schedule slip can cost real money without changing the house at all.
Two phases: before and during construction
Your carry starts the day you buy the lot, not the day the slab is poured. During design and permitting you pay property tax, any land-loan interest, liability insurance, and HOA dues. Once construction starts, two bigger items come in. One is interest on the construction loan. The other is a builder's risk policy that insures the structure while it's being built. Entering the months before construction starts separately keeps the math honest. The Arizona Permit Timeline Estimator can help you size that number.
How Arizona property tax works on a lot
Arizona multiplies the assessor's limited property value by an assessment ratio, then applies the combined tax rate per $100 of assessed value. Vacant land falls in class 2, assessed at 15%. An owner-occupied home is class 3, assessed at 10%. Combined rates depend on your tax area: the county, the community college, local schools, and any special districts. The default here is an illustrative Wellton-area composite of about $10.50 per $100. Your tax bill or the county treasurer's site has the exact figure for your parcel.
Construction-loan interest is charged on what's drawn
A construction loan is usually interest-only, and interest is charged only on money that has been drawn. Early in the build, when the foundation is going in, the balance is small. Near the end it's close to the full loan. So the tool applies your loan interest rate to an average balance. Even draws average about half the loan. If your lender rolls the lot payoff into the first draw, the average runs higher. The rate field is the rate you pay your own lender. Enter the quote you received.
What moves the total most
Time and the loan balance matter most. Every line scales with months, and construction interest is usually the biggest single line. The cost of one extra month output turns a delay into a dollar figure. That's useful when you're weighing a faster schedule, or deciding whether to pay for expedited plan review where it's available.
Limits
This is simple-interest math with no lender fees, points, or extension charges. Confirm taxes with the Yuma County Assessor and Treasurer (or your county), insurance with a licensed agent, and loan terms with your lender.
You can get a hard-cost figure, estimate months before construction starts, or add carry to a build vs buy comparison. Related writing: property tax and construction-loan basics.
Questions
What is lot carry cost?
Lot carry cost is the total of recurring expenses you pay to hold a lot, or a house under construction, before you can use it. It usually includes property tax, insurance, land-loan and construction-loan interest, and HOA or utility charges. These costs build up month by month regardless of progress, so builders estimate them separately from construction cost.
How is construction loan interest calculated during a build?
It's usually charged only on the amount drawn so far, not on the full loan. Because draws grow as work is completed, this calculator multiplies the loan amount by an average share outstanding (50% by default for even draws). It then applies your lender's annual rate for the number of construction months. Your actual interest depends on your lender's draw schedule and day-count method.
How much is property tax on vacant land in Arizona?
Vacant land is assessed at 15% of its limited property value under A.R.S. § 42-15002, and then the local combined rate per $100 of assessed value applies. For a $60,000 Wellton-area lot at about $10.50 per $100, that's roughly $945 a year. Rates vary by tax area, so check your own tax bill.
Does a house under construction increase my property tax right away?
Usually not right away. Arizona values real property as of January 1 of the year before taxes are levied (A.R.S. § 42-11001), so a partly finished house may be valued as land only, or as partly complete, until the next valuation cycle. Once you occupy it as your primary residence, it can move to class 3 at a 10% assessment ratio. Ask your county assessor how your parcel will be treated.
How much does one month of construction delay cost?
With the default inputs, about $1,610 per month. Most of that is construction-loan interest on the drawn balance, plus builder's risk, property tax, and HOA or utility charges. The calculator shows this as "cost of one extra build month." Enter your own loan, rate, and insurance quote to see your figure.
Educational estimate only. This isn't tax, legal, lending, or insurance advice. Loan rates shown are rates a borrower pays their own lender. Confirm every figure with your county assessor and treasurer, your lender, and a licensed insurance agent.