Buying a Home in Tucson: Capital Improvement Fees

When you’re buying a home in the Tucson area, there are a lot of numbers to understand before you sign on the dotted line. One cost that surprises some buyers is what we call a capital improvement fee. These fees are especially common in communities with homeowners associations and they can add thousands to your closing costs.

What are capital improvement fees?

A capital improvement fee is a one-time charge connected to the sale or transfer of a home. The homeowners association collects the fee and places it into a reserve or capital fund. HOAs use these funds for long-term upgrades and major repairs. Have you ever been to a community gym or clubhouse and wondered why it was so outdated? Or, have you wondered why anyone would want to buy in that community knowing it needed major upgrading? Capital improvement fees are there for that exact reason!

Think about projects like clubhouse renovations, roads, pools, golf courses, and large infrastructure improvements. These expenses go beyond routine maintenance and normal operating costs.

Buyers should not think of capital improvement fees as a tax. HOAs charge them to help maintain the community and protect property values over time.

Who pays the fee?

In Arizona and in most Tucson area transactions, the buyer pays the capital improvement fee at closing unless you and the seller negotiate something different in your purchase contract. Specifically, the fees will be negotiated on the HOA Addendum. That’s why it is so important to find out about the fee before you submit an offer. Knowing this cost can impact your budgeting, your loan approval, and your overall home buying plan.

How much are these fees here in Tucson?

The exact amount depends entirely on the community.

In some active adult communities, such as SaddleBrooke and Quail Creek, capital improvement fees can be significant. In those neighborhoods, fees are often several thousand dollars. Those neighborhoods are well known (and well loved) for their fantastic amenities!

At the same time, many Tucson area communities have no capital improvement fees at all. Even within the same town or master planned area, one HOA may charge a fee while another does not. This is why it is so important to verify the fee for the specific property you are considering, rather than relying on general assumptions.

What do these fees cover?

Capital improvement fees are not just extra money the HOA collects. They are designed to fund major projects that go beyond routine maintenance and day-to-day expenses.

These funds often help pay for long-term improvements such as:
• Roads, roofs, and parking areas
• Clubhouse and community amenity upgrades
• Pool and fitness facility renovations
• Golf course and shared recreational areas
• Infrastructure repairs and long-term replacements

These are large expenses that regular monthly or annual dues are not meant to cover. Since infrastructure wears out over time, capital improvement fees help maintain the overall quality of the community and protect long-term property values.

Why this matters for buyers

When you are submitting an offer on a home, capital improvement fees should never come as a surprise. Sellers are required to disclose these fees in the HOA Addendum. Using the HOA addendum, buyers and sellers can negotiate who will pay the capital improvement fee as part of the purchase contract. This is one of those details I always review carefully with my buyers. Knowing about the fee early allows you to budget accurately and negotiate confidently.

If you have questions about a specific community or HOA fee, I am always happy to walk through the numbers with you before you write an offer. Knowing the details upfront makes the entire process smoother.

Here’s a great website showing how SaddleBrooke Two chose to increase their Community Improvement Fund. Click here to visit the site!

Have questions, or ready to buy and sell in Arizona? Reach out to me here!