Tax Time!

It’s November, which means it’s time for Oregon residents to get their property tax bills for the year. When I assist buyers in finding a house, they often notice property tax discrepancies in otherwise-comparable properties, which can sometimes be the differentiating factor in making a decision on a home. Since it’s the season for property taxes, I thought it might be helpful to pull back the curtain a little on how the tax assessor calculates property taxes.

If you are in Multnomah County, these two articles – delving into how the tax bill is calculated (HERE) and frequently asked questions (HERE) – have been illuminating for me in terms of parsing through some of the idiosyncrasies of the Multnomah County tax code. Clackamas County has this online PDF as a useful resource (HERE), while Washington County’s main site is HERE.

For all three counties, Oregon’s Measure 5 (passed in 1990) and Measure 50 (passed in 1997) have been the two main legislative apparatuses that have influenced the state tax code. Measure 5 caps property tax calculation for real market value by $15 for every $1000 the home is worth. Measure 50 established “maximum assessed value” by setting its baseline of a home’s 1995 real market value less 10% (for every home built before 1995) and capping increases for maximum assessed value at 3% per year. Homes newer than 1995 have their value calculated by the city assessor, using their formula, but retain the 3% increase. Please keep in mind the 3% cap does not include local bonds and initiatives that may be passed by voters.

There are exceptions for that 3% increase, and some of these are especially germane to buyers and sellers. These exceptions include:

  • New construction or additions of more than $10,000 in a year or $25,000 over five years.
  • Remodeling or rehabilitation for the same amounts as the above item.
  • Partitions or rezoning.
  • Discovery of omitted property (this is especially notable for buyers who may be thinking of purchasing a home with unpermitted work, as an appraisal can turn up omitted property).
  • Disqualification from past exemptions.

I tried to streamline this as best I could, but the tax code does remain extremely hard to parse. If you have any questions or input, let me know, and hopefully we can discover the answers together!

Posted on November 18, 2019 at 11:09 pm
Bill Grange | Category: Portland Oregon Real Estate Market

Leave a Reply

Your email address will not be published. Required fields are marked *