Oregon Property Tax Basics:

• Property taxes in Oregon are due November 15th for the tax year beginning July 1st and ending June 30th. Tax bills are mailed no later than October 25th.
• Property taxes are based on the property’s Assessed Value (AV) multiplied by the applicable millage rate.
• Assessed value is the lesser of:
  • the Real Market Value (RMV), which is the market value on the January 1st preceding the July to June tax year, or
  • the Maximum Assessed Value (MAV) determined under Measure 50, passed in 1997. Measure 50 amended the Oregon constitution to set MAV at the 1995-96 assessed value less 10%, increasing by three percent (no more, no less) per year thereafter.
  • Exceptions to Maximum Assessed Value: New property improvements are not assessed their full value. These include:
    • New construction
    • Partitioned and subdivided lots
    • Substantially remodeled property - $10,000 in one year or $25,000 over five years
    • Zoning change
    • Change in exemption status
  • Changed Property Ratio: The assessor computes a ratio that the average MAV to the average RMV of unchanged property in the same class and area. The Changed Property Ratio is then applied to the market value at January 1st of the listed exceptions, creating a maximum assessed value for improvents.
    • The Changed Property Ratio effectively applies the Measure 50 limits to new improvements.
    • The ratio has been between 50% and 60% in recent years. The Multnomah COunty Assessor's Office told us that for 2009-10 it is about 50% That means that roughly 50% of the value (not cost) of last year's remodel should be added to your maximum assessed value.
  • Unlike some states, the Assessed Value does not reset when a property is sold.
  • One of several arguments made in support of Measure 50 was that a three percent growth rate provided stability and predictability to the property tax system.
  • The fact that some homes had been visited by the assessor in late 1994 and others had not been graced with such a visit for up to six years before that is the basis for much of the disparity in property tax bills between similar homes throughout Oregon. Portland median prices jumped 72% from December, 1988 to December, 1994; when during that time your home was revalued, as reflected in the following year’s assessment, may have dramatically affected your property taxes “forever.”

Specially Assessed Values (SAV) are statutorily created value levels for special programs including farm and forest land, historic property, or qualified open space.

What has happened to Portland market values vs assessed values since 1995?

Overall, Portland market values are now almost exactly 200% of the market values in the 1995-96 tax year, as measured by the Case-Shiller Index of median home sale prices in January 1995 and in January 2009. Under Measure 50, Maximum Assessed Values (MAV) for the 2009-2010 tax year are 136.13% of the 1995-1996 assessed values, which supposedly reflected market values at January 1, 1995. The graph shows the spread between Portland market values and maximum assessed values over the years. Most homes are now assessed at about two-thirds of what the assessor thinks is their market value.

The graph shows the spread between Portland median values and maximum assessed values over the years. Most homes are assessed at about two-thirds of their market value.

• Property Tax Millage Rates:
  • Rates vary by taxing district, but they are permanently limited by Measure 5, passed in 1990, and Measure 50.
  • The rate limits may be exceeded for bonds, hospital districts, police and fire pension obligations, and levies passed in 1996 and later that meet special voting requirements.
  • Voter approved bonds and levies raised many Portland homeowners' 2009-10 taxes more than the dictated three percent increase in MAV.

So who should appeal their valuation?

• You think the real market value on January 1, 2009 was less than the assessed value (which is usually the MAV). A bargain purchase, such as from a relative or a distressed owner, will be evaluated for its fair market value, not necessarily what you paid for it.
• You disagree with the county’s valuation of new construction, remodeling, or other exceptions. Since these are not usually identified on the property tax statement, you will need to contact the county assessor to find out the value placed on any improvements you made this year. It makes sense to appeal an over-valued RMV for last year’s improvements because it affects both the property RMV and the MAV, since the MAV for improvements is derived from the RMV by application of the “changed property ratio.” You cannot appeal the MAV later.
• You think the Assessor’s Office made a calculation error in setting the AV.

How the property valuation appeal process works:

• The Board of Property Tax Appeals only considers assessed valuations. It can not determine the amount of tax to be assessed, nor can it consider financial hardship as a basis for changing an assessment.
• Appeals will only be heard for current year values, which is why the only way to affect the MAV on improvements is to appeal the RMV of those improvements in the year assessed.
• Appeals must be filed between the time property tax bills are mailed and December 31st.
• Oregon Board of Property Tax Appeals forms and instructions are available at BOPTA's web site.  
• If you miss the deadline or seek to appeal a prior year’s value, you may still be able to file an appeal with the Magistrate Division of the Oregon Tax Court. 

Call us with your questions!

If your home is assessed for more than what you think is it was worth on January 1, 2009, consider appealing your valuation. Or call or email us any time if you would like to discuss your concerns in detail.