Understanding Property Taxes on Your Portland Home
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 improvements.
- The Changed Property Ratio effectively applies the Measure 50 limits to new improvements.
- The ratio has been between 50% and 60% in recent years. In most of Multnomah County the Changed Property Ratio for 2019-20 is 49.0%, reflecting average Maximum Assessed Values at less than half of average Real Market Values. That means that roughly half of the value (not cost) of a remodel should be added to your maximum assessed value.
- Unlike some states, the Maximum 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.”