Property tax statements have arrived, and some people are surprised to see their taxes increase from last year by four to six percent. There has been a fair amount of media coverage of this, but I don’t think the “why” has been made very clear. I’ve written more extensively at our Portland Home Team web site, but here is my attempt at a concise explanation:

Oregon property tax basics:

  1. Property taxes are based on the property’s Assessed Value (AV) multiplied by the applicable millage rate.
  2. Assessed value is the lesser of:
    1. the Real Market Value (RMV), which is the market value on the January 1st preceding the July to June tax year, or
    2. 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.
  3. Millage rates vary by taxing district, but they are permanently limited by Measure 5, passed in 1990, and Measure 50.
    1. 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.
    2. Voter approved bonds and levies raised many Portland homeowners’ 2009-10 taxes more than the dictated three percent increase in MAV.

What has happened to Portland market and 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.

2009-10-Property-Tax-Growth

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. More on that Wednesday. Call or email us any time if you would like to discuss your concerns in detail.