| How Property Taxes Work in Oregon |
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| Introduction |
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The following is a summary of property taxation in Oregon. For questions about your property's value or taxes, contact the assessor or tax collector of the county where your property is located. The assessor's phone number is listed in the government section of your local telephone book and on this website.
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| Property Assessment |
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The process of identifying taxable property and assigning a value to it is termed appraisal. County assessors appraise most property in Oregon. The Department of Revenue appraises certain large industrial sites, and utility property. Each county assessor prepares their county's assessment roll, which is a listing of all taxable property as of January 1 of each year.
Utility property is placed on a statewide assessment roll. The department allocates utility values to the county rolls prior to the preparation of tax bills.
Property subject to taxation includes all privately owned real property (e.g., land, buildings, and fixed machinery and equipment), manufactured homes, and personal property used in a business. There is no property tax on household furnishings; personal belongings and automobiles; crops; orchards; business inventories; or certain intangible property such as stocks, bonds, or bank accounts.
A business owning or possessing taxable personal property must file a Confidential Personal Property Return (form 150-553-004) with the assessor in the county where the property is located by March 1. If the assessor determines that the total value of the business's personal property in the county is less than $14,000, the assessor will cancel the assessment. This amount can change each year based on the U.S. City Average Consumer Price Index. The assessment cancellation is not applicable to personal property manufactured homes.
Most property used for religious, fraternal, and governmental purposes is exempt. Reductions in assessments are granted for certain types of property such as open space, farmland, forestland, and historical buildings. Properties owned by disabled veterans also are given reduced assessments.
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| Assessment Appeals |
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A property owner or other person who holds an interest in a property that obligates the person to pay the taxes imposed on the property can appeal the valuation of the property to the local Board of Property Tax Appeals. Petitions to the board must be filed between late October, when the tax statements are mailed, and December 31. Petitions are filed in the office of the county clerk in the county where the property is located. There is no fee for filing an appeal with the Board of Property Tax Appeals.
The Board of Property Tax Appeals also can hear appeals of penalties assessed for the late filing of real and personal property returns. The board has jurisdiction to waive all or a portion of a penalty if the petitioner can prove there was good and sufficient cause for the late filing or for first-time non-filers.
Board hearings are informal, and the property owner is not required to have an attorney present. The owner(s) can sign the petition to the board and represent themselves at the hearing or authorize certain other persons to sign the petition for them. Those persons who can be authorized to sign a petition are explained on the petition form. Hearings are scheduled sometime between the first Monday in February and April 15. The clerk of the board will notify the petitioner of the time and place to appear.
Owners of industrial property appraised by the Oregon Department of Revenue may choose to file their appeals directly with the Magistrate Division of the Oregon Tax Court, rather than with the Board of Property Tax Appeals. There is a fee for filing an appeal with the Magistrate Division. The deadline for filing an appeal with the Magistrate Division is also December 31. The phone number for the Magistrate Division is 503-986-5650
If a property owner or assessor is unhappy with the board's decision regarding property value, he or she may appeal to the Magistrate Division of the Oregon Tax Court. Magistrate decisions can be appealed to the Regular Division of the Tax Court. Decisions of the Regular Division of the Tax Court can be appealed to the Oregon Supreme Court.
See How to Appeal Your Property Value for more information on the appeal process in Oregon.
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| Tax Authority |
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Each year all the taxing districts subject to Oregon's Local Budget Law follow the same process to prepare their budgets for the coming fiscal year. During this budget preparation process, the district's budget committee and governing body determine the amount of property taxes the district will need to support the budget. Public meetings are held to gather comments from the district's patrons.
Most annual budgets for taxing districts are based on a fiscal year that begins on July 1 and ends the following June 30. Alternatively, the governing body of a district may elect to budget for a two-year or "biennial" budget period. All the budgets must be adopted by June 30. The taxes needed must be certified to the county assessor every year by July 15 to be placed on the tax roll.
All taxing districts are limited in the amount of taxes they can impose by constitution and statute. These constitutional and statutory limitations are:
1. Taxes under a taxing district's permanent rate limitation.
Taxing districts in existence in 1997-98 were given permanent operating tax rate limits according to a formula set out by a constitutional amendment, Measure 50. Once a permanent tax rate limit is established, it cannot be changed by any action of the district or its patrons. The state Legislature can add additional, lower statutory limits, however. New districts, or districts that have not levied in the past, can ask their patrons to vote on a permanent rate limit for the district. A permanent rate limit is expressed as a tax rate per thousand dollars of assessed value. A local taxing district is permitted to have only one permanent rate limit.
The proceeds from permanent rate taxes may be used for any purpose for which the district lawfully may expend funds. In any year, a district may certify to the county assessor a rate per thousand less than or equal to its permanent rate limit.
A "double majority" of the voters is required to approve a permanent rate limit. This means that a ballot measure proposing a permanent rate limit must receive a majority of affirmative votes at an election in which at least 50 percent of the registered voters cast ballots. The double majority requirement does not apply to the general election held in November of an even-numbered year.
2. Taxes from a taxing district's local option tax authority.
Most taxing districts are allowed to ask their patrons for temporary taxing authority above the permanent rate limitation. This type of authority is not available to education service districts. This authority is known as a "local option tax." Local option taxes are limited to five years for operations and up to 10 years for capital construction purposes. A "double majority" of the voters is required to approve a local option tax.
3. Levies for bonded indebtedness.
Most taxing districts also are allowed to ask their patrons for the authority to issue general obligation bonds to raise money for capital projects. If the bonds are approved, the district can levy annually an amount sufficient to pay principal and interest for the bonded debt. Bond measures to be paid from future tax levies must meet the "double majority" test. Proceeds from a bond levy cannot be diverted to a purpose other than the one stated in the ballot measure approved by the voters that authorized the bonds. Voter-approved bond levies used for capital construction are not subject to the property tax limits of Measure 5.
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| Tax Rates |
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Each year in late September or early October, the county assessor places the taxes certified by the taxing districts on the tax roll. Property taxes are placed on the tax roll in the form of a rate per $1,000 of assessed value. In most cases, the taxes for operations are the permanent rate limits certified by the districts. When a district certifies a dollar amount tax levy, such as a local option tax or bond tax, the assessor must calculate a tax rate. To compute the tax rate, the tax levy amount is divided by the taxable assessed value of the district. For example: Green City certifies a local option tax in the amount of $225,000. The taxable assessed value of the city is $39,487,000. The rate for the local option tax is calculated as follows:
tax levy amount / taxable assessed value = tax rate
$225,000 / $39,487,000 = .0056980 or = $5.6980 per $1,000 of assessed value
This tax rate is placed on the individual property tax accounts in the city. All the taxable property within the city will have the same rate for the local option tax. The amount of tax to be paid, of course, will vary depending on the assessed value of each property.
Individual properties are taxed by the districts that provide services to that property. For example, a property in Green City would pay taxes to the city, the county, a school district, and maybe a library district. Property outside the city would pay taxes to the county, a school district, a rural fire protection district, and maybe a library district, but not to the city.
Some properties are subject to assessments of a special taxing district. An example would be a drainage district that assesses on a per acre basis. These qualifying assessments also are placed on the tax roll.
The total amount of tax placed on a property is computed by multiplying the property's assessed value by the combined tax rates of all the districts in which it is located and then adding any assessments.
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| Taxable Value Limitation |
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The Oregon Constitution limits the rate of growth of property value subject to taxation. The limit is based on a property's maximum assessed value (MAV). The MAV was established for all property in existence in 1997-98 by a formula described in the constitutional amendment, Measure 50. MAV for new property is computed using a different formula also contained in the constitution.
MAV is allowed to increase each year by no more than 3 percent. There are exceptions to this limit, however. The addition of a new structure, major improvement of an existing structure, and subdivision or partition of the property are examples of exceptions that would increase MAV by more than 3 percent.
Each year the MAV and real market value for each property are figured. The property is then taxed on the lesser value, which is called the taxable assessed value.
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| Tax Limitation (Compression) |
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The Oregon Constitution also sets limits on the amount of property taxes that can be collected from each property tax account. These limits are often called the "Measure 5 limits." To figure these limits, taxes are divided into categories described in the constitution. The categories are: education and general government. Some taxes, usually for general obligation bonds, are not subject to limitation. The limits are $5 per $1,000 of real market value (RMV) for education taxes and $10 per $1,000 of RMV for general government taxes. RMV is defined by law as the amount in cash that an informed buyer would pay to an informed seller in an arm's-length transaction occuring on the annual assessment date. (An arm's-length transaction is a business deal made freely in an open market.)
If taxes in either category exceed the limit for that property, the taxes are reduced or "compressed" until the limit is reached. Local option taxes are compressed first. If the local option tax is compressed to zero, and the limit still hasn’t been reached, the other taxes in the category are proportionally reduced.
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| Tax Collection |
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Once the taxes are computed for each property tax account, the tax roll is certified and turned over to the tax collector. The tax collector bills and collects all taxes. Tax statements mailed to property owners show the assessed value and real market value of the property and the taxes imposed for each taxing district. They also indicate any delinquent taxes from previous tax years.
Taxes are levied and become a lien on property on July 1. Tax statements are mailed by October 25. Tax payments are due November 15 of the same calendar year. Taxpayers may elect to pay in thirds. If they do so, no discount is allowed, and the first one-third of taxes are due November 15, the second one-third on February 15, and the final one-third on May 15. A discount of 3 percent is allowed if full payment is made by November 15; a 2 percent discount is allowed for a two-thirds payment by November 15. For late payments, interest accrues at a rate of 1-1/3 percent per month (16 percent per year).
If the property is real property, taxes are delinquent if not paid fully by May 15. If, after three years from the tax due date, taxes still are unpaid, counties initiate tax foreclosure proceedings. Foreclosure is the legal process by which a county acquires title to a property. The property then can be sold to satisfy the tax debt. If the property is personal property, taxes are delinquent immediately after any required payment is missed. Counties issue warrants for collection 30 days after delinquency and may seize the property for collection at any time after delinquency.
As taxes are collected, the county treasurer makes periodic distributions of the money to the taxing districts. No property tax money goes to the state.
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| Disabled & Senior Citizens |
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Property Tax Deferral for Disabled and Senior Citizens
Low and moderate income Oregonians over the age of 62 or those who are disabled who meet certain qualifications can defer paying property taxes on their residences. See your county assessor for details and applications.
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