'Tis the season of too much Halloween candy and Property Tax bills. I can’t help you with the candy part but will try to address some of the frequently asked questions related to the recent tax bills.
Oregon has a somewhat complicated process for determining taxes on real property. This is mostly due to a combination of tax limitation measures voters have passed and subsequent legislative actions that clarify or adjust the tax code to account for what we’ve voted in. Although the Counties collect taxes, tax policy is set by the State.
The most common misconception is that taxes themselves can only go up 3% a year. This is not the case. Your home’s Assessed Value, which is used to set the taxable amount, can only go up 3% a year but when we vote for bonds to build schools, fix infrastructure or buy land, those costs are incorporated into our tax rate before it is multiplied by the assessment. This year, that additional amount was larger than normal and has caused a lot of confusion.
Bottom line, we are taxed on the lower of these 2 values:
Assessed Value (which was set in 1997 at the tax value of your property in 1995 minus 10%) times your tax rate*. The assessed value is only allowed to rise 3% per year unless the property changes (eg: remodeling and/or additions).
Your Real Market Value multiplied by the Measure 5 limits of $5 per $1000 for Education taxes and $10 per $1000 for General Government taxes. This amount is then added to the amount for items that are excluded from the Measure 5 limits, such as bonds.
*You can find your tax rate by looking at your tax bill and finding your levy area code at the top and looking at this nerdy tax spreadsheet to find your total tax percentage.
For many of us, the Assessed value calculation is lower than the 1½% of Real Market Value calculation because the assessed value of our property is much less than the Real Market Value. But where Real Market Value and Assessed Values are close in amount, it is possible that this will cause the second formula to be enacted.
If you believe that your Real Market Value is too high and that there may be a case for appealing, you can appeal yourself or engage a tax appeal company. There are companies that will review your tax bill at no cost to see if there may be a case of over taxation. Keep in mind that in the appeal process you would have to show that the actual market value as of January 1, 2017 was low enough so that 1½% of that would be less than what you are paying for education and general government services. Call me for details.
For more information on taxes check out the following websites: