Oregon voters have shaped a property tax system meant to be predictable.
And while the result is a convoluted arrangement widely misunderstood and far from equitable, it is indeed predictable: most homeowners will see their property tax bills go up this year as a result, at least by a few percentage points.
That’s not directly tied to the recent run-up in home prices, however. Property taxes in Oregon are mostly decoupled from year-to-year changes in property values — except for a voter-approved cap on taxes as a proportion of real market value. (Like we said, it’s complicated.)
Property tax statements for some counties are in the mail now, and each Oregon county must mail them before Oct. 25. Payment, or a first installment, is due Nov. 15.
Here are the most common reasons your property tax bill is going up.
Annual increases are baked in.
Back in 1997, a ballot measure approved by Oregon voters separated taxes from the real, current values of homes. Instead, it pegged taxable values to 1995 levels, plus 3% each year.
As a result, if tax rates stay the same, most homeowners can expect a 3% increase in property taxes each year -- even in a year when their home value might not have climbed by that much.
But property owners don’t share the benefits of that ballot measure equally. Learn how they changed your tax bill over time.
Renovations can trigger a reassessment.
Any work valued at $10,000 in one year or $25,000 within five consecutive years can trigger a new assessment and increase your property’s taxable value. This can include improvements made in previous years that county assessors missed at the time.
If you think your new assessment overvalues your new improvement, however, now’s the time to contact the county assessor or file an appeal. You probably won’t be able to dispute your tax bill in future tax years.
Voters approved new bonds and levies.
If voters agreed to a new levy or bond, you’re going to see that reflected in your property tax bill (regardless of how you voted).
Across the Portland area, for example, property owners within the Metro regional government’s boundaries will see an increase in collections resulting from an affordable housing bond approved by voters last year.
If your tax bill goes down, on the other hand, the most likely reason is the expiration of a bonds and levy.
Your property tax relief is running out.
Before voters placed a limit on how fast a property’s taxable value can grow, they put a cap on property taxes as a proportion of real market value as determined by the county assessor.
As a result of a 1990 ballot measure, a given property can be taxed only $10 per $1,000 of its real market value for general government and $5 per $1,000 of market value for schools. (Certain temporary levies and bond measures are exempt.)
If you hit that cap, you’re paying less than you would have if the measure never passed. Congratulations! That’s what assessors refer to as being in tax “compression.”
But if a property’s market value rises quickly, the cap can rise just as fast — much faster than the 3 percent a year homeowners might expect. And market values have risen quickly in recent years across much of the state.
-- Elliot Njus
enjus@oregonian.com; 503-294-5034; @enjus