Most sensible people would think that as home values decrease their property tax bills should too. Unfortunately, this is not often the case. In most cases, property taxes will increase in 2012 regardless of any real market value decline of their property.
While market decline may reduce a property’s real market value property taxes are based on the assessed value of the property. In most cases, assessed values are significantly lower than the market value. Taxes will only be reduced if real market value falls below assessed value. Taxes are based on the lesser of the two amounts.
Passed by Oregon voters in 1997, Measure 50 increased the predictability of tax rate increases with slow steady growth in property taxes, reducing the influence of sharp fluctuations in market values. Conversely, under this system, taxes are far less likely to decrease when property values fall.
Real market values represent the estimated sales price of a property as of the previous January 1st. Market values in a few neighborhoods increased last year while most remained static or saw a slight decline.
Measure 50 provided that the assessed value shall increase 3% each year, with some exceptions. Exceptions include addition of a new structure, major improvements to an existing structure or subdivision/partition of the property.
In addition, taxes increase when new bonds or levies are approved by voters. For most Oregon property owners, property taxes will continue to increase 3% annually plus any bonds or levies approved in their tax district minus any expiring bonds or levies.
I invite you to contact me if you have any property tax questions. If you find that your property’s assessed value is MORE than the real market value you should appeal to reduce your taxes with the county. I’d be happy to act as a resource and help you each step of the way.