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Understanding Portland Property Taxes

I’m researching property taxes for Multnomah County as I will probably appeal the values on our new project house. This is what I have found. The Exception below answers what sort of remodeling triggers a new assessment.

Each individual property is taxed on its assessed value. A property’s assessed value is the lower of its real market value or its maximum assessed value. Each year, the county assessor determines the property’s real market value and calculates its maximum assessed value. You are taxed on the lesser of the two, which is called the assessed value. Real market value and maximum assessed value are defined below

Real Market Value (RMV) is the value the assessor has estimated your property would sell for on the open market as of the assessment date. The assessment date for most property for the 2007–2008 tax year is
January 1, 2007.

Maximum Assessed Value (MAV) is the greater of 103 percent of the prior year’s assessed value or 100 percent of the prior year’s MAV. MAV may be increased above3 percent of the prior year’s assessed value if certain changes, defined as exceptions, are made to your property. MAV does not appear on most tax statements.

Exception means a change to property, not including general ongoing maintenance and repair or minor construction. Changes that could affect maximum assessed value include new construction or additions, major remodeling or reconstruction, rezoning with use consistent with the change in zoning, a partition or subdivision, or a disqualification from special assessment or exemption. Minor construction is defined as additions of real property improvements with a real market value that does not exceed $10,000 in one assessment year or $25,000 over a period of five assessment years. Exception value does not appear on your tax statement.

8 Comments on “Understanding Portland Property Taxes

  1. Useful thread, thanks. I’m still confused by RMV. What process, exactly, does the county assessor use to determine RMV? On Portlandmaps.com It is almost always 20-35 percent below what the ACTUAL listing price of a property is when it comes on the market. I’m happy about this, of course, but still would like to know how the county calculates the “estimated value” of a property.

  2. I think part of the reason for the descrepency is that properties only need to be reappraised by the county assessor within a 6 year window, so the last assessment could have been a while back.

  3. “I think part of the reason for the descrepency is that properties only need to be reappraised by the county assessor within a 6 year window, so the last assessment could have been a while back.”

    This might be true, but I’m referring to most recent county assessments of RMV done in 2007 and 2008. They are STILL 20-30 percent BELOW what properties lists for. And we both know that PDX real estate has not appreciated by 30 percent over the last 2-12 months.

  4. Well sold price would probably be a better comparison that list price, and I think 20 to 30 percent is stating it to way to high on average. I think the spread would be closer to 10 to 18 percent, although there are certainly cases where you see higher percentages. So a house appraised in 2007 would be as of January 1st. So in an area of town like N Portland, where according to the last Market Watch report from the RMLS, average year over year price appreciation is 8.2%, a 10 to 14 percent difference over the last 16 months isn’t so out of line. I would imagine the county assessors a little below the mark in their appraisals so they don’t wind up with an endless line of appeals every year. Considering most homes are being taxed on MAV, there doesn’t seem to be much incentive for them to push the envelope on RMA either.

  5. Called Multnomah County T&A office today to clarify what I thought (wrongly) were high taxes for the property. There are two systems for coming up with the dollar amount. You pay the lowest of the two:

    Measure 5 says $15 per $1000 of RMV (Real Market Value).

    Measure 50 says the Tax Assessed Value times the mill rate for the area you are in (not sure where the mill rate is published and didn’t think to ask). In our case, the TAV multiplied by the mill rate (to 4 decimals) is the taxed amount to the penny.

  6. So what made you think the property taxes were high to beging with? Relative to other homes in the area? Condition of the house? Makes me wonder what they are going to shoot up to once the remodel is done?!!?

  7. It violates my totally unscientific (and apparently inaccurate) rule of thumb- expect about $1000 of taxes for every $100k of purchase (be happy if it is lower but figure out why if it is higher). That was my red flag. Going to amputate the thumbs now. Know a good nurse?

  8. Sure! And I have a reputation of giving A LOT of pain meds…a happy patient is a happy nurse;O) My rule of thumb.

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