How property taxes work in Oregon
The property tax system is one of the most important sources of revenue for more than 1,200 local taxing districts in Oregon. Property taxes rely on county assessment and taxation offices to value the property, calculate and collect the tax, and distribute the money to taxing districts. We provide support and oversight to counties to ensure uniformity and equity in property tax administration.
Appraisal is the process of identifying taxable property and assigning a value to it. County assessors appraise most Oregon property. The Department of Revenue appraises certain large industrial sites and utility properties. The value of property is determined as of January 1 of each year.
Property subject to taxation includes all privately owned real property (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 or orchards.
- Business inventories.
- Certain intangible property.
Personal property assessments
All personal property must be valued at 100 percent of its real market value unless otherwise exempt (ORS 307.020). Personal property is taxable in the county where it's located as of January 1 at 1 a.m.
Personal property is either tangible or intangible. Intangible personal property is not taxable, and tangible personal property may or may not be taxable. Examples of non-taxable personal properties:
- Inventories that are held for sale in the ordinary course of business.
- Household goods, furniture, clothing, tools, and equipment exclusively for personal use in your home.
- Farm machinery and equipment (ORS 307.394).
Taxable property includes machinery, equipment, furniture, etc., used previously or presently in a business. Each individual, partnership, firm, or corporation that has taxable personal property must file a return by March 15. The return must contain a full listing of all assets, date of acquisition, cost, and a statement of real market value. This listing must include items that have fully been depreciated, in storage, or expensed. It's the taxpayer's responsibility to obtain a copy of the return and file. The information on the return is a confidential record in the office in which it's filed. The return assists the assessor in determining the value of the property.
If the assessed value of your taxable property is less than $17,000, the assessor may cancel the tax assessment for that year, but you must still file a return each year.
All returns that are filed late receive a penalty. The penalty is a percentage of the taxes and is 5 percent, 25 percent, or 50 percent depending on how late the return is filed.
You'll receive a tax statement after October 25 showing the value of the personal property, the amount of tax due, and any late filing penalty.
Taxing districts subject to Oregon's Local budget law prepare their budgets for the coming fiscal year. During this process, the budget committee and governing body determine the amount of property taxes the district needs to support the budget. Public meetings are held to gather community feedback.
Taxing districts have constitutional and statutory limitations on the amount of taxes they can impose:
1. Taxes under a taxing district's permanent rate limitation. Once a permanent tax rate limit is established, it can't be changed by any action of the district or its patrons. The Legislature can add additional, lower statutory limits. New districts, or districts that haven't levied in the past, can ask voters to choose a permanent rate limit for the district. A permanent rate limit is the tax rate per thousand dollars of assessed value. A local taxing district can only have one permanent rate limit.
2. Taxes from a taxing district's local option tax authority. Most taxing districts can ask voters for temporary taxing authority above the permanent rate limitation. This is known as "local option tax." Local option taxes are limited to five years for operation and 10 years for capital construction purposes.
3. Levies for bonded indebtedness. Most taxing districts can ask voters 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. Proceeds from a bond levy can't be used for a purpose other than the one stated in the ballot measure approved by the voters who authorized the bonds. Voter-approved bond levies used for capital construction aren't subject to Measure 5 property tax limits.
The county assessor places the taxes certified by the taxing districts on the tax roll in the fall of each year. 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 certified a dollar amount tax levy, such as a local option tax or bond tax, the assessor must calculate a tax rate. To compute a tax rate, the tax levy amount is divided by the taxable assessed value of the property in the district. This tax rate is placed on the individual property tax accounts in the district.
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 the property is located and then adding any assessments.
Taxable value limitation
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). MAV can't increase by more than 3 percent each year, unless there are changes to the property, such as the addition of a new structure, improvement of an existing structure, or subdivision or partition of the property.
Each year the MAV and RMV for each property tax account are calculated. The property is then taxed on the lesser of these two values, which is called the "taxable assessed value."
The constitution limits the amount of property taxes that can be collected from each property account. To calculate these limits, taxes are divided into education and general government categories.
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, other taxes in the category are proportionally reduced.
These limits are based on the RMV of the property, not the taxable assessed value.
Paying property taxes
Property taxes are paid to the individual counties. Contact the county assessment and taxation office in the county where your property is located for more information.
You have the right to appeal if you feel the county assessor has estimated the value of your taxable property incorrectly. The appeal is to the county Board of Tax Appeals and must be submitted by December 31. You do not need to be present to have your complaint heard.
Find out how to appeal your property value.