Portland Property Tax is Going Up in 2017
This fall, at least two measures going on the ballot for Portland voters seek to raise funds through property taxes. Let’s take a look at how Multnomah County (where most of Portland pays its property tax) calculates how much you’ll owe, and what the measures might mean for the average Portland real estate owner.
How Portland Property Taxes are Calculated
Real, Assessed or Maximum Tax?
According to the Multnomah County Assessor’s Office, property taxes are calculated two ways:
“1. Your Assessed Value is multiplied by the tax rate for your code area, and any Special Assessments are added.
2. Your Real Market Value is multiplied by the Measure 5 limits of $5 per $1000 for Education taxes (or .005 x RMV) and $10 per $1000 for General Government taxes (or .010 x RMV). This amount is then added to the amount for items that are excluded from the Measure 5 limits.”
After performing these calculations, the County picks which ever is lower, and taxes are assessed based on that method.
Some Tax Definitions
Real Market Value is fairly straightforward. Basically, it’s the value a county Assessor decides a buyer would pay for your home were you to put it on the real estate market today.
Assessed Value is where it gets a little more complicated. The Assessed Value might just be the same as the Real Market Value. Unless Maximum Assessed Value is lower.
What’s Maximum Assessed Value? Here’s where another measure passed by the voters comes in. Measure 47/50 states that the assessed value of a given piece of property cannot increase by more than 3% a year from its 1995 assessment, no matter how much the actual value of the property has gone up. Maximum Assessed Value imagines that property values have only gone up 3% each year since 1995. If that’s less than the current Assessed Value, then that’s the amount that will be used to calculate your property taxes.
Yes, it’s confusing. The good news is, the Multnomah County Assessor’s office knows that people are going to need help with this — and they’re more than readily available to help.
First, try TaxGraph
TaxGraph is the County’s free tool that can be used to look up property tax and assessment history. It’s easy to use and a great place to start.
First, enter your address or property ID. This will bring you to a page where you can see a history of your property’s taxes (this works great for real estate that you’re considering buying, too).
As the name promises, this information is provided as a graph. In fact, you’ll get a couple of graphs! The first shows Real Market Value, Assessed Value and Maximum Assessed Value. The second shows the tax history for a property.
Does Tax Graph indicate what this year’s taxes will be?
Not at all. Your property taxes might be calculated a different way this year.
According to the Multnomah County website, “If your previous year’s Real Market Value was lower than your Maximum Assessed Value and now your Real Market Value is more than your Maximum Assessed value, you may see a jump in your Assessed Value.”
You can look up your current property value at www.MultCoPropTax.org.
It’s as easy as using the live chat service on the Multnomah County website, or calling: 503-988-3326
Or emailing: email@example.com
Property Tax Increases Up for Vote
The complicated nature of Portland’s property taxes are a classic example of Oregon compromise. In our diverse web of people who live, work and own real estate here, there are those who would rather not pay taxes at all, and go without a certain level of public services. Then there’s the other end of the spectrum – those who don’t mind paying a little (or a lot) extra on their property taxes so that schools, transportation, fire districts, etc. can have all the funding they need.
The compromise has been the “compression” system put in place by Measure 5 several years ago. This limits education taxes to $5 per $1000 of real market value, and and $10 per $1000 for general government taxes.
The result of this compromise is that sometimes homeowners with more expensive properties end up paying less in property taxes than those who own less expensive properties! In fact, a 2014 study even indicated that Portland homes in “compression” were selling for more than homes with a higher tax assessment.
Portland Public Schools Bond
For those property owners aren’t in “compression”, the Portland Public Schools bond measure might get you a little closer. The district is asking voters to approve a $750 million construction bond. According to Oregon Live, it would be the largest bond any local government has put on the ballot in state history.
“If voters say yes again, the school board would use the money to rebuild Lincoln High and Madison High, to refresh Kellogg Middle School so it can reopen to students, and to carry out about $300 million of environmental improvements to many schools.”
For the real estate market, this could be good news. Once construction is complete, Portland neighborhoods that were previously ranked low for school quality might just get a leg up – in my experience as a real estate agent, a safe, well built and well performing school is a definite asset to any home going on the Portland real estate market.
The bond is expected to increase Portland property taxes by about $1.04 per $1,000 of assessed property value per year.
With a slightly lower price tag, this bond measure subsidizes about $250 million of housing for low-income Portland residents. Like the Schools measure, it sets a record: if passed, it would represent the single-largest financial investment in city history for affordable-housing construction, according to Oregon Live.
This bond is seen as key to Portland’s housing future. Combined with efforts by lawmakers to require affordable apartment units in new developments, and Portland’s recent commitment to using urban renewal funds for affordable housing, we might see some new real estate open up in the metro area.
Regardless of what happens with Portland property taxes, your local Portland real estate team will be here for you. Let us know if we can help.
P.S. Be sure to read our updated article on Portland property taxes going up again in 2018.September 30, 2016