Portland Property Taxes Higher than Ever – 2021
Portland passed three new ballot measures this November that will increase property taxes in the city. But even if these measures had failed, property taxes would still go up for homeowners in the Portland metro region, because of the way our tax system is structured. A new report shows that Portland was #5 in the nation for highest property taxes (before this tax increase), but the reason has as much to do with home value assessments as it does the new bonds and levies. It will be interesting to see how Portland ranks in 2021 – will it have the highest property tax rate in the nation?
Why do Portland property taxes increase every year?
Property taxes are calculated by multiplying the assessed value of a home by the current going tax rate, which varies by county and city. In Oregon, the assessed value of a home for tax purposes is not its current market value. Instead, assessed value is calculated by taking the value of the home in 1995, and adding 3% for every year that has passed since then. This results in a much lower assessed than actual value for Portland property taxpayers, unless their home was built after 1995. Although these homes are also assessed at a reduced rate, they do tend to have a higher assessed value than similar homes that are older. As more new homes are added to the housing mix, the overall property tax rate also increases. For more, check out this Q & A from Oregon Live.
Where will my Portland property taxes go in 2021?
Portland property tax payers fund everything from regional water quality to affordable housing. In November 2020, three new measures were voted in that will be funded by property taxes. They are:
- Measure 26-213, which will fund parks and recreation. The five-year tax levy will allow Portland’s Parks & Recreation Bureau to safely reopen community centers, pools, and rec programs in the wake of the pandemic, and funds programs for low-income youth as well as parks maintenance. The measure will add $0.80 of property tax per $1,000 assessed property value.
- Measure 26-211, which creates a Multnomah County library bond. Funds will go toward expanding and renovating eight existing libraries, building a new “flagship” library in East Portland, and other facility upgrades. The bond will be funded by a $0.61 property tax increase per $1,000 of assessed value.
- Measure 26-215, a Portland Schools bond. Funds will go toward replacing and renovating four schools in Portland School District, adding capacity for alternative schools, creating a culturally-responsive community plan, improving schools in North/Northeast Portland, and adding security and seismic safety improvements across the district. The bond will cost property owners $2.50 per $1,000 of assessed value; however, because a similar bond was passed in 2017, this is not an increase over what Portland property owners are already paying toward Portland school bonds.
Portland Property Taxes #5 in the Nation – BEFORE the 2021 Rapid Increase
A Lincoln Institute study found in June of 2020 that Portland pays the #5 highest property tax rate on a median-valued home: 2.46%. The #1 city on the list was Aurora, Illinois, with a 3.3% rate, and the city with the lowest property tax rate was Honolulu, where homeowners pay just 0.31%.
Will Raising the Cost of Housing Help a Housing Crisis?
Many wonder how increasing an already top 1% property tax rate will lead to more affordable housing and more housing. Portland needs both more affordable housing and more housing options in general. Significantly raising the cost of all housing in Portland, to many, seems counterproductive to the city’s housing goals.
Outside of the City of Portland and Multnomah County, homeowners can find a bit of tax relief. If you’re ready to make the move to any of our diverse Portland suburbs, contact our top 1% buyer’s agents today.November 20, 2020