Oregon has one of the most complex tax systems in the country. Still, a careful look each and every year of your tax bill can pay solid dividends in the future. A review of your tax bill will help you decide if you need to appeal your taxes.
1. Compare values from Last Year to This Year. Check RMV.
There are two values on your tax statement. The first is RMV - Real Market Value - and that is the County Assessor’s office’s estimate of the actual value of your property. The this year value should be at or close to what you paid for the property last year. If it is higher than your purchase price you have basis for an appeal.
2. Did your Assessed Value go up by more than 3%?
The second is Assessed Value. This is the lower of the RMV or the Maximum Assessed Value based on Measure 5. It is the value in 1997 minus 10% of that value and +3% for every year after that. If you have had improvements that required a permit it is possible that you have a jump in your assessed value called “exception value”. If you don’t appeal the exception value in the year that it went up you can never appeal it again.
To make it more complicated there are two tax rates. The first is the Current Rate, which is usually the higher one, and applies to the Assessed Value. The Measure 50 tax rate is 2.1% of Assessed Value and includes the individual tax levies for Education, General Government and Bonds/Misc taxes. The second rate applies to the Real Market value and is limited by the Oregon Constitution. It is the Measure 5 rate and it is 1.5%. It is 0.5% for education, 1% for Government and whatever has been approved by the voters in the particular tax district for bonds, levies, etc. Your tax is the lower of Current Rate X Assessed Value OR Measure 5 rate X RMV. The calculation is done independently for each of the three categories of levies.
3. Why appeal if your RMV is less than your Assessed Value?
When values drop the county uses RMV as the basis for the reduction. It should be close to what your property is worth on the open market. Since values are now at another historic low you want to reset the number to at least the value of the property on January 1 of last year. That is the day the tax values are set in stone. If it is still more than you paid you will want to be prepared with that information. Because this is the basis for all the education, government and bond issue assessments too a drop in value here has a greater effect.
Your first step is to appeal to the County Board of Property Tax Appeals. The deadline is December 31 and there is no filing fee. The board will consider your case and make a decision. The Board can only lower values. If you do not agree with the Board decision you can appeal to the Magistrate Division of the Oregon Tax Court. There is a $240 filing fee, and the value of the property can go up or down. The process is still somewhat informal and there is the availability of mediation. If you are still dissatisfied it becomes eligible for a formal decision in Oregon Tax Court.
The main thing to remember is that your property taxes are not set in stone, and errors do happen. What could be a clearer real value than the actual price you paid for your home? There is a process in place, and if you think you need professional help I will be glad to recommend a tax consultant.