A Homeowners Guide To Oregon Property Taxes
Oregon residents may not pay sales tax, but property taxes are fact of life for homeowners in the state. The good news is that it’s easy to pay your Oregon property tax. On top of that, these taxes help fund essential services in your local community. Let’s take a look at how Oregon’s property taxes are assessed and paid.
Property taxes are known as an ad valorem (“according to value”) tax. They are based on the assessed value of your home. Oregon defines your property’s assessed value as the lower of its real market value (RMV) or its maximum assessed value (MAV). It’s beneficial for homeowners to understand what these values are and how they’re calculated, but you don’t need to worry about actually doing the math yourself.
Real Market Value
Your home’s RMV is the price your property would sell for if you sold it on January 1, the assessment date for the tax year. County assessors calculate RMV by comparing sales of local properties that are similar to your own. So, if homes of comparable size and quality in your area are selling for more now than they were the year before, you can expect your RMV to go up.
Maximum Assessed Value
MAV is a taxable value limit established for each property by Oregon law. Your MAV is the greater of 103% of the prior year’s assessed value or 100% of the prior year’s MAV. MAV is unique to Oregon’s property tax system and was created to ensure that a homeowner’s tax burden doesn’t rise more than 3% in a given year.
The property tax rate is determined at the county level. Your local tax office will take your assessed value and multiply that by your area’s tax rate. On average, counties in Oregon collect 0.91% of a property’s value in taxes each year, though this can be higher or lower depending on where you live. At that rate, if your home is valued at $250,000, you would owe about $2,275 in taxes per year.
How to Pay Your Taxes
In Oregon, county governments are responsible for collecting property tax. Depending on your circumstances, you can pay your property taxes in one of two ways:
Monthly Mortgage Payment
Your monthly mortgage bill includes your property taxes as a built-in part of your payment. To ensure accurate payments, your loan servicer will estimate your tax bill, divide it by 12, then add that amount to your other mortgage costs (i.e., principal and interest). They put this money into an escrow account, and when your annual property tax is due, they pay the bill on your behalf with those funds.
Your Local Tax Office
When you pay off your mortgage in full, you also take over responsibility for ensuring your property tax gets paid in full and on time. The bill for this tax will come from your county’s tax office to your home, making it easy for you to pay off the balance. Each county’s instructions are different. Some counties allow you to split your payment up into monthly, quarterly, or biannual payments, or offer discounts for paying early.
Regardless of where you live in Oregon, you’ll want to keep the following dates in mind so you can be prepared to receive and pay your property tax bill:
- July 1 – the beginning of the fiscal year
- October 25 – you’ll receive your bill by this date
- November 15 – the date your first payment is due
These dates are set at the state level, meaning they apply across every county. Knowing exactly when your bill will arrive and need to be paid makes it easier to save money throughout the year so you don’t have to pay a large lump sum all at once.
How Does My Community Use Property Taxes?
Oregon’s property tax system is one of the most important sources of revenue for local governments across the state. Your property taxes directly support a wide variety of public services, including parks, EMS, and schools. Paying taxes isn’t necessarily fun, so it can be helpful to think about all the services and amenities you get to enjoy in return. These amenities build value in your community. In turn, this makes your home’s value rise. In many ways, you can see your property tax as an investment in your local community that can bring about financial benefit for your family.