You know that fall is in the air when the leaves are turning color and your tax bill is about to arrive in the mail. So it seems appropriate that I share some information that may be of help with your tax bill.
The tax year in Oregon runs from July 1 to June 30. Taxes are due on November 15. So when you pay your property taxes you are paying back to July 1 and ahead to June 30. That in and of itself is confusing because it doesn’t correspond to the calendar year.
Coming out of the recession weary 1980’s, Oregon’s real estate boomed. We had year-over-year property value growth. With no caps on tax assessment, people would receive their property tax bill in October and find the tax amount due had increased 10-20%. This was a huge burden and an unexpected expense that had to be paid. It lead to a series of ballot measures put before the people of Oregon to address this problem. In 1996, ballot measure 47 was passed.
Ballot measure 47 restricted the annual rate of tax increase to not more than 3%, plus any bond measures that were voted on and approved by the community. The exception to this is significant remodeling that changes the property.
The sale of a house does not trigger a new assessment. The tax rate remains on the property when it is transferred to a new owner, and is subject to the same 3% annual limit.
Move forward from 1996 and property values changed significantly. We had years of appreciation in property values that were in the double digits year after year. Real market values increased at a rate significantly greater than 3%.
When you get your property tax bill, you will see two valuations. One is what the county tax assessor thinks your real market value currently is (what your house would sell for today). And one is the current value that your tax bill is assessed at. As long as the market value is greater than the assessed value, your taxes will go up. The increase limit is 3%. This is why your tax assessment goes up even though you know your property value has gone down. This will continue to happen as long as your market value is higher than your assessed value.
If you think your assessed value is higher than your market value, there is a process you can go through to appeal your taxation and potentially reduce your property taxes.
Contesting your property taxes
To appeal your property tax bill, you need to submit a petition to the Clackamas County Board of Property Tax Appeals between October 25th and December 31st. This window of time is the only time an appeal can be made. If you don’t do it on time, you have to wait until next year.
Once you have submitted your petition, you will be given the opportunity to appear before the appeals board sometime starting in February, but not later than April 15th. At your hearing you will have 15 minutes to present your evidence. Evidence can consist of the following:
A professional appraisal
Your testimony and testimony of witnesses you bring with you
Physical evidence such as photos, maps, graphs, and documents
The paperwork from your recent purchase of the property
Recent sales of comparable properties
At the hearing you need to be prepared and concise. The Board will attempt to make a decision at the hearing, and a written decision will be mailed to you in about 3 weeks.
I attended a class on the tax appeal process last winter. The class was taught by a man who had served on the Appeals Board. He brought up a case as illustration of the process. It happened to be a condominium where my 82 year old mother currently lives. The condominium complex, in Lake Oswego, had been an apartment conversion in 2007. The entire complex was remodeled. With beautiful units, right on the Willamette River, the condos sold on the high-end of the condo market. Well, we know what has happened since then. Those condos have lost more in value than the average home. One of the unit owners successfully contested their taxes and reduced them. A discussion took place, which was now shared with the people in the class I was attending, that perhaps the tax assessor should reduce the taxation throughout the complex (benefiting perhaps 100 home owners or more). The decision? No. Each unit owner would have to bear the burden of individually contesting their taxes.
Needless to say, I am going to be working with my Mom to appeal her taxes this year.
Would you like to appeal your taxes? Click here to get started.
If you would like me to run some comparable sales for you, I am happy to help. Disclaimer: I am not an expert on the appeals process and I will not do the appeal for you. But I can at least point you in the right direction. Drop me an e-mail at firstname.lastname@example.org and tell me about your house. I will run a quick property search for comparable sales in your neighborhood and send them back to you. This will help you to know if you should do an appeal or not. And you can use the comparables at your hearing if you decide to pursue the process.
Wish me luck with helping my Mom. I’ll let you know next spring if we are successful.