A few days ago, I went to a class given by Deschutes County Assessor Scott Langton, and my head still hurts. Langton had the thankless job of explaining the latest changes to the 2012-13 property tax statements. (By the way, if you haven’t yet received your statement, you will soon — they were mailed on Friday.)
As Langton was quick to point out, Oregon has one of the most complicated property-tax structures out there. So even if there weren’t any changes this year (and there are), it’s no mean feat for the average Oregonian homeowner to decipher how their property taxes are calculated. Because our real estate market has been so volatile in the past few years, there are some significant changes that could affect your property taxes this year and/or in the coming years.
One change that folks who are familiar with reading tax statements will notice is the inclusion of Maximum Assessed Value (MAV). In the past, our statements have noted the property’s Real Market Value (RMV) and its Assessed Value (AV). On the new statement, however, you’ll see all three values. Why? We’ll get to that in a minute.
But first, what do the numbers mean? This is where things get complicated. Each year, the county assessor determines the property’s real market value (RMV) and calculates its maximum assessed value (MAV). Property owners are then taxed on the lesser of the two, which is called the assessed value (AV). (Here’s the Department of Revenue’s official explanation of RMV, MAV and AV.)
Because the state law passed in 1997 that created “Maximum Assessed Value” also limited the annual increase of MAV to 3 percent, the assumption has been that no Oregonian’s property tax would ever increase more than 3 percent per year (unless there are significant changes to the property). And as long as property values continued to increase, that was the case. Then the recession hit, and property values began to decrease. Now, in many cases, the real market value of a property is lower than the maximum assessed value, so the RMV and AV are the same. (In fact, Langton said, in 83 precent of the Redmond tax accounts, the RV is below the MAV. In 51 precent of the Bend tax accounts, the RV is below the MAV. And in 45 precent of the Sisters tax accounts, the RV is below the MAV.)
Consequently, as the real estate market improves and values begin to increase again, it will be possible for the assessed value to increase more than 3 percent (and in some cases, much more).
See the chart below (which Langton provided) for an example of how that might work:
Still confused? You’re not alone. That’s why the Assessor’s office has scheduled several Town Hall meetings, during which they’ll explain how the appraisal process works and will answer questions.
Here’s the schedule:
Think you might have a case to appeal your property taxes? Then don’t hesitate to contact the Assessor’s Office (541-388-6508). In some cases (if you can provide credible evidence the the RMV of your property is less than what is listed on your tax statement, for example), you might not even have to go through the appeal process to reduce your tax rate.
If you’re not sure whether to appeal, here’s a blog post explaining how the appeal process works (it’s simpler than you might think).
About the Author
Lisa Broadwater, GRI, CDPE, is a Central Oregon-based real estate professional who specializes in listing and selling homes, especially in Sisters, Tumalo, Bend and Redmond.