It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.
Oregon’s property tax system changed dramatically in 1997 with the passage of Measure 50. Since that time, taxes imposed upon real estate are calculated by applying a tax rate limit to the assessed value of a taxpayer’s real property. The tax rate is permanent or “fixed,” with the exception of certain bonds measures specifically passed by the voters in the district. As will be explained below, the assessed value to which the tax rate is applied may or may not equal “real market value” (the value the real property could be sold on the open market). Additionally, the assessed value of real property faces annual growth limits of three percent. That is, with some exceptions, your assessed value for the current tax year should be no more than three percent higher than last year’s assessed value.
To determine the assessed value of real property for the current tax
year, the assessor must determine two values: one, the real market
value and, two, the maximum assessed value. The county assessor is
required to use the lower of the two as the assessed value of the real
property as of January 1 of each year.
The real market value of real property is estimated by
a recent sale of the property or by an appraisal of the property conducted
by the county assessor, or the Department of Revenue in the case of
certain industrial or centrally assessed property. The appraisal method
used depends upon the nature of the property. Residential property
and bare land are most often appraised by comparing sales of similar
property. Income-producing or commercial property may be valued by
more complicated appraisal techniques. Between reappraisals of property,
the real market value of real property may be adjusted each year based
upon sales ratio studies conducted by the assessor to reflect increases
or decreases in the value of different classes of property. This is
called “trending.” Taxpayers
receive notice of any change in the real market value of their real
property on their annual property tax statement.
With some exceptions, the maximum assessed value of real
property can be no more than three percent higher than the previous
year’s
assessed value. If real property was not in existence the previous
year — such as when a new house is built or property is rezoned
or subdivided — the maximum assessed value of the newly constructed
property is determined by multiplying the real market value of the
property by a ratio of the average maximum assessed value over the
average real market value of all property located in the same area
and within the same property class.
In no event may the assessed value of your real property
appearing on your property tax statement exceed the property’s
real market value. The market value is the price at which the property
could be sold on the open market between a willing buyer and a willing
seller. Therefore, if you just purchased your property and your purchase
price was below the assessed value, or if, for other reasons, you believe
your property has been over-assessed, you should take the following
steps:
First, discuss the valuation with your county assessor’s
office after you get your tax statement. This not required to protect
your appeal rights, but the assessor may unilaterally reduce the assessed
value on the tax roll if presented with persuasive evidence that the
assessed value is incorrect. Additionally, you should review the appraisal
records on file with the county assessor. These are public records,
which you are entitled to request. Review the appraisal records on
your property to determine if any errors appear, such as wrong square
footage or the wrong number of bedrooms, bathrooms or fireplaces. Errors
in appraisal records do occur and are seldom discovered by taxpayers.
If your assessed value was trended upward based upon
a ratio study of sales of property similar to your own, ask to review
the study. You can verify the sale prices of the other properties,
and the properties themselves, to determine whether they are truly
comparable to yours. Factors to consider are zoning, location, lot
size, street frontage, depth of lot, sewer and utility hookups. This
information is also a matter of public record and can be obtained from
the county assessor’s
office or the county recorder’s office. Most real estate companies
also keep a record of all recent sales in the area and will have information
concerning the condition of the properties sold.
Second, if you believe the assessed value of your property
is incorrect, you may appeal to the county Board of Property Tax Appeals
(or “BOPTA”).
The petition form can be obtained from your county’s BOPTA, the
county assessor’s office, or the office of the county clerk.
The deadline for appealing the assessed value of real property is December
31. Your appeal rights beyond the county board of property tax appeals
may be lost with respect to the tax year in question if you do not
properly file a timely appeal to the board. Certain industrial property
owners whose property is assessed by the Oregon Department of Revenue
may file directly with the magistrate division of the Oregon Tax Court
without filing with the board of property tax appeals Such appeals
must be filed no later than December 31.
You may choose to make a personal appearance before the board of property
tax appeals, or submit the written information with your petition.
From a practical standpoint, the chance of a favorable result from
the board is increased if you personally appear at the BOPTA hearing.
Also, you may have a representative, such as a licensed appraiser or
lawyer, assist you in the presentation of your evidence.
Whether you choose to appear or not to appear at the
proceeding before the board of property tax appeals, you must submit
evidence to support your opinion as to the value of your property.
This evidence could include an independent appraisal report, a comparison
of your property with similar properties and the sale prices of those
properties, or the recent purchase price of your property. The board
must consider your evidence and the evidence submitted by the county
assessor to determine if the values placed on the tax rolls should
be reduced for the current year. The board does not have the authority
to increase the values on the tax rolls. You will be notified of the
board’s]
decision by mail.
Third, if you are not satisfied with the values determined
by the board of property tax appeals, you may appeal the board’s
decision to the magistrate division of the Oregon Tax Court. Your appeal
must be filed within 30 days (not one month) of the date of
mailing of the notice of the board’s order to the taxpayer.
For appeals to the magistrate division, first, you will be notified
of a case management telephone conference with the magistrate and the
county assessor to discuss the dispute. At this initial meeting you
can request time to exchange additional information, or request court-assisted
mediation. This mediation is a formal settlement discussion with the
county assessor presided over by one of the magistrates. If mediation
is unsuccessful, a trial will be held by telephone or in the Oregon
Tax Courtroom. Trials can be held with the consent of the court and
parties in the county where the property or parties are located. Proceedings
before a magistrate are informal. You may represent yourself or choose
to be represented by an attorney, accountant, licensed tax consultant,
or licensed real estate appraiser or broker. You and the assessor will
be given an opportunity to submit written and oral evidence upon which
a decision will be based.
If you disagree with the decision of the magistrate division, you have
the right to appeal to the regular division of the Oregon Tax Court.
Also, if the assessor or the Oregon Department of Revenue is not satisfied
either, the assessor or the Department of Revenue may appeal to the
regular division of the tax court. To appeal to the regular division
of the tax court one must file a formal complaint with the clerk of
the Oregon Tax Court within 60 days (not two months) after the date
of the mailing of the written decision of the magistrate.
In the regular division of the tax court, the appealing party, whether
it be the taxpayer, the county assessor, or the Department of Revenue,
is the plaintiff. The party not appealing is the defendant. The plaintiff
carries the burden of proof. This means the appealing party must prove
his or her proposed value is correct by a preponderance of the evidence.
(When weighing the evidence, the scales must tip slightly toward the
plaintiff as having produced more convincing evidence as to value than
the evidence produced by the defendant.)
A trial held in the regular division of the tax court
is a formal proceeding to which the rules of evidence and civil procedure
are applicable. New evidence not presented at the hearing in the magistrate
division may be introduced by either party at trial. You may represent
yourself or you may be represented by an attorney. The county assessor
will be represented either by county counsel or a lawyer from the attorney
general’s office. If you disagree with the decision of the regular
division of the tax court, you may appeal to the Oregon Supreme Court.
In some limited situations, valuation changes for residential
property may be made by the tax court for not only the current tax
year; but also for either of the two years immediately preceding the
current tax year — if it is determined by the tax court that
the difference between the real market value of the property for the
tax year and the real market value on the tax roll for the tax year
in question is equal to or greater than 20 percent. Also, for residential
property the tax court may order a change or correction of the two
tax years immediately preceding the current tax year if you have no
statutory appeal rights remaining and the court determines that good
and sufficient cause exists for your failure to pursue the statutory
right of appeal in a timely fashion.
For more detailed or specific information on property tax assessments and appeals, contact your county assessor’s office, the county board of property tax appeals, the Oregon Department of Revenue, or the Oregon Tax Court. You may obtain a copy of a helpful booklet entitled “Presenting Tax Appeals to the Oregon Tax Court Magistrate Division” by contacting the magistrate division at (503) 986-5650 or visiting the court’s website: http://courts.oregon.gov/Tax/index.page?.
Legal Editor: Jill Tanner, January 2009