Property Q&A in Portland>Question Details

David Cole, Home Buyer in Portland, OR

How is the assessed value of a brand new home determined (Portland, Multnomah County, OR)?

Asked by David Cole, Portland, OR Sat Jan 15, 2011

The listing for a new house that I'm considering says that the taxes for 2011 are based on the land only. My agent tells me that next year the taxes will be levied on the land plus the house. The house is listed for $325K. Is there any way I can get an idea of how much the taxes for the next year will be? Does it depend on how much I pay for the house? The appraised value of the houses in the neighborhood (which are all much older)? I expect taxes in general to rise next year, but I'd like to have a ball-park idea before I proceed.

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The assessed value of a new home is determined by the Real Market Value (RMV) of the home multiplied by the Changed Property Ratio (CPR) to adjust the home back to what it would have been worth in the 1995 - 1996 tax year, per Measure 50. The assessor calculates the CPR by dividing the average Maximum Assessed Value of all unchanged properties in the same area and property class by the average RMV of all the unchanged properties in the same area and property class.
I am familiar with the CPR of Washington County which I am estimating (guessing) to be .60 this year for your class of property. I am not familiar with Multnomah Counties numbers, but I don't believe they would be much different. So your assessed value would be $325,000 X .60 = $195,000. Your property taxes would be based on the taxes for your neighborhood times $195,000. This is just an estimate and is not meant to be financial advice. The Multnomah County Assessor is the authority on this issue.
Property taxes can only increase 3% of the assessed value each year, so it is important that the base year be established as low as possible, because it is unable to be changed in subsequent years.

I am the Chairman of the Washington County Board of Property Tax Appeals and I have a good understanding of property tax issues.
Web Reference: http://tigardorhomes.com
0 votes Thank Flag Link Sun Jan 16, 2011
Wouldnt it be easier to go to the tax office or assessors office and ask them? They are the ones to assess the home and give you the tax value - they can give you estimated amounts so that you can have a pretty good idea what the taxes will run for you!
0 votes Thank Flag Link Sun Jan 16, 2011
Taxes are assessed as of Jan 1 of the year but tax bill is from July to July with the bill coming and due Nov 15. How about that for confusing? I would figure about 75-80% of what you pay for the house times the millage rate of $21 or so in Portland plus any assessments like the school bond coming up if it passes which would raise your taxes another 10% a year and the city can raise your taxes 3% a year. I would think less than $3000 the second year because your taxes have been set for this year a small percentage. When you buy new you beat the full tax amount unless you are buying a foreclosed home that sold for thousands more a few years ago and now the bank is giving it away. Good luck.
Tom Inglesby, Broker
RE/MAX Equity Group
503-319-9035
0 votes Thank Flag Link Sun Jan 16, 2011
Hi David,
I've actually called the county and asked them that direct question, with the address. They can't tell you exactly but they should be able to give you the "millage rate" for that neighborhood. That figure of course is multiplied by the assessed value. I would estimate it at $325000.

One thing you need to be aware of, if you're putting less than 20% down, you will not be able to pay your taxes separately from the mortgage. If that's the case, your lender will estimate the taxes since they don't know how much they will need to have in your escrow account when next November's taxes are due. In my experience, they guess on the very high side usually. Whatever figure they estimate for next year, will be the figure used in prorates and monthly escrow amounts. You should definitely check with your lender if that's the case and they will tell you what figure they're going to use. If it ends up being more than the actual tax, the escrow account will still have your money, and its available to you, but just something to be aware of.

On the other hand, if you're paying cash or borrowing 80% or less, then you pay your own taxes and will need to estimate. I would give a call and find out what the millage rate is, multiply it by $325000 and you'll have an estimate. Then I would add on 10% to be on the safe side!

There's a slight possibility that next year the taxes will still be on the lot only, and not be fully assessed until the next year. I've seen it many times over the years. Don't count on it though! it would be a nice surprise.

I'm not a property tax expert, so please take my advice as suggestions only and follow up with your own research or with your lender.

Best to you, and congratulations on getting a new home!
0 votes Thank Flag Link Sat Jan 15, 2011
a loose rule of thumb would be 1.25% of your purchase price per year.
Web Reference: http://www.pdxhomeloan.com
0 votes Thank Flag Link Sat Jan 15, 2011
Here's a clip from the Multnomah county Tax Assessor's web site that should help:

The amount you pay in taxes is not tied to the amount for which your property would sell.
Oregon law determines taxable values.
Contact the Oregon Department of Revenue http://(www.oregon.gov/dor; 800-356-4222) for more information. Market Value (RMV) is the assessor’s estimate of the price your property would sell for as of January 1, 2010.
Assessed Value for most properties is 3% more than last year's assessed value.
Taxable value is equal to assessed value (unless RMV is lower) and taxes are calculated on that amount.

The web site is http://web.multco.us/assessment-taxation/2010-2011-property-…
0 votes Thank Flag Link Sat Jan 15, 2011
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