Thinking about moving to Eugene, Oregon? Don’t forget to consider Eugene property tax when looking at a home! Oregon property taxes are in a strange place, so let’s talk about how they work, and how much you can expect to pay for a house in Eugene or the surrounding area.
Oregon and Property Taxes
You may already know that some things about Oregon’s tax system are…unique. The lack of sales tax means that the state has had to get invented about drawing in funds from its citizens. Typically, it’s income tax that sees the highest rates because of this alteration, but other taxes are also put in a curious position, including property tax.
Let’s start by getting something out of the way: Many people, legislators included, believe the Oregon property tax system needs to be overhauled. Given how state politics work this is unlikely, at least at present, but it is worth knowing that people see the flaws in the current system and are working – particularly at the city level – to correct them.
Now, it’s time to talk about 1995. As with most states, Oregon focuses on assessed property values to calculate property taxes. Assessed values are often unrelated to market values or any other more common form of measurement. The last big Oregon law passed on property tax was in 1995, and used the 1995 value of property as a baseline to determine taxes. You can see why this might be a problem 20 years later! We’ve been through a recession that did untold damage to the real estate market, Oregon cities have expanded, Portland has become a much more notable city, and suburban development continues to pick up speed.
As a result, property taxes are often random and change not only city by city, but also year by year. Someone in Portland, for example, may suddenly find themselves paying twice as much in property taxes (thousands of dollars more) due to esoteric calculations based on obsolete 1995 numbers…a real scenario that happened to many homeowners in the early 2010’s. While property taxes aren’t as high in Eugene, the city still suffers from similar jumps in taxes due – even if the market value of the home remains the same.
Property tax limitations also impose restrictions on how these tax funds can be used. Cities must constantly ask for and renew additional levies that only last for five years and have severe caps: The Eugene School District, for example, can only use about 45% of possible property tax revenue to fund schools, and is often unable to raise rates in response to new demand. This has its benefits – it can help keep property taxes low – but it gives cities very little wiggle room when it comes to shifting budgets or finding sources of new funding.
Eugene Property Tax Comparisons
If you need to take a couple minutes to get rid of the headache you got reading about Oregon taxes, that’s okay: It’s time to move onto Eugene’s own unique situation. Here’s a 2013 snapshot – one of the most recent years where full data is available. The city imposed about $99 million in total property taxes. The permanent property tax rate was at $7.01 per $1,000 of assessed value. There was no voter-approved temporary tax rate, although of course this can change over time. However, an additional tax of $1.13 per $1,000 of assessed value was opposed for other purposes, bringing the total rate to $8.14 per $1,000 assessed value.
As with most cities in Oregon, Eugene depends primarily on property taxes for its major services – around 63% of the city’s general fund comes from property taxes. This funds public safety (fire departments, police departments, etc.), infrastructure work, land use planning, parks, community development, and any recreational programs.
While property taxes may be mired in 1995 rules, they aren’t completely stuck, and can shift due to real estate trends. This caused property taxes to quickly drop during the recession of the 2000’s, which mean that Eugene lost a lot of money to spend on its city and was eventually forced to fire a number of its staff. While conditions have improved since then, the city is still operating at a significant budget gap of around $3 million and is considering a variety of budget cuts. This shows just how important property tax trends are to the growth and fate of Oregon cities!
Eugene Property Taxes Comparisons
If you want particular numbers for a given property, you can try to use a Property Tax Calculator for specific (although not guaranteed) answers. For example, a Eugene home assessed at around $220,000 will cost around $2,200 per year in current property taxes. Statewide, people pay around $2,270 per year. Please remember our caveat that property tax numbers can change dramatically from year to year, depending on location, so take all these figures with a grain of salt.
Currently the national property tax rate is actually higher than our fictitious Eugene example, around $2,600. That’s right, some good news at last! Overall, Oregon property tax rates do tend to stay lower than the national average. This is due in large part to its much higher income tax, which makes up the difference. Some states, like Hawaii have very low property taxes with averages around $500 (that they make up for in other ways), while some states have far higher taxes, such as Illinois, where the average property tax is almost at $4,000. Average property tax ranges for major U.S. cities (during the same year or close to it) include:
- New York City: $6,000Â to $9,000.
- Seattle: $2,500 to $3,000
- San Francisco: $3,000 to $,5000
- Los Angeles: $2,500 to $3,000
“Ah,” you may be thinking, “But if assessed value and market value are so different, how do I know what the assessed value of a house really is?” Fortunately, banks should do this research for you before they complete the loan process: Typical bank arrangements in Oregon include automatic payments into escrow for property taxes, which your lender will pay on your behalf every year – in other words, your property tax payments are spread throughout your monthly mortgage payments, instead of being a separate fee. You’ll receive annual updates on your property value, but if you want information right away you can visit the Lane County website and look up your property tax account to find out more.
Property Tax Changes
It may interest you to know that some of the latest changes to Eugene property taxes include a $2.7 million increase to the annual tax due to a voter-approved property tax levy. This will increase property taxes for the next five years starting in 2016. The extra funding will be used for library development, and it equals out to about 17 cents more per $1,000 of assessed property value. This is a good example of how the city can add levies with voter approval for a variety of projects.
