There is no doubt that Oregon is the next hot place. According to the United National Movers Study, Oregon is the top moving destination for the third year in a row. The pressure and popularity of not only Oregon, but of its largest city, Portland, has created a critical shortage of rental housing.
Despite these trends, Oregon still offers a lower cost of living with a high quality of life. Job growth in the technology sector attracts new residents with those skills and income potential is slowly increasing. The combination of these factors attracts the new residents and will likely encourage further growth in the city.
You can still find good deals on home purchases, especially when you consider the purchase prices in similar cities. Median home value still hovers around $319,000 and property taxes are comparatively lower than in other cities. To give you an idea so you can budget with your Portland move and home payments, here is an explanation your expected property taxes should you decide to buy in this city.
Property Tax Overview
Your property taxes are based on the tax assessed value of the property. Due to a constitutional limit, tax assessed value is controlled in order to keep the taxes lower. When a home sells, value is not reassessed. In fact, home values froze in 1998 due to voters passing Measure 50.
Tax-assessed value of your home is usually much lower than real market value, sometimes substantially. It is not uncommon for a home purchased for $500,000 to be assessed at $300,000 for tax purposes. Since the purchase price does not change the assessment, you will still pay taxes on the $300,000 assessed value rather than on the higher purchase price.
When the state needs to raise revenue, it normally does that by changing how the tax-assessed value of real estate is determined. Due to constitutional limits described above, if any changes increase tax-assessed values by more than three percent, the new laws much be approved by the citizens through a vote. This commonly arises with levies that fund state and local resources like schools, libraries, and fire departments. In Portland, most of these efforts pass.
Rates are charged per $1,000 of the tax-assessed value and the actual rate varies by community. The highest rates are in the Multnomah County, the primary county for the city of Portland. Washington and Clackamas counties, which host nearby Portland suburbs, have much lower tax rates. Since mass transportation is very accessible through the tri-county area of Multnomah, Washington, and Clackamas counties, you may be able to purchase an affordable home with lower taxes and still have good access to city amenities.
If you are considering a home purchase in Portland, the city makes it easy for you to access past assessed values. Visit the Portland Maps website, enter the address, and you can see the most recent value.
Property taxes are assessed in July and you will receive a notice. At that time, you are not required to pay or agree to a payment plan. The tax statements requesting payment are mailed every October and you have the option of paying them in full or dividing them in three payments. Any unpaid taxes are subject to interest and further collection activity.
How This Compares Nationally
It is difficult to compare Portland to other cities because its property tax system is so different. Homes located one block from each other can carry vastly different property tax rates which has often lead to criticism of this technique. Â If you do not visit Portland Maps to check your potential purchase’s taxation past, you could find a bad surprise when property taxes come due.
However, Portland still compares well when compared on a county-by-county basis. The average property tax burden in Multnomah County (Portland’s primary county) between 2007 and 2011 was $2,881. Nearby Seattle, in King County, the average burden for that time period was $3,697. In the Bay Area, where many Portland implants come from, property tax burdens are $5,718. Los Angeles, San Diego, and other southern Californian cities all hover around $3,500.
The comparisons become stark when you bring East Coast cities into the mix. New Jersey has the highest property tax rate in the nation with an average of 2.38 percent. In Newark, the average annual property tax payments inflate to over $8,000 and sometimes, close to $9,000.
Even when considering the bizarre system in place and the housing crisis, Portland still compares well when it comes to property taxes. It is likely you will pay in the $3,500 range but that will still be lower than several other places. Portland also offers a good resource so you can get this information before you purchase a home and see if the tax expectations fit in your budget.
The Big Tax Picture
Financing matters frequently dominate public debate in the Portland political climate. Since incomes remain low at that this time, tax burdens seem more burdensome. As a resident, you will find elections crowded with budget measures with spending being a dominant issue. That is due to Measure 50 and also the mindsets regarding taxation in the state.
However, Oregon actually pays less than the U.S. average in overall taxes. Residents face income and property taxes, but Oregon does not have a sales tax. Since that daily expense is often the most noticeable to consumers that frequently adds to Portland’s appeal. Implementing a sales tax has always been a divisive issue in the state and it is unlikely to pass anytime soon. Residents appear to tolerate their income and property taxes in order to avoid a sales tax.
Overall, Portland property taxes are lower than many cities on average. It is a good location if you want the urban lifestyle but not the high costs often associated with it. If you are looking to relocate for cost savings and an improved quality of life, Portland is an excellent choice.
2 Point Highlight
1. The average property tax burden in Multnomah County (Portland’s primary county) between 2007 and 2011 was $2,881. Nearby Seattle, in King County, the average burden for that time period was $3,697.
2. Residents face income and property taxes, but Oregon does not have a sales tax.
