Oregon Property Taxes Explained — A Plain English Guide

Oregon property taxes confuse almost everyone — buyers, sellers, and even some real estate agents. The fiscal year runs July 1 through June 30, taxes are paid *in arrears* (meaning you're always paying for time that already passed), and at closing, someone has to get reimbursed. This guide breaks it all down so it actually makes sense.

1. How Oregon Property Taxes Work

Every property in Oregon has two values assigned by your county assessor:

• Real Market Value (RMV) — What your property is worth on the open market.
• Assessed Value — The number your taxes are actually calculated on. This is often *significantly lower* than market value.

Here's the twist: thanks to Measure 50 (passed by Oregon voters in 1997), your assessed value is capped and can only increase by a maximum of 3% per year, regardless of how much your home's market value rises. Many Oregon homeowners pay taxes on an assessed value that's 30–50% below what their home would actually sell for.

💡 Real-World Example: Your home might sell for $600,000 (Real Market Value), but if its assessed value is $350,000, you only pay taxes on $350,000. The assessed value follows the *home*, not the owner — so when you buy that $600,000 home, you inherit the $350,000 assessed value. That's a big deal for buyers!

Your tax rate is set by adding up all the local rates for your school district, city, county, fire district, library, and other districts you're in. Oregon's constitution caps the combined rate at $15 per $1,000 of assessed value for most purposes, though voter-approved bonds can add to that.

How Your Tax Bill Is Calculated

2. The Oregon Tax Calendar

This is where most people get confused. Oregon's tax year runs July 1 through June 30 — not the calendar year. Bills don't arrive until fall, covering time that already started back in the summer.

The most important takeaway: When you receive your tax statement in October, you're paying for the tax year that *already started* back on July 1st. This is what "in arrears" means — you always pay for time that has already passed.

3. Payment Options

When your tax statement arrives in October, you have three ways to pay.

💰 Pro Tip: On a $5,000 annual bill, paying in full by November 15 saves you $150 with the 3% discount. It's free money — take it if you can!

4. How Mortgage Escrow Works

If you have a mortgage, there's a good chance you don't write a check to the county yourself. Instead, your lender collects money each month as part of your mortgage payment and holds it in an escrow account. When the tax bill comes due, they pay it for you. Your lender takes your estimated annual tax bill, divides it by 12, and adds that to your mortgage payment. Once a year, your lender performs an escrow analysis — if taxes went up or down, they'll adjust your monthly payment accordingly.

⚠️ Heads Up: Most lenders do *not* take the 3% early-payment discount — they simply pay when due. Some lenders do take the discount; it's worth asking yours.

5. Closing Day: The Proration Puzzle

Because Oregon taxes are paid *in arrears* and the tax year runs July 1 to June 30, you almost always have to settle up at closing. The core idea: The seller owes taxes for every day they owned the home during the current tax year. Since that tax bill won't arrive until October, the seller gives the buyer a credit at closing — money off the purchase price — to cover their share of the upcoming tax bill.

At closing, the buyer receives a $1,512 credit toward their purchase price. When the $6,000 tax bill arrives in October, the buyer pays it in full — but they've already been made whole by that closing credit.

Closing BEFORE November 15: The seller gives the buyer a credit at closing. The buyer pays the full tax bill in November. Closing AFTER November 15: The seller may have already paid the full year's taxes. In that case, the *buyer reimburses the seller* for the months the buyer will own the home. Your closing/escrow company calculates this automatically.

🔑 Bottom line: Either way, closing handles it. The escrow/title company does the math and adjusts credits and debits accordingly.

6. Common Questions (FAQ)

Q: Will my taxes go up dramatically when I buy a home?

Not from the purchase itself. Your assessed value stays the same as it was for the previous owner — that's Measure 50 at work. However, you lose any senior discount or other exemption the previous owner may have had. Going forward, your assessed value can grow at most 3% per year.

Q: My escrow payment changed and I don't understand why.

Your lender performs an annual escrow analysis. If your county raised your assessed value or increased rates, your monthly contribution goes up. If taxes fell, you may get a refund and a lower payment. You'll receive a notice in the mail.

Q: I bought in January — how does proration work for me?

If you close in January, the November taxes have already been paid in full by the seller. So *you as the buyer reimburse the seller* at closing for your 6-month share (January through June).

Q: Can I appeal my property's assessed value?

Yes! You have the right to appeal to your county's Board of Property Tax Appeals (BOPTA). You typically have until December 31 to file.

Q: Are there any exemptions or discounts available?

Yes. Senior/Disabled Deferral Program, Veterans' Exemption, and Low-Income Exemptions exist at the state and county level. Contact your county assessor's office for details.

7. Key Terms Glossary

This guide is for educational purposes only. Tax rates, deadlines, and rules vary by county and can change. Always consult your county assessor's office or a licensed Oregon real estate professional for advice specific to your situation.

By Dawn Robbins Group | NMLS# 432345

This content is for educational purposes only and does not constitute financial advice. Every buyer's situation is unique. Contact Dawn Robbins Group for personalized guidance.

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