Benton County, Oregon Property Tax Tutorial

Would it surprise you to know that only 39% of the registered voters in our area voted in May? That means when your property tax bill goes up this year – and yes, it probably will because there were two school levies on the ballot and both passed – and if you did not vote, then you let about a third of the people in the area choose that for you.  

On average, property taxes can only legally rise by 3% in a year unless additional levies or bonds are voted in.   

Max Assessed Value vs Real Market Value  

The average homeowner pays property tax based on the maximum assessed value of their home. However, there are different ways to determine that value.   

Assessed value is the amount your property is worth according to the city and/or state. This is the value you are taxed on, and it can go up if you make significant improvements to the property – like a $75,000 facelift – or if the house next door sells for significantly more than the city thought it was worth. This is the value used by insurance companies to determine how much it would cost to replace everything on your property in times of catastrophe.  

Real market value is also called a “trending value”, which means it’s the amount that real estate agents and potential buyers are willing to say your home is worth at a given time – that number being higher in a real estate market that has few houses and many buyers.    

If you’re buying an older home – let’s call it “used property” – then your tax bill is based on the maximum assessed value of that home. It’s assumed by the state of Oregon that your property will increase in value by 3% every year. That means that even if the economy is flat, you’ll still be paying more tax; if the value of your home goes up 20%, you’ll still only pay for 3% of that. Your used property carries with it the assessed value it had prior to you buying it – meaning the used property you paid $500,000 for could be taxed at $250,000, for example.  

However, if you buy a brand-new house – let’s call it “new property” – then your new property will hit the tax assessment books at the full amount you paid for it. The real market value and assessed value on new property is nearly the same amount. Meaning the new property you just paid $500,000 for will be taxed at $500,000 – costing you double the taxes from year one.  

Here’s one more fun fact: You won’t know after buying a property how much the tax bill will be, because it can take the Assessor up to a year to determine the assessed value.   

Current Property Tax Numbers  

Property Tax assessments are done at the end of the calendar year, so taxes will be coming due relatively soon. For Benton County, the current millage rate – the rate by which property taxes are calculated – is 1.080% per $100,000 assessed value. This means that for a home with an assessed value of $500,000, the owner will pay $5,400 in property taxes.   

The average millage rate for Oregon is 0.940%, and 1.110% for the U.S.   

In Oregon, the property tax amount is linked to the property not the ownership – meaning the assessed value doesn’t go up to real market value when it’s sold, but rather stays at the rate prior to purchase unless substantial upgrades are made.  

Taxes are calculated on the lesser of the two numbers between assessed value and real market value, so if a house loses value due to a downturn in the market, then an owner may have lower property taxes for that year. This downturn was seen by many homeowners in 2012 and 2013 due to the housing market bubble experienced at that time.  

If you’d like to find your home’s assessed value, contact the Benton County Department of Assessment.  

By Sally K Lehman 

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