Property Tax in Oregon: Rates, Measure 50, and What Homeowners Actually Pay
Oregon’s property tax system is one of the most unusual in the country. Voters passed Measure 50 in 1997, capping the growth of taxable assessed value at 3% per year regardless of actual market appreciation. The result: most Oregon homeowners pay taxes on an assessed value far below what their home would sell for. The statewide effective tax rate averages 0.87%, but the actual rate applied to assessed value is much higher — the gap between assessed and market value creates the illusion of low taxes while generating the same revenue through a different mechanism. Understanding how this works is critical for anyone buying or owning property in Oregon.
How Oregon Property Tax Works: The Two-Value System
Every Oregon property has two official values on the tax roll:
| Value | Definition | How It Changes | Purpose |
|---|---|---|---|
| Real Market Value (RMV) | Estimated fair market value | Adjusts annually based on market conditions — can go up or down | Comparison benchmark; caps the assessed value |
| Maximum Assessed Value (MAV) | The highest amount your assessed value can reach | Grows by exactly 3% per year from the 1995–96 base | Limits tax growth |
| Assessed Value (AV) | The value you actually pay taxes on | Set to the lower of RMV and MAV each year | Multiplied by tax rate to produce your bill |
Here’s a concrete example. A home with a 1995–96 assessed value of $120,000 has a 2026 MAV of approximately $286,000 (after 30 years of 3% annual growth). If that home’s current market value is $520,000, the assessed value is $286,000 — the lower of the two. Use our rent affordability calculator for detailed numbers. The homeowner pays taxes on $286,000, not $520,000. That’s a 45% discount from market value.
Measure 50 History and Mechanics
Oregon voters passed Measure 5 in 1990, which capped property tax rates at $15 per $1,000 of real market value ($10 for general government, $5 for education). Rates above these limits were “compressed” — reduced proportionally. Measure 50, passed in 1997, froze assessed values at 1995–96 levels minus 10%, then capped future growth at 3% annually.
The combination created Oregon’s current system:
- Rate limits (Measure 5) cap how much taxing districts can charge per $1,000 of assessed value
- Growth limits (Measure 50) cap how fast your assessed value can increase
- Compression reduces tax rates when total levies exceed Measure 5 limits, protecting taxpayers from rate stacking
Effective Tax Rates by County
Oregon’s effective property tax rate (taxes paid as a percentage of market value) varies significantly by county. The statewide average is 0.87%, but some counties run well above or below this:
| County | Effective Tax Rate | Median Home Value | Estimated Annual Tax |
|---|---|---|---|
| Multnomah (Portland) | 1.07% | $500,000 | $5,350 |
| Washington (Beaverton/Hillsboro) | 1.02% | $520,000 | $5,304 |
| Clackamas (Lake Oswego/Oregon City) | 0.95% | $510,000 | $4,845 |
| Lane (Eugene) | 0.97% | $410,000 | $3,977 |
| Marion (Salem) | 0.98% | $365,000 | $3,577 |
| Deschutes (Bend) | 0.72% | $625,000 | $4,500 |
| Jackson (Medford/Ashland) | 0.82% | $385,000 | $3,157 |
| Josephine (Grants Pass) | 0.63% | $340,000 | $2,142 |
| Lincoln (Newport/Lincoln City) | 0.68% | $380,000 | $2,584 |
| Benton (Corvallis) | 0.94% | $430,000 | $4,042 |
Multnomah County has the highest effective rate due to multiple local levies, including the Portland Metro Housing Bond, Multnomah County Library levy, and Portland Children’s Levy. Deschutes County’s lower rate reflects fewer overlapping taxing districts. Calculate your estimated taxes with our property tax calculator.
What New Buyers Need to Know
When you buy a home in Oregon, the assessed value does not reset to the purchase price. You inherit the existing assessed value from the previous owner. This means:
- If the previous owner held the home for 20 years, the assessed value may be 40–50% below market value, and you benefit from that low basis
- The MAV continues growing at 3% per year from whatever the current MAV is
- Your property taxes will likely be lower than you’d expect based on what you paid for the home
However, there’s an important exception: if the home was recently built or underwent major improvements, the assessed value may be closer to (or equal to) market value, since new construction is assessed at current market rates. Use our rent vs buy calculator for detailed numbers. The 3% cap applies from that new starting point.
Exceptions That Reset or Increase Assessed Value
| Event | Impact on Assessed Value |
|---|---|
| New construction (new home on vacant land) | Assessed at current market value — no Measure 50 discount |
| Major addition (adding square footage) | Added value assessed at current market; existing portion keeps old AV |
| Subdivision / partition | New lots assessed at current market value |
| Rezoning that increases value | May trigger reassessment of the portion affected by zoning change |
| Regular sale (no improvements) | No change — buyer inherits existing AV and MAV |
| Fire damage and rebuild | Rebuilt portion assessed at current market rates |
The New Buyer Advantage
Unlike California’s Proposition 13 (which resets the tax basis to the purchase price on every sale), Oregon’s Measure 50 passes the existing assessed value through to the new owner. This creates a genuine advantage for buyers of older homes. Consider two identical homes side by side, both worth $520,000:
| Scenario | Assessed Value | Annual Property Tax (at $15/$1,000 rate) |
|---|---|---|
| Home purchased from 25-year owner | $265,000 (inherited low AV) | $3,975 |
| Newly built home | $520,000 (assessed at market) | $7,800 |
| Home purchased from 10-year owner | $385,000 (moderate AV) | $5,775 |
The buyer of the older home pays nearly half the property taxes of the new construction buyer — on an identical property. This is one of the least-discussed financial advantages of buying existing homes versus new builds in Oregon. Check your potential taxes with our property tax calculator.
Tax Compression Explained
Compression is the mechanism that enforces Measure 5’s rate limits. When the total levies from all taxing districts on a property exceed $10 per $1,000 of RMV (for general government) or $5 per $1,000 (for education), the levies are reduced proportionally to fit within the cap.
Compression primarily affects properties where the gap between RMV and AV is small — meaning newer homes, recently improved homes, or properties in areas where values haven’t appreciated as much. Long-term owners with large RMV-to-AV gaps rarely experience compression because their high RMV provides headroom for the rate limits.
In practice, compression costs Oregon taxing districts over $400 million per year in revenue they would otherwise collect. It primarily reduces funding for local option levies (voter-approved bonds and levies) rather than permanent tax rates.
Property Tax Exemptions and Deferrals
Oregon offers several programs that reduce or defer property taxes for qualifying homeowners:
| Program | Eligibility | Benefit |
|---|---|---|
| Senior/Disabled Property Tax Deferral | Age 62+ or disabled, household income under ~$49,000 | State pays your property taxes; repaid with 6% interest when home is sold |
| Disabled Veteran Exemption | Veteran with 40%+ service-connected disability | Exempts $24,000–$29,000 of assessed value (amount varies annually) |
| Homestead Exemption | Oregon does not have a general homestead exemption | N/A — Oregon is one of few states without this |
| Active Duty Military | Deployed outside Oregon | Property tax deferral during deployment |
| Historic Property Special Assessment | Property listed on National Register of Historic Places | Assessed at restricted value reflecting preservation easements |
Note that Oregon does not offer a general homestead exemption. Unlike Texas, Florida, or California (Prop 13’s base-year system is different from Oregon’s), Oregon provides no across-the-board reduction for primary residences. The Measure 50 growth cap applies equally to all property types.
Special Assessments and Local Improvement Districts
In addition to property taxes, Oregon homeowners may face special assessments from Local Improvement Districts (LIDs). Cities create LIDs to fund infrastructure improvements — new sidewalks, sewer extensions, street paving — and bill affected property owners directly. LID assessments are not subject to Measure 5 or Measure 50 limits. A $15,000 LID assessment for a new sewer line can be paid as a lump sum or financed over 10–20 years at interest rates set by the city.
Before buying a home in Oregon, check for any pending or existing LID assessments with the city’s public works department. Outstanding LID balances attach to the property and transfer to the new owner at closing unless the seller pays them off. Portland, Bend, and growing suburbs frequently use LIDs for development-related infrastructure, and assessments of $5,000–$25,000 per property are not unusual in newly developed neighborhoods.
How to Read Your Oregon Tax Statement
Oregon property tax statements are mailed in late October, with taxes due November 15. The statement includes:
- Property description: Legal description, tax lot number, and account number
- Value summary: RMV, MAV, and AV for land and improvements separately
- Tax calculations: Each taxing district’s rate, the amount owed before and after compression
- Payment options: Full payment by November 15 (3% discount), 2/3 by November 15 + 1/3 by February 15 (no discount), or thirds due November 15, February 15, and May 15 (no discount)
The 3% discount for early full payment is free money — on a $5,000 tax bill, paying in full by November 15 saves $150. If you pay through a mortgage escrow account, your lender will typically pay in full to capture this discount. Verify with your loan servicer.
Property Tax and Home Values: The Long-Term Math
Oregon’s 3% cap creates growing disparity between assessed and market values over time. Here’s how the gap widens:
| Year of Ownership | Assessed Value (3% growth) | Estimated Market Value (5% growth) | AV as % of Market |
|---|---|---|---|
| Year 1 (New Construction) | $400,000 | $400,000 | 100% |
| Year 5 | $463,710 | $510,510 | 91% |
| Year 10 | $537,567 | $651,558 | 82% |
| Year 15 | $623,177 | $831,571 | 75% |
| Year 20 | $722,443 | $1,061,320 | 68% |
| Year 30 | $971,354 | $1,729,242 | 56% |
This growing gap means long-term Oregon homeowners enjoy a substantial and increasing property tax advantage compared to states that reassess at market value. It also means that selling your home and buying another at current market value could significantly increase your property tax basis — an important consideration for downsizers who are thinking about moving from a home they’ve owned for 20+ years to a newly built condo or townhouse. Model different scenarios with our mortgage calculator.
For investors, the 3% cap makes Oregon rental properties increasingly favorable over time. Property taxes grow slowly while rents keep pace with market rates, widening the gap between income and tax expense. This dynamic is one reason Oregon attracts rental property investment despite the state’s rent control laws.
Property Taxes and Your Monthly Mortgage Payment
Most Oregon homeowners pay property taxes through their mortgage escrow account. Your lender collects 1/12 of the estimated annual tax each month and pays the full amount when due. This means property taxes directly affect your monthly housing cost.
Here’s how property taxes add to monthly payments across Oregon’s major markets:
| Market | Median Home Price | Annual Property Tax | Monthly Tax Addition | Total Monthly (Mortgage + Tax + Insurance) |
|---|---|---|---|---|
| Portland | $525,000 | $5,350 | $446 | $3,820 |
| Salem | $365,000 | $3,577 | $298 | $2,680 |
| Eugene | $410,000 | $3,977 | $331 | $2,960 |
| Bend | $625,000 | $4,500 | $375 | $4,350 |
Use our affordability calculator to see how property taxes affect the total home you can afford, and check the amortization schedule to understand how your monthly payment splits between principal, interest, taxes, and insurance over time. If you’re comparing Oregon to other states, our closing cost calculator factors in Oregon’s unique tax structure.
Compare With Other States
Considering other markets? Here’s how other states compare:
- Ohio Property Tax System Explained: What Homebuyers Need to Know
- Texas Property Tax System Explained: What Homebuyers Need to Know
- Indiana Property Tax System Explained: What Homebuyers Need to Know
Frequently Asked Questions
Does Oregon reassess property when it’s sold?
No. Unlike California’s Prop 13 (which resets to market value on sale), Oregon’s Measure 50 does not trigger reassessment when a property changes hands. The buyer inherits the previous owner’s assessed value and MAV. This is one of the key differences that makes Oregon’s system favorable for buyers of older homes — you get the benefit of years of constrained assessed value growth.
Why is my assessed value so much lower than what I paid for my home?
Measure 50 froze assessed values at 1995–96 levels minus 10%, then capped growth at 3% per year. Market values in most Oregon metros have grown much faster — 5–8% annually in many years. After 30 years of this compounding gap, the assessed value of a long-held property may be 40–55% below market value. This is by design and benefits all current homeowners.
Can my property taxes decrease if the market drops?
Yes. If the market value of your home drops below the maximum assessed value, your assessed value (and therefore your taxes) drops to the lower market value. This happened to many Oregon homeowners during 2008–2012. When the market recovers, your assessed value climbs back up — but only to the MAV cap, which has continued growing at 3% per year during the downturn.
How do local bonds and levies affect my taxes?
Voter-approved bonds (for schools, fire stations, parks, transit) add to your tax rate. Unlike permanent rates, bond levies are time-limited (typically 5–20 years) and are subject to Measure 5 compression. In heavily-levied areas like Multnomah County, bond levies can add $2–$5 per $1,000 of assessed value to your annual bill. Check your ballot carefully — each “yes” vote on a bond measure directly increases property taxes.
Is Oregon’s property tax system fair?
It depends on your perspective. Long-term homeowners benefit enormously from the 3% cap, paying far less than the market value of their home would suggest. New buyers of recently built homes pay taxes on full market value and subsidize the shortfall created by long-term owners’ lower assessments. The system also creates horizontal inequity — two identical homes side by side can have vastly different tax bills depending on when each was last built or improved. Supporters argue it provides predictability and protects seniors on fixed incomes; critics call it arbitrary and regressive.