Tax man pays no heed to deflation

Home owners appeal, but their taxes still rise

By Steve Law

The Portland Tribune, Jan 15, 2009, Updated Oct 30, 2009 (8 Reader comments)

The number of county homeowners filing appeals to reduce their property taxes has more than doubled, as cash-strapped residents seek tax relief after their home values plummeted.

About 2,700 property owners appealed their 2008-09 property tax bills to the Multnomah County Board of Property Tax Appeals by the Dec. 31 deadline, up from 1,078 last year, said county spokesman Shawn Cunningham.

Most of those appeals are unlikely to prevail, said Multnomah County Assessor Randy Walruff. And many homeowners will face sticker shock when they get their 2009-10 property tax increases this fall, even if home values continue falling.

Why? Welcome to the wacky world of Oregon’s tax system.

Voter-approved property tax limitations in 1996 and 1997 set a 3 percent cap on annual increases in assessed property value, which are used to determine a homeowner’s property tax bill. But real market values have risen much faster since then. As a result, the average Multnomah County home is being taxed in 2008-09 at 50.5 percent of its real market value, Walruff said.

Home values dropped in 2008 for the first time since 1996 and 1997, but they’d have to drop much more dramatically, in most cases, before approaching the assessed value the county uses to set most property tax bills, Walruff said.

Barbara Cole is one of the 2,700 county property owners who filed appeals.

“I don’t like taxes going up in any way, shape or form,” Cole said in an interview. “I don’t know what the deal is.”

Cole asked the county to drop her real market value in her appeal, but was unaware the amount she requested is still higher than the assessed value on which her taxes are based. As a result, she’s not going to get her $889 property tax bill reduced even if she wins her appeal.

A sampling of a dozen randomly selected property tax appeals suggests Cole is one of hundreds of area residents, if not thousands, who don’t understand their tax statements.

Francis Gaudette, who owns a rental house at 8518 N.E. Holladay St. in Portland, asked the county to drop the real market value from $245,7090 to $225,000. “The market has fallen drastically the last three months,” Gaudette wrote in the appeal.

But the home’s assessed value — what Gaudette’s property taxes are based on — is only $120,670.

Many appellants packed their requests with home appraisals, sale prices of similar homes and other data. Most of that effort appears to be for naught.

William Burch was the lone appellant of the 12 files examined who asked for a real market value below his assessed value, but just barely. His home at 7916 N.W. Hawkins Blvd. has a real market value of $738,860, and he asked for a reduction to $500,000, slightly below his $502,400 assessed value.

Burch submitted newspaper articles about landslides in Southwest Portland to buttress his case. He argued his house has three bedrooms and two and one-half bathrooms, while the “standard in the neighborhood” is four to seven bedrooms and three to five bathrooms.

Burch wrote that he has a two-car garage, while neighboring garages fit three to five cars.

Most appellants also don’t appear to realize that real market values are based on Jan. 1, 2008, market conditions, though their tax statements didn’t arrive until October. Most of the drop in Portland-area home values came after the first of the year, Walruff noted.

Walruff encouraged people to check their property tax statements this fall, when the revised market values should be reflected in their statements.

But that doesn’t mean folks can expect much property tax relief next time. Artificially depressed assessed values will surely rise another 3 percent for 2009-10 taxes, as set by voter-approved measures enshrined in the Oregon constitution.

And November 2008 voter approval of property tax measures for Portland Community College, a children’s levy and the Oregon Zoo will drive up taxes again.

stevelaw@portlandtribune.com

Values falling; taxes not so much

A typical Multnomah County homeowner is paying 2008-09 property taxes on an average 50.5% share of the home’s real market value.

That’s because 1996 and 1997 ballot measures capped annual increases in properties’ assessed, or taxable, values at 3 percent a year. Meanwhile, home prices have risen at a much faster clip, until 2008.

The tax limitations provide a fatter tax break to folks living in neighborhoods that were relatively cheap in 1996-97 but subsequently shot up in price, such as North Mississippi Avenue.

Conversely, folks are paying relatively higher taxes in areas where home values haven’t climbed as much since 1996-97. They have a higher ratio of assessed value to real market value.

Here are those ratios for 2008-09, by zip code:

1 | 2 Next Page >>

Facebook	Digg	Del.icio.us
Newsvine	Stumbleupon	Reddit