According to a new report from the Northwest Economic Research Center, Oregon’s property tax system is skewing the housing market. The report, commissioned by the League of Oregon Cities, found that property taxes have not kept pace with home prices in some Portland neighborhoods. Similar homes in different neighborhoods could vary wildly in price due in large part to the nature of Oregon’s property tax system.
Property taxes in Oregon are often based on a home’s market value from the mid-1990s. That’s because of ballot measures passed at that time that limited property tax increases. The report points out that low taxes can create a “hidden subsidy” for some property owners, while disadvantaging others. This can end up driving up home values in the places like Portland’s inner east side.
While the study focused on Portland, the authors say the findings likely apply in other areas of the state.
What is your experience with the housing market where you live? How have property taxes affected your decisions about buying and selling real estate?