In 2023, Portland voters approved two measures that will affect property owners. One of the measures voters chose to renew will continue to support children's education programs and food security, as well as help foster children and youth succeed. The second renewed a five-year levy to maintain emergency fire and medical services for Riverdale residents. Home prices have remained fairly stable or declined slightly in 2023 in most areas of the city. These measures maintain established tax rates, but because home values tend to rise each year, they will be more expensive in 2024 for most property owners because taxes are based on assessed property values. Due to Portland's property tax structure, homeowners and business owners will also incur additional tax increases in 2024. This article explains how these factors affect property taxes.
Portland, Oregon's property tax rates are the highest in the country and rising
Last year, we noted a study by the Lincoln Institute of Land Policy that found Portland had the fifth highest property taxes in the country in 2019. The study was repeated in 2022 with the same results, ranking Portland fifth with an effective property tax rate of 2.59% on the average assessed value home. In 2024, Multnomah County, which includes most of the City of Portland, will have one of the highest median property tax rates in the U.S., ranking 203rd out of 3,143 counties, according to Tax-Rates.org.
What is causing Portland property taxes to rise?
The City of Portland uses a complex formula to calculate taxes for individual properties. This formula takes into account both the actual market value of the home (determined by the sales prices of similar homes) and the “max assessed value” (limited to a 3% increase per year), and calculates property taxes based on the lower of the two numbers. The 3% annual limit on the home's assessed value for calculating property taxes is beneficial for homeowners whose values may have increased by more than 3%, but with the addition of bonds and levies that are passed or renewed each year in Portland, taxes increase more and more. This often depends on the particular part of Multnomah County, or tax code area, in which the property is located. Tax code areas can be found in this table (far right). Check out this article for a handy breakdown of Portland's property tax structure.