Over the last three years we have seen our property tax bill increase while the value of our home declined. This is quite common in the US as I understand. In this post, I will talk about how our property tax is calculated and what we did about it.
In Oregon, we see two numbers in our property tax bill.
- The RMV (Real Market Value) is the estimated value of our home on the previous Jan 1st.
- The AV (Assessed Value) is the attempt to cap the increase of property tax to 3% each year. Measure 50 was passed in 1997 and since then, the AV goes up 3% every year regardless of what happens in the real estate market.
The county calculates the property tax based on the lower number between RMV and AV. As you can see the RMV is generally quite a bit higher than the AV.
Like many home owners in the US, we don’t like paying more property taxes every year while the value drops. So we decided to appeal and hoped to bring the RMV down lower than the AV. If we could do this, then our property tax bill will decrease.
I appealed in 2008 unsuccessfully, but I was willing to try again because property value dropped quite a bit since then. I sent in the appeal request along with the property tax payment in November 2010 and waited to hear back. One of our neighbor purchased a unit similar to our condo in 2009 for 30% off our 2007 price (near the peak of course.) Eventually I got my appeal date in March and prepared to battle those blood sucking city workers.
I walked in to the meeting room to face the appeal board that consisted of 3 nice volunteer retirees and home owners just like us. I knew this from 2008, but I wanted to throw in “blood sucking city” for fun. I sat down and presented my data and…. The board promptly told me they have been instructed (by the county court?) to NOT consider bank sales as evidence of lower property values. Wow, really? That statement completely let the wind out of my sail since I only brought the data from the lowest priced sale – a foreclosure. I went ahead and made my pitch, but I knew the routine from 2008. The 3 people on the board were very nice and explained to me that the assessor office found the RMV to be a bit lower than in the tax statement. The board then voted to lower the RMV and was ratified. This didn’t help me much because the lowered RMV is still higher than the AV. I went home disappointed and received the confirmation a few days later.
However, surprise surprise, the county sent me a $440 property tax refund check last week!!! I deposited the check and I’m not going to ask any questions. This is why we are anonymous. 😀 Hopefully our 2011 property tax bill followed suit and stay lowered too. What can I say, if at first you don’t succeed, try try again. BTW, the $440 is going straight into Baby RB40’s 529.
If you like this post, you might want to check out my Buying a home is better than Renting post.