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Real Market Value and Assessed Value Explained

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	City of Tigard 13125 SW Hall Blvd. Tigard, Oregon 97223	Press Release November 13, 2003
For Immediate Release
Contact:	Craig Prosser Director of Finance City of Tigard 503-718-2486 craig@tigard-or.gov

Real Market Value and Assessed Value Explained
Property owners may not be paying as much in property taxes as they think they are. This is because of an aspect of Measure 50, passed by voters in 1997.

There are two ways of valuing property for taxation purposes: Real Market Value, which reflects how much the property would cost if sold on the open market, and Assessed Value, which may or may not equal Real Market Value. Since voters in Oregon passed Measure 50 in 1997, Assessed Value in Oregon equals only a fraction of Real Market Value.

So what does this mean? If a person bought a house for $250,000 in 2003, how are the property taxes calculated? The sales price ($250,000) is the Real Market Value of the house. But the County Assessor values the house at only 65% to 70% of that amount for taxation purposes. This $250,000 house is therefore valued for taxation purposes at $162,500 to $175,000. The combined tax rates for all governmental units that provide services to this house are applied to the lower value, and that produces the amount that the property owner pays in property taxes.

"Since the City of Tigard started discussions about the possible annexation of Bull Mountain, we have received a lot of phone calls and e-mails from property owners saying that their house is worth $X and therefore their tax bill after annexation will be $Y," said Jim Hendryx, City of Tigard Community Development Director. "We have been explaining to them that the market value of their property has nothing to do with their final tax bill." Property owners need refer to the Assessed Value of their property, which is clearly identified on tax bills mailed by the County Assessor last month.

"Measure 50 has been successful in limiting property taxes paid by Oregonians and in limiting future growth of those taxes," said Craig Prosser, City of Tigard Finance Director. "It also cleaned up a lot of conflicts within the prior system, but unfortunately, it has not improved the ability of the lay person to understand the system. This makes it very important for governmental officials to do all they can to help the public understand the taxation system."