Oregon Special Assessment Program

History

The State of Oregon was one of the pioneers in enacting tax incentives for rehabilitation of historic properties, dating back to 1975, when the Oregon Special Assessment Program was introduced. In the ensuing years, the legislature has revised the program several times - generally expanding its applicability and reducing burdens for property owners. For example, for many years participation in the program required the owner to sage an open house for the public once per year. That requirement was eliminated by the legislature a number of years ago.

Eligible Properties

All contribution properties in the Irvington District are potentially eligible for the Special Assessment, including single family homes and commercial properties of all types. Prior to creation of the district only individually listed National Register Historic Properties, of which there were only 28 in Irvington at the time, were eligible. With the district now in place, no separate listing is require to take advantage of the potentially significant economic benefits of the program. You can determine if your property is designated as contributing using the Irvington Historic District map. Look for your address in the listing below the map and you’ll see your property’s designation under “Resource Status”.

Program Requirements

To qualify for the program you must meet these requirements:

  • Plan to invest 10% of the Real Market Value (RMV) of the property in the first 5 years on a combination of rehabilitation and maintenance projects, with emphasis on rehabilitation. RMV is as shown on Multnomah County Assessor's websiteand includes the value of the whole property - land plus improvements. For example, if your total RMV for your property is $445,000, you would need to spend at least $44,500 on your rehabilitation and renovation project to qualify.

  • Submit an application to the State Historic Preservation Office (SHPO), paying a fee of 1/10th of 1% of the total assessed value. For that $445,000 house, the fee would be $445. This fee is not collected until an approved preservation plan is accepted.

  • Provide a “Preservation Plan” which spells out exactly what is proposed to be done, how much it is expected to cost, and when you plan to complete that project. Typically the plan is something you can prepare yourself without the help of a consultant, but if you already have plans and specifications from an architect or contractor for your proposed rehabilitation project, that may well provide the basis of your plan. You even include work already done, providing that it was completed within two year prior to your application and meets the standards. (Note: Just because you’ve completed the work doesn’t mean you aren’t eligible!)

  • Show proof of property insurance.

What Improvements Qualify?

What kinds of rehabilitation and renovation are eligible? Interior and exterior rehabilitation and maintenance are all covered . Not just the primary structure on your lot (i.e. your house) but any historic outbuildings and historic landscaping/landscape features (think restoration of your original stone or concrete retaining walls). Exterior changes may or may not trigger Historic Resource Review. If that is required, you will need to show that you have received approval of the Review if you are including that work as part of your plan. Additions and new construction on your property can be included as long as it has passed Historic Resource Review. This latter fact is very important as projects to expand square footage of your home or commercial building or substantially improve its systems and condition will potentially trigger a re-assessment for tax purposes, which will not be subject to any Measure-5 limitations, and the Special Assessment program can put off that day of reckoning for 10 years! And better yet, this tax savings can be passed to buyers if you decide to sell.

Special Considerations

The issue of Measure-5/47/50 limitations is very important to understand as you evaluate your personal situation. Every house in Oregon has a Maximum Assessed Value (MAV) which is derived from its value in 1995 and may not increase more than 3% per year. If you don’t change anything in your house, your assessed value for property tax purposes cannot exceed that MAV value. Except, if the property is improved by investments of $10,000 or more in one year or $25,000 within any consecutive 5 years, the 3% cap does not apply and the MAV increases proportionately to your investment in the property. Many residents of Irvington, and other areas where major rehabilitation projects are being undertaken, are discovering, to their chagrin, that those investments have tripped that MAV increase substantially in excess of 3%. 

Some arguments against the Special Assessment point out that at the end of the 10 years your property will be subject to re-assessment and taxes will go up more than they would have if you did nothing to your property over that 10 years. However, that argument ignores the potential for increased taxes triggered by the MAV increase resulting from the substantial property improvements which are part of applying for the Special Assessment.

If you are planning or have recently completed a rehabilitation and/or restoration project on your house that will cost at or above the threshold for the Special Assessment, you should look very carefully at this option. In the case of our home, stating with property taxes in 2001 identical to those of our neighbor, in the last 10 years we have paid a total of $10,000 less in taxes than our neighbors who are not in the Special Assessment program (as they say “your mileage may vary”). We have also invested a 6-figure dollar number in improvements to our house, which would have easily triggered a substantial increase in MAV without the Special Assessment.

Additional Information

For more information, check out the SHPO website for application forms, FAQs, the Oregon Special Assessment Statute, and complete application instructions. You can also contact Joy Sears, program coordinator at 503-986-0688 or joy.sears@oregon.gov.

SHPO staff are very helpful in providing guidance and will discuss your plans with you.  The SHPO website has recent sample application for the program, which currently just happens to be for a property here in Irvington.

Also see Oregon and Multnomah County property tax rules and policies - scroll down to the "Property Events" discussion.