A buyer is considering purchasing a home in Bend. The listing agent mentions that the property's Real Market Value (RMV) has dropped significantly due to market conditions, and the RMV is now BELOW the property's Maximum Assessed Value (MAV). Which statement correctly describes how this property will be taxed under Oregon law?
Correct Answer
D) The property will be taxed on its RMV because Oregon taxes the lesser of RMV or MAV, and RMV is now the lower value
Under ORS 308.146, Oregon's Assessed Value equals the LESSER of Real Market Value (RMV) or Maximum Assessed Value (MAV). When market values decline and RMV falls below MAV — a situation that occurred broadly during the 2008-2010 housing downturn — the property is taxed on the lower RMV. This is sometimes called 'compression,' and it means the taxpayer benefits from the lower tax base. Once RMV recovers above MAV, the MAV becomes the assessed value again.
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