It's Tax Time

Headlines in large point type on the front page of today’s Bend Bulletin newspaper (www.bendbulletin.com) proclaimed that “Deschutes land values soar”. The article by reporter David Fisher, citing tax records of Deschutes county’s tax assessor and billings which are now being mailed out, reports land value increases of more than 30% over the prior years billings.

According to Fisher, this is the largest increase in eight years - and amounts to a total additional tax valuation of $7.4 billion. This total increase divides up between additions of new properties to the county’s tax rolls of $1.9 billion and $5.5 billion for existing properties, a 26% valuation increase for this later group. All figures for valuation are as of January 1, 2006, reflecting gains over the previous year (1/1/2005 – 1/1/2006.)

While the increased tax valuations for all existing properties amounts to a hefty 26%, the good news for those owners is that Oregon law limits to 3%, the amount that any individual property’s tax can be increased in one year. As of this years billings, existing properties valuation increases averaged just 2%.

But Deschutes county land and real property is not immune to recent market downturns at the national level. Locally, sales prices do continue to rise, but more slowly than 2005 levels. And the volume of home sales is also down.

From a long term view of tax valuation nationwide, there is a widening gap between real market value (what properties are actually selling for) and assessed values. This phenomenon is caused by a number of factors, one of which is rapid appreciation and a lag in reassessment by tax authorities. Another, as mentioned earlier, is local and state laws placing caps on property assessment valuations. In Deschutes county the gap is currently such that only about 52% of the county’s total market value is reflected on tax bills.
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Article by Yon Olson, President of Accelerated Capital, Inc. – A Bend Oregon loan and mortgage company specializing in home and commercial real estate loans for all credit types. Call Yon at 541.617.0876 or visit us online for your Bend Oregon mortgage http://www.acc-cap.com/