Oregon Permits Local Affordable Rental Exemption

Oregon counties and cities may adopt ordinances establishing a property tax exemption for “eligible rental property” for households with an annual income at or below 120% of the area median income at monthly rates that are affordable for those households. “Eligible rental property” means newly rehabilitated or constructed multi-unit rental housing.

Exemption Ordinance

The ordinance must establish a schedule in which the number of consecutive property tax years for which the exemption is granted, up to a maximum of 10 years, increases directly with the percentage of eligible units that are rented to qualifying households. Also, “area median income” must be defined, and that figure must be determined annually as soon as practicable after January 1 of each year.

The ordinance may not take effect without the agreement of affected taxing districts whose combined rates of taxation make up at least 51% of the total combined rate of taxation for the eligible rental property. If the ordinance takes effect, the exemption will apply to all property tax levied on the property. If the exemption is granted to a property, it will be exempt on the terms of the ordinance or resolution adopted or amended and in effect on the date the exemption application was submitted for the property.

Applications

The eligible property owner or lessee must file an exemption application on or before March 1 preceding the property tax year to which the application relates. A late application submitted on or before December 31 of the property tax year may be granted if it is accompanied by a filing fee of the greater of $200 or 0.1% of the real market value of the eligible property. In addition, an application submitted on or before April 1 of the property tax year may be filed if accompanied by a fee of $200. However, the applicant also must either demonstrate good and sufficient cause for failing to file a timely application or be a first time filer.

The owner or lessee of property granted an exemption must apply each subsequent property tax year for which the property remains eligible for the exemption. If the assessor determines that the property is no longer eligible for the exemption, the exemption will be terminated immediately. In such a case, the amount of tax that would have been due on the property had it not been exemption for each of the years it was exempt will be added to the general property tax roll for the next tax year.

Repeal

This exemption is repealed on January 2, 2027. However, any property that has been granted an exemption before that date will continue to receive the exemption for the period of time for which the exemption was granted.

Ch. 624 (H.B. 2377), Laws 2017, effective 91 days after adjournment sine die

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