To Appeal or Not to Appeal

A property owner, looking at a large tax bill, would likely wonder if this bill can be reduced some way. Is it worth the effort of going though the appeal process?

There are two factors that give an answer to this very important question:

  1. Is the real market value, assigned by the county, more than the property would likely sell for?
  2. Is the structure of the tax account such that a tax reduction is possible?

The first factor, whether or not the real market value is too high, is a straightforward value question.

Basically, this law states what we all know: property is worth whatever someone will pay for it. The legal definition is more technical, but that is the general idea. A recent purchase or appraisal is good evidence usually.

More difficult, are situations where the property has lost value due to some factors that are not very visible.

In one case, McDonald’s Corporation, the fast food chain, intended to tear down a building because the old design was outdated and the company was upgrading its buildings. The company believed that the old building was worthless, simply standing in the way of the new building. The county, on the other hand, reasoned that since building was usable and standing there, it must be worth whatever value was on the roll. In this case, McDonald’s simply gave up. I thought this was too bad, because they had a good case. Who would know better than McDonalds whether and existing fast food store was obsolete or not?

In most cases, however, the county appraisers are intelligent and reasonable.

The second part of the problem is much more difficult to comprehend. It involves the way the taxes are assessed. The Oregon property tax laws are, arguably, the most complex in the nation. Few taxpayers understand it since it involves several different values and in infinite number of effective tax rates.

In general, if the real market value shown on tax bill is more than the owner could sell the property for it may be a prime candidate for an appeal. Let me look at it; normally I can get a preliminary estimate in just a few minutes.