OAR 150-308-0720
Special Assessment of Government Restricted Multiunit Rental Housing Property

(1)

The assessed value (AV) of government restricted multiunit rental housing property is the lower of:

(a)

The specially assessed value (SAV);

(b)

The maximum assessed value based on the special assessment (MSAV); or

(c)

The real market value (RMV).

(2)

An owner of government restricted multiunit rental housing property may elect to have the property specially assessed using:

(a)

An income approach method using actual income and stabilized expenses; or

(b)

A ratio method.

(3)

The income approach method: For the initial year of special assessment, the assessor must utilize the property’s actual income statements for at least the prior three years if available. Pro forma statements may be used for recently constructed properties. Economic or market based rents cannot be used. A combination of actual and pro forma statements may be used.

(a)

The goal of the income approach is to determine the value of only the real property. No personal property value should be included. The assessor may remove personal property value by one of the following methods:

(A)

Include revenues and expenses for both the real and personal property. After the net operating income has been capitalized, deduct the value of the personal property; or

(B)

Remove all income and expense generated by the personal property assets prior to capitalization.

(b)

In determining the SAV, no income should be included for government income tax credits or mortgage interest subsidies.

(c)

The assessor must use actual income (revenues) and stabilized expenses rather than market or economic rents. However for recently built or recent conversions to government restricted multi-unit rental housing, a combination of pro forma and actual rental income may be used.

(d)

Actual revenues included are those that result from the operation of the property. They include the rent paid by tenants and any monthly rent subsidies. Also, rent for parking or other amenities must be included. Revenue not directly related to the property, such as interest income, should be excluded.

(e)

Stabilized expenses are those that would be expected to be typical for the property, not those that reflect unusual or extraordinary circumstances. The assessor may use averages for the three years and may express expenses on a per-unit basis or as a percentage of revenue. Expenses for a particular year should be adjusted if they are atypical. The goal is to find the typical level of expenses.

(f)

Expenses to include are those directly related to the operation of the property including, but not limited to, repairs and maintenance, utilities, government required tenant services, management, and insurance. Certain expenses such as depreciation, mortgage interest, payments to developers, and property taxes must be excluded. Reserves for replacements should be included, but any expense in the repair and maintenance category should be disallowed if it comes from the reserve account.

(g)

The net operating income is determined from the above steps by subtracting the stabilized annual expenses from the actual annual revenues.

(h)

The capitalization rate is estimated as follows:

(A)

Factors to be considered in selecting a rate include the risks associated with multiunit rental housing subject to government restriction. These include diminished ownership control, income-generating potential, and liquidity. The assessor must also consider any other factors or risks typically taken into account when estimating a capitalization rate.

(B)

The selected capitalization rate must be equal to or greater than the rate used by the assessor for similar unrestricted properties.

(C)

To the selected rate, add the effective property tax rate for the code area where the property is located, as described in OAR 150-308-0290 (Effective Tax Rate). This is the overall rate to use for capitalization.

(D)

The value determined from the income approach is calculated by dividing the overall capitalization rate into the net operating income. This is the SAV. Notwithstanding the result of the calculation, the SAV of the real property land and improvements may not be less than $1,000 per dwelling unit.

(4)

The ratio method: This method utilizes a ratio of restricted to market rents.

(a)

The assessor estimates the RMV of the property as if unrestricted.

(b)

The actual annual total rent, including subsidies, is determined.

(c)

The annual market rent for the property, if unrestricted, is estimated. If insufficient county data is available, the assessor may look to regional data.

(d)

The ratio of the actual rent to the market rent is calculated.

(e)

The unrestricted value from step (4)(a) is multiplied by the ratio from step (4)(d). This is the SAV. Notwithstanding the result of the calculation, the SAV of the real property land and improvements may not be less than $1,000 per dwelling unit.

(5)

Other issues of value, including unusual physical or functional circumstances affecting the property, are not considered in determining the SAV. They are appropriately addressed in estimating the property’s RMV.

(6)

Certain properties may have a mixed use. For example, a portion of the property may be used as government restricted multiunit rental housing property, while another portion may be commercial or retail. The special assessment applies only to the portion that is used as government restricted multiunit rental housing property. The assessment of the remainder of the property is unaffected by this rule.

(a)

For mixed-use properties, a portion of the land value may be subject to special assessment as government restricted multiunit rental housing property. The remainder of the land value is not subject to this special assessment.

(b)

The portion of the total land value subject to special assessment equals the portion that the gross square footage of the real property improvements used for government restricted multiunit rental housing bears to the total gross square footage of all the real property improvements, both restricted and unrestricted.

(7)

The SAV must be allocated between land and improvements.

(a)

The portion of the SAV allocated to the land is equal to the RMV of the land at its highest and best use.

(b)

The remaining SAV is allocated to the improvements.

(c)

If the SAV is equal to or less than the RMV of the land, a minimum value will be placed on the improvements and the remaining value will be assigned to the land.

(8)

For the initial year of application, the MAV of the specially assessed property (MSAV) is found by multiplying the SAV determined using the method chosen by the property owner by the changed property ratio (CPR). The assessor must use the same CPR that is used for similar unrestricted multiunit housing.

(9)

Following the initial year, the SAV may be redetermined using the income approach method or the ratio method (whichever the property owner elected) as follows:

(a)

The property owner may request a redetermination of the SAV. The owner must make a written request to the assessor by April 1 of the assessment year and must provide necessary income statements.

(b)

The assessor may decide to redetermine the SAV. No later than April 1 of the assessment year, the assessor will notify the property owner in writing and request income statements for the three most recent years (if not already provided).

(c)

If the SAV is not redetermined under (9)(a) or (9)(b), the assessor may leave the SAV unchanged or may use an appropriate trend or index.

(10)

For years after the initial year, the MSAV is 103% of the prior year’s AV or 100% of the prior year’s MSAV, whichever is greater.

(a)

If omitted property is assessed or there is a lot line adjustment, the MSAV is calculated as provided in ORS 308.149 (Definitions for ORS 308.149 to 308.166) to 308.166 (Ordering provisions when property is subject to multiple special determinations of value).

(b)

If new improvements are made to the property, and the owner applies for special assessment of the new improvements, the MSAV of the new improvements as determined by this rule is added to the existing MSAV.

(c)

If the property is disqualified from special assessment, and the property is not requalified, a new MAV, based on RMV, will be determined under ORS 308.149 (Definitions for ORS 308.149 to 308.166) to 308.166 (Ordering provisions when property is subject to multiple special determinations of value).

(d)

If the property is disqualified from special assessment, and the property is later requalified, the MSAV will be determined using the same method as prescribed in this rule for the initial application.

Source: Rule 150-308-0720 — Special Assessment of Government Restricted Multiunit Rental Housing Property, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-308-0720.

150‑308‑0010
Continuing Education Requirements for Registered Appraisers, Waiver of those Requirements, and Revocation of Registrations 150‑308‑0020
Revocation of Appraiser Registration 150‑308‑0030
Appraiser Trainee Program 150‑308‑0040
Standards for Imposition, Waiver, and Reduction of Penalty on Utilities and Designated Companies Assessed by the Department. Imposition of Penalty for Failure to File a Timely or Complete Return 150‑308‑0050
Continuing Education Requirements for Assessors 150‑308‑0060
Continuing Education Requirement for Appraisal Managers in County Assessment Offices 150‑308‑0070
Qualifications of Managerial Employees of the Assessor’s Office 150‑308‑0080
Taxable Personal Property Whose Temporary Situs Is in the State of Oregon 150‑308‑0090
Billboards as Real Property 150‑308‑0100
Determining Maximum Assessed Value when the Property Class is Changed 150‑308‑0110
Reduction of Maximum Assessed Value (MAV) for Property Destroyed or Damaged by Fire or Act of God 150‑308‑0120
Reduction of Maximum Assessed Value (MAV) When a Building is Demolished or Removed 150‑308‑0130
Definitions 150‑308‑0140
Computation of Changed Property Ratio for Centrally Assessed Property 150‑308‑0150
Net Capitalized Additions 150‑308‑0160
Minor Construction 150‑308‑0170
Establishing a Changed Property Ratio 150‑308‑0180
Definition of Affected 150‑308‑0190
Subdivided and Partitioned Property MAV 150‑308‑0200
Rezoned Property — Calculating Maximum Assessed Value (MAV) 150‑308‑0210
Omitted Property—Allocating Maximum Assessed Value (MAV) 150‑308‑0220
Exemption, Partial Exemption or Special Assessment Disqualification — Allocating MAV 150‑308‑0230
Calculation of Maximum Assessed Value (MAV) for Lot Line Adjustments 150‑308‑0240
Real Property Valuation for Tax Purposes 150‑308‑0245
Partial Exemptions and Special Assessments of Land 150‑308‑0250
Derivation of Capital Structure and Discount Rates for Valuing Industrial Properties and Department-Assessed Properties 150‑308‑0260
Industrial Property Valuation for Tax Purposes 150‑308‑0270
Valuation of Contaminated Property 150‑308‑0280
Measuring Functional Obsolescence in Industrial Property 150‑308‑0290
Effective Tax Rate 150‑308‑0300
Valuation Review of State-appraised Industrial Property. 150‑308‑0310
Real Market Value and Property Classification as Part of Assessment Roll 150‑308‑0320
Property With Multiple Leases Assessed as One Parcel 150‑308‑0330
Contents of Assessment Roll for Condominiums 150‑308‑0340
Printout or Microfiche Required When Assessment and Tax Rolls do not Constitute a Written Record 150‑308‑0350
Filing Requirements for Certain Delayed Annexations by Cities 150‑308‑0355
Filing Requirements for Boundary Changes 150‑308‑0360
Appraisals of Real Property by Registered Appraisers 150‑308‑0370
Determining Taxable Value for Assessment Charges on Property Exempt from Taxation 150‑308‑0380
Appraisal of Real Property 150‑308‑0390
Agricultural Land Devoted to Agricultural Purposes 150‑308‑0400
Stipulation Procedures 150‑308‑0410
Cancellation of Personal Property Assessments 150‑308‑0420
Exemption of Watercraft Undergoing Repairs 150‑308‑0430
Valuation of New Construction 150‑308‑0440
Confidentiality — Returns of Taxable Property 150‑308‑0450
Industrial Property Returns — Incomplete Returns and Late Filing Penalties 150‑308‑0470
County Contractors Having Access to Confidential Records 150‑308‑0480
Confidentiality of Property Tax Information for Centrally Assessed Companies 150‑308‑0490
Appraisal and Valuation of Industrial Plants 150‑308‑0500
Confidentiality of Industrial Plant Information 150‑308‑0510
Definition of Destroyed or Damaged 150‑308‑0520
Valuation of Nonprofit Homes for the Elderly 150‑308‑0530
Defining “Communication Services” 150‑308‑0540
Assessment of Properties of Designated Utilities and Companies by Department of Revenue 150‑308‑0550
Property Used for Guide Service 150‑308‑0560
Confidentiality of Appraisals of Designated Utilities and Companies by Department of Revenue 150‑308‑0570
Computation of Changed Property Ratio for Centrally Assessed Property 150‑308‑0580
Allocation of Mobile Aircraft Property Value 150‑308‑0585
Procedure for Determining Oregon Property Value for Private Railroad Car Companies 150‑308‑0590
Allocation of Centrally Assessed Electric Company Property Value 150‑308‑0595
Allocation of Centrally Assessed Gas Distribution Company Property Value 150‑308‑0600
Allocation of Centrally Assessed Pipeline Company Property Value 150‑308‑0605
Allocation of Centrally Assessed Railroad Company Property Value 150‑308‑0610
Allocation of Centrally Assessed Communication Company Property Value 150‑308‑0615
Allocation of Centrally Assessed Water Transportation Company Property Value 150‑308‑0660
Unit Valuation of Centrally Assessed Properties 150‑308‑0670
Contents of the Utility Assessment Roll 150‑308‑0680
Contents of Department’s Journal 150‑308‑0690
Centrally Assessed Property — Appraisal Guidelines 150‑308‑0695
Removal of Certain Elected Exempt Property from Correlated System Real Market Value of Centrally Assessed Property 150‑308‑0700
Qualification of Property for Special Assessment as Government Restricted Multiunit Rental Housing 150‑308‑0710
Application and Election Process for Government Restricted Multiunit Rental Housing 150‑308‑0720
Special Assessment of Government Restricted Multiunit Rental Housing Property 150‑308‑0730
Special Assessment Disqualification Process 150‑308‑0740
Process for Voluntary Disqualification from Special Assessment Program and Subsequent Application 150‑308‑0750
Payment of Taxes on Manufactured Structure That Allows Change from Real Property to Personal Property Status 150‑308‑0760
Manufactured Structure Classified as Real or Personal Property 150‑308‑0770
Real and Personal Manufactured Dwellings to be Assessed in Like Manner 150‑308‑1010
Farm Use Definitions, Inactivity Due to Illness, and Description of Lands in Non-Exclusive Farm Use 150‑308‑1020
Disposal by donation to a local food bank or school 150‑308‑1030
Assessment of Farmlands Within Exclusive Farm Use (EFU) Zones 150‑308‑1040
Assessment of Farmlands Outside of Exclusive Farm Use (EFU) Zones 150‑308‑1050
Gross Income Requirement 150‑308‑1060
Wasteland 150‑308‑1070
Acquired Land as Part of Farming Unit 150‑308‑1080
Valuation of Certain Agricultural Land to Reflect Value for Farm Use Only 150‑308‑1090
Calculation of MSAV When SAV Soil Classification is Changed 150‑308‑1100
Disqualification of Exclusive Farm Use Farmland 150‑308‑1110
Disqualification of Non-Exclusive Farm Use (Non-EFU) Farmland 150‑308‑1120
Definition of Specially Assessed Homesites 150‑308‑1130
Application for Specially Assessed Homesite 150‑308‑1140
Qualified Specially Assessed Homesite Valuation 150‑308‑1150
Ratio Calculation for Open Space Lands 150‑308‑1500
Additional Tax Calculation and When to Impose Additional Tax 150‑308‑1510
No Additional Tax 150‑308‑1520
Deferred Additional Tax (ORS 308A.706) 150‑308‑1530
Disqualification Notification Procedures
Last Updated

Jun. 8, 2021

Rule 150-308-0720’s source at or​.us