Oregon Department of Revenue

Rule Rule 150-358-0500
Determining Value of Historic Property Qualified for Special Assessment


(1)

For purposes of this rule,

(a)

“Assessed Value” (AV) is defined in ORS 308.146 (Determination of maximum assessed value and assessed value).

(b)

“Maximum Assessed Value” (MAV) is defined in ORS 308.146 (Determination of maximum assessed value and assessed value) without application of ORS 308.146 (Determination of maximum assessed value and assessed value)(4).

(c)

“Changed Property Ratio” (CPR) is the ratio described in OAR 150-308-0170 (Establishing a Changed Property Ratio)

(d)

“Internal ratio” (IR) is the quotient of MAV/RMV for an individual property, as if the property is not specially assessed. The ratio cannot be more than 1.0.

(e)

“Maximum Specially Assessed Value” (MSAV) means maximum assessed value for property subject to special assessment.

(f)

“Real Market Value” (RMV) is defined in ORS 308.205 (Real market value defined)(1).

(2)

This rule applies to initial and second qualifying periods beginning on or after July 1, 2010, with application being made on or after September 28, 2009.

(3)

When a property is subject to historic property special assessment, the county assessor must:

(a)

Include a “Historic property — potential additional tax” notation on the tax roll.

(b)

Maintain the RMV and a MAV as if the property were not specially assessed. The RMV and MAV as if the property were not specially assessed must be adjusted to include any changes in value as addressed in ORS 308.146 (Determination of maximum assessed value and assessed value), 308.149 (Definitions for ORS 308.149 to 308.166), 308.153 (New property and new improvements to property), 308.156 (Subdivision or partition), and 308.159 (Lot line adjustments) (commonly referred to as exception value).

(c)

Calculate MSAV of the property annually while the property remains in the program.

(4)

Calculate first period values for SAV, MSAV and AV.

(a)

Step 1: Calculate the property’s SAV to be used throughout the entire first 10 year period of historic property special assessment.

(A)

The SAV equals the AV of the property on the tax roll at the time the application is submitted pursuant to ORS 358.487 (Application for classification and special assessment as historic property).

(B)

If the property is specially assessed or exempt in the tax year during which an application is made, SAV equals the RMV on the tax roll at the time the application is submitted pursuant to ORS 358.487 (Application for classification and special assessment as historic property) multiplied by the CPR for that tax year.

(b)

Step 2: Calculate MSAV for the first year of special assessment by multiplying the SAV by the IR. The MSAV is recalculated in the second and subsequent years and equals the greater of:

(A)

The AV for the prior year multiplied by 103 percent; or

(B)

The MSAV for the prior year

(c)

Step 3: Calculate the AV, which is the lesser of the:

(A)

SAV calculated in step 1;

(B)

MSAV calculated in step 2; or

(C)

The RMV.
Example 1: The State Historic Preservation Officer (SHPO), in January 2010, notifies the assessor that the owner of an old warehouse applied for historic property special assessment in October 2009 and qualified for that special assessment. The value of the warehouse as reflected on the 2009-10 tax roll is: RMV $400,000; MAV $302,380; AV $302,380. The first year of special assessment is 2010-11. The RMV for 2010-11 is $416,000.

(a)

Step 1: Calculate the SAV. SAV = AV in the tax year the application is submitted = $302,380

(b)

Step 2: Calculate MSAV for first year of special assessment.

(A)

2010-11 MAV = AV x 1.03, $302.380 x 1.03 = $311,451

(B)

IR = MAV / RMV, $311,451 / $416,000 = 0.749

(C)

MSAV = SAV * IR, $302,380 * 0.749 = $226,482

(c)

Step 3: Calculate the AV for the current year. It is the lesser of SAV ($302,380), MSAV ($226,482) or RMV ($416,000). AV = $226,482.
Example 2: SHPO, in January 2010, notifies the assessor that the owner of an old mansion no longer used by the Elks as a clubhouse that will be first disqualified from exemption for 2010-11 applied for historic property special assessment in October 2009 and that the property is qualified for special assessment for 2010-11. The CPR for this classification of property, had it been taxable in 2009-10, was 0.656, and the property’s RMV for 2009-10 was $300,000. The first year of special assessment is 2010-11. The RMV for 2010-11 is calculated at $295,000 and the countywide CPR for this property classification for 2010-11 is 0.650. Other than the disqualification from exemption and the qualification for historic special assessment, there have been no changes to the property for 2010-11.

(a)

Step 1: Calculate MAV for 2010-11 pursuant to ORS 308.156 (Subdivision or partition) as a result of disqualification from exemption.

(A)

MAV = RMV x CPR, $295,000 x 0.650 = $191,750

(b)

Step 2: Calculate SAV

(A)

SAV = RMV x CPR from the tax year of application, $300,000 x 0.656 = $196,800

(c)

Step 3: Calculate MSAV for first year of special assessment

(A)

MSAV = SAV x IR, $196,800 x ($191,750 / $295,000) = $127,920

(d)

Step 4: Calculate AV

(A)

AV = lesser of SAV (step 2) or MSAV (step 3) or RMV. AV = $127,920.

(5)

Calculate Second period values for SAV, MSAV and AV.

(a)

Step 1: Calculate SAV for the first year of a second qualifying period.

(A)

The SAV equals the RMV of the property for the assessment year in which the application is made.

(B)

The SAV will remain constant throughout the second ten-year period of special assessment.

(b)

Step 2: Calculate the MSAV for the first year of the second qualifying period of special assessment by multiplying the SAV by the internal ratio. The MSAV is recalculated in the second and subsequent years and equals the greater of:

(A)

The AV for the prior year multiplied by 103 percent; or

(B)

The MSAV for the prior year

(c)

Step 3: Calculate the AV, which is the lesser of the:

(A)

SAV calculated in step 1;

(B)

MSAV calculated in step 2; or

(C)

The RMV.
Example 3: SHPO approves an application filed in March 2020 and qualifies a renovated chateau for a second 10 year period of special assessment beginning with the 2020-21 tax year. The first historic property special assessment period ended in the 2018-19 tax year. For 2020-21, the RMV is $825,000, and MAV without special assessment would be $509,850.

(a)

Step 1: Calculate SAV. SAV = RMV for assessment year in which application made. SAV = $825,000

(b)

Step 2: Calculate MSAV for the first year of special assessment. MSAV = SAV x IR, $825,000 x ($509,850 / $825,000) = $509,850

(c)

AV = lesser of SAV (step 1), MSAV (step 2), or RMV. AV = $509,850.

(6)

When a building that is certified for historic property special assessment is divided into condominium units:

(a)

The original account is deleted and each condominium becomes a new account.

(b)

Each new account is appraised to establish a new RMV and calculate a new MAV.

(c)

SAV and MSAV of the original account are apportioned between the new accounts but the total SAV and MSAV does not change as a result of the conversion to condominiums.

(d)

The initial sale of each condominium unit by the developer disqualifies that unit from special assessment.

(e)

Upon disqualification, the condominium unit is immediately requalified without further application for the remaining term of the original building’s current 10 year period of historic property special assessment.

(f)

Upon requalification, the SAV of the condominium unit equals its RMV for the tax year in which the sale of the unit occurred multiplied by the CPR for that tax year.

(g)

The MSAV for the condominium unit for the first year after initial sale are calculated as described in step 3, using the MAV and RMV of the unit to determine the IR.

(h)

The AV for the condominium unit for the first year after initial sale is calculated based on the lower of the SAV, MSAV, or RMV of the unit for that year.
Example 4: An account with an old warehouse building is qualified by SHPO for historic property special assessment. Its RMV, MAV, MSAV, SAV, and AV have been calculated as described in previous examples. The building is then converted to condominium units. When the condominium conversion is complete and all approvals are in place, each condominium unit becomes a separate account. New RMV and MAV are calculated for each account. Existing SAV and MSAV of the original warehouse account are apportioned between the new accounts. Total SAV and MSAV do not change as a result of the condominium conversion.
Account (tax lot) 00100, old warehouse building, is in its fourth year of its historic property special assessment. Its most recent tax roll values are as follows: RMV = $400,000; MAV if not specially assessed = $300,000, SAV = $225,000; MSAV = $179,020; AV = $179,020. CPR for this class of property is 0.750. The warehouse has now met all requirements for condominium and the 25 units worth $1,000,000 each are certified for sale. Account 00100 is deleted and replaced with account (tax lot) 90001 through account (tax lot) 90025. All units are identical in this building and each account has an RMV of $1,000,000. Total RMV of the building is now $25,000,000 and MAV is $18,750,000. Each account has a SAV of $9,000 and a MSAV of $7,160.
Total value of the building and site as condominiums (account 00100 deleted):
RMV = unit value * number of units, $1,000,000 x 25 = $25,000,000
MAV = RMV x CPR, $25,000,000 x 0.750 = $18,750,000
Value of each unit (each new account, 90001 through 90025):
RMV = $1,000,000
MAV = RMV x CPR, $1,000,000 x 0.750 = $750,000
SAV = total building SAV apportioned by unit value, $225,000 / ($25,000,000 / $1,000,000) = $9,000
MSAV = total building MSAV apportioned by unit value, $179,020 / ($25,000,000 / $1,000,000) = $7,160
AV = $7,160
Example 5: A condominium unit in the building described in example 4 is sold by the developer for $1,000,000 on July 20, 2015. The unit is disqualified from the historic property special assessment due to the sale and then immediately requalified for the remaining term. Upon requalification, the SAV, MSAV, and AV are calculated for this unit. As of January 1, 2015 the individual unit had an RMV of $1,000,000 and an MAV of $750,000. Historic property special assessed values are reflected in an SAV of $750,000 and an MSAV of $562,500. The SAV calculated for the 2015-16 tax year will remain the same, frozen, throughout the remaining years of the building’s 10 year term.
Unit values:
RMV = $1,000,000
MAV = RMV * CPR, $1,000,000 * 0.750 = $750,000
SAV = RMV * CPR, $1,000,000 * 0.750 = $750,000
MSAV = SAV * IR, $750,000 * ($750,000 / $1,000,000) = $562,500
AV = $562,500
The building was in its 4th year of its 10 year historic property special assessment term; the new SAV for the condominium unit will remain the same, $750,000, for the remaining years of the building special assessment or until the building is otherwise disqualified.
The remaining accounts in the building are not affected by this sale.

(7)

This rule is effective January 1, 2016.
Source

Last accessed
Jun. 8, 2021