How Oregon Measure 50 Limits Property Tax Assessments

Oregon’s Measure 50 limits property tax by capping the annual growth of each property’s taxable value at three percent and by locking every taxing district into a permanent tax rate. Voters approved the constitutional amendment on May 20, 1997, and it is codified in Article XI, Section 11 of the Oregon Constitution. Instead of taxing your home on what it would sell for today, the county taxes it on a controlled figure called the Maximum Assessed Value, which climbs slowly and predictably even when the market does not.

The Maximum Assessed Value Is the Number That Matters

Your tax bill starts with your Maximum Assessed Value, or MAV. For the 1997–98 tax year, every property in Oregon received an initial MAV equal to 90 percent of its real market value from the 1995–96 tax year.¹ A home worth $200,000 in 1995–96 started with an MAV of $180,000. That number became the anchor for every future tax calculation on the property, and it was set deliberately below market so the taxable base would ride out whatever happened next in real estate.

The number that actually appears on your tax bill is the assessed value, which equals whichever is lower: your MAV or your property’s current real market value.² In most years the MAV is lower, because market values have outpaced the growth cap. Your tax is that assessed value multiplied by the combined rate of every district that serves your property.

In a downturn, real market value can drop below the MAV, and the assessor uses the lower market figure instead.³ If the market recovers, the assessed value climbs back toward the MAV but never above it.

The Three Percent Annual Growth Cap

Once your initial MAV was set, the constitution limits how fast it can rise. Each year, your MAV can go up by no more than three percent over the prior year’s assessed value, or stay at 100 percent of the prior year’s MAV, whichever is greater.² The cap works independently of what your home would sell for. If prices in your neighborhood double in a year, your MAV still inches up by three percent at most.

Over time this creates an ever-widening gap between market value and taxable value. A property with a $180,000 MAV in 1997–98 that grew at the full three percent every year would sit around $412,000 for the 2025–26 tax year, while its market value might be two or three times that. The gap is the point. Homeowners don’t get priced out of their homes by a hot market.

Selling the House Doesn’t Reset the MAV

One of the most consequential features of Measure 50 is what it does not do. It does not reset a property’s MAV when the property is sold. The constitution lists specific events that can trigger an MAV recalculation, and a change in ownership is not among them.¹ A buyer who pays $600,000 for a home may inherit an MAV of $280,000 and be taxed on that lower figure going forward, with the three percent cap continuing from that base.

This surprises people who move to Oregon from states like California, where a sale triggers reassessment to market value. Here, the MAV stays with the property regardless of sale price. Two identical houses on the same street can carry very different tax bills depending on their history of improvements and when their MAVs were last adjusted upward.

When Your MAV Can Jump More Than Three Percent

The cap has exceptions. Specific physical or legal changes let the county assessor add value to your MAV in a single year, bypassing the normal limit:

New construction or major improvements. Additions that exceed $18,200 in real market value in a single assessment year, or $45,000 cumulatively over five assessment years, qualify as major construction and add to the MAV. Work below those thresholds counts as minor construction and does not trigger a recalculation.⁴
Subdivision or partition. Splitting a property into multiple lots forces the assessor to redistribute the MAV among the new parcels.
Rezoning with consistent use. If land is rezoned and the owner uses it in a way that matches the new zoning, the assessor can recalculate the MAV to reflect the change in permitted use.
Omitted property. If a property or improvement was accidentally left off the tax roll, the assessor can add it and adjust the MAV accordingly.
Disqualification from exemption or special assessment. Property that loses a tax exemption or special assessment status gets recalculated at that point.⁵

Ordinary maintenance and repair don’t count. Replacing a roof, repainting, or fixing plumbing as part of normal upkeep is excluded from these exception events.⁶ The line can matter: a full renovation where many components are replaced in a short window can cross into major improvement territory, while the same work spread across years of routine maintenance typically would not.

How New Construction Gets Taxed: The Changed Property Ratio

When one of those exceptions applies, the assessor doesn’t just add the improvement’s full market value to your MAV. The new or changed portion receives an MAV based on the Changed Property Ratio, or CPR. This ratio equals the average MAV of unchanged properties in the county divided by the average real market value of those same properties, calculated within the same property class.⁷

In practice, new construction is taxed at a fraction of its market value, just as existing homes are. A county with a residential CPR of 0.54 would assign an MAV of roughly $270,000 to a brand-new home with a $500,000 market value. The ratio varies by county and by property class (residential, commercial, industrial), and each county recalculates it annually. Residential CPRs across Oregon generally fall in the range of roughly 40 to 60 percent, reflecting how far assessed values have drifted below market values over nearly three decades of the three percent cap.⁵

Permanent Tax Rates and Local Option Levies

Measure 50 assigned each taxing district a permanent tax rate based on the revenues it was collecting when the measure took effect. Counties, cities, school districts, and special districts all operate under these fixed rates, and no governing body can raise its permanent rate unilaterally.⁸ Districts formed after 1997 set their permanent rate at the election that creates them.⁹

When a district needs more money than its permanent rate produces, it can ask voters to approve a local option levy. Operating levies last up to five years. Capital project levies can run up to ten years or the useful life of the project, whichever is shorter.¹⁰ Voter-approved general obligation bonds sit outside both the permanent rate and the local option structure and are not subject to the combined rate limits that apply to other levies.¹¹

Compression: How Measure 5 Interacts with Measure 50

Measure 50 doesn’t operate alone. Oregon’s earlier Measure 5, passed in 1990, imposes a separate ceiling based on real market value rather than assessed value. Education taxes cannot exceed $5 per $1,000 of real market value, and general government taxes cannot exceed $10 per $1,000 of real market value.¹²

When the combined rates applied to a property’s assessed value produce a bill that exceeds those ceilings, compression kicks in. Taxes within each category are reduced proportionately until they fit under the cap.¹³ Local option levies feel this most, because they share the same rate limit as permanent rates. A district can ask voters to approve a local option and then collect only a fraction of what was authorized because compression eats into the total.

Compression tends to worsen when market values stagnate or fall while assessed values keep climbing at three percent. As the two numbers converge, more properties bump against the Measure 5 ceiling and more revenue gets compressed away.

Appealing Your Value

If you believe your real market value or assessed value is wrong, you can file a petition with your county’s Property Value Appeals Board. The form is Oregon Form OR-B-RPP, available from your county clerk’s office.¹⁴ Your petition must be postmarked or delivered by December 31 of the year you receive the tax statement, or the next business day if December 31 falls on a weekend or holiday.¹⁵

An appeal challenges the value, not the rate. A successful appeal reduces your real market value, which can lower your assessed value if the RMV drops below the MAV. It will not change your permanent tax rate or any voter-approved levies. If the county board denies your petition, you can appeal further to the Magistrate Division of the Oregon Tax Court.

Deferral for Seniors and Disabled Homeowners

Oregon offers a deferral program that lets qualifying homeowners postpone their property tax payments. For the 2026 tax year, the household income limit is $70,000, based on all taxable and nontaxable income from the prior calendar year.¹⁶ Deferred taxes accrue interest and become a lien on the property, coming due when the home is sold or the owner moves out. The program doesn’t erase the tax obligation. It shifts the timing so a fixed-income homeowner isn’t forced to sell simply because they can’t cover the annual bill.

1
Oregon Department of Revenue. Maximum Assessed Value Manual
2
Multnomah County. Glossary of Value Terms
3
Jackson County, Oregon. How Measure 50 Affects Your Property Tax
4
Oregon State Legislature. Oregon Laws 2023 Chapter 432 – Relating to the Definition of Minor Construction for Purposes of Property Tax Law
5
Oregon Revised Statutes. Oregon Code 308.156 – Subdivision or Partition; Rezoning; Omitted Property
6
Multnomah County. Property Assessment FAQs
7
Hood River County, OR. What Is the Changed Property Ratio and How Does It Affect Property Taxes?
8
Oregon State Legislature. The New Direction of the Oregon Property Tax System Under Measure 50
9
Oregon Revised Statutes. Oregon Code 267.530 – Establishment of Permanent Tax Rate Limit at Time of Formation
10
Oregon Revised Statutes. Oregon Code 280.060 – Levy of Local Option Taxes Outside Constitutional Limitation; Duration of Levy; Approval of Levy as Approval of Bonds
11
Clatsop County Oregon. Measure 50: Oregon’s Property Tax System
12
City of Philomath, Oregon. How Measures 5 and 50 Affect Your Property Taxes
13
Oregon State Legislature. School Local Option Property Tax – Legislation and Utilization
14
Oregon Department of Revenue. Form OR-B-RPP, Oregon Property Value Appeals Board Real Property Petition
15
Oregon Department of Revenue. Appeals
16
Oregon Department of Revenue. Oregon Property Tax Deferral for Disabled and Senior Homeowners Program