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What is the Changed Property Ratio and how does it affect property taxes?

When a new home is built you might assume that the entire value of the home is what the taxpayer pays taxes on, but that is not usually the case.

Due to Measure 50 from 1997, the Real Market Value (RMV) of the new home is multiplied by the Changed Property Ratio to determine the maximum amount of value that taxes for the new home are based on. The purpose of the Changed Property Ratio (CPR) is to provide new property with the same benefit as existing property under Measure 50.

The CPR is calculated every year by dividing the average Maximum Assessed Value of all unchanged properties in the county by the average Real Market Value of all unchanged properties in the county in the same property classification.

In Hood River County, the Changed Property Ratio for residential properties has been below 60% of the RMV for the last six years, and in 2022 the CPR for residential property was an all-time low of 42.1%.

This means if someone built a new residential home in 2022 valued at $500,000 only 210,500 (500,000 X .421 = 210,500) of the value was taxable.

The process works the same way for other property types, like apartments or commercial properties. The only thing that's different is the ratio; there's a different ratio calculated for each type of property.

Want to learn more about Oregon’s quirky property tax system? You can check out some videos at Understanding Oregon's Property Tax System - Hood River County, OR.

Key Oregon Property Tax Definitions

Ballot Measure 50 – This 1997-98 measure redefined each Oregon property’s assessed value to 90% of the 1995-96 property Assessed Value. Also, each tax district was limited to a permanent tax rate. Hood River County’s permanent tax rate is $1.42/$1000 Assessed Value and is the 9th lowest permanent tax rate of all 36 counties in the State of Oregon.

Maximum Assessed Value (MAV) — MAV is the taxable value limit established for each property. The first MAV for each property was set in the 1997-98 tax year. For that year, the MAV was the property’s 1995-96 real market value minus 10 percent. MAV can increase for only two reasons: a three (3) percent annual increase or specific property events called exceptions (such as new property or improvements, partitions or subdivisions, rezoning, etc.).

Changed Property Ratio (CPR) — The CPR is a method that determines how new improvements to a property are assessed. The CPR is determined by dividing all unchanged properties Maximum Assessed Value by their Real Market Value. This ratio is broken down into the property classifications such as residential, commercial, and industrial.

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