Effective rate, median annual bill, homestead exemption, and assessment cap rules under Or. Const. art. XI § 11
Median bill is the actual ACS 2022 figure for owner-occupied housing units in Oregon. Your specific bill will vary by county and municipality, local mill rates can swing the effective rate by 30%+ within a single state.
Property tax is one of the few fixed costs a landlord cannot negotiate, and in Oregon the amount you owe is shaped less by the rate on paper than by two voter-passed constitutional limits. Oregon's effective property tax rate is about 0.81% of owner-occupied housing value, according to the Tax Foundation, below the roughly 0.89% U.S. average. But the headline rate hides how the state actually calculates a bill: Oregon taxes an artificially capped assessed value, not full market value, and the gap between the two is where the real money for rental owners is made or lost.
Oregon's statewide effective property tax rate is roughly 0.81% of a home's value (Tax Foundation), which is modestly below the national average of about 0.89%. On a $400,000 rental, an 0.81% effective rate implies somewhere in the neighborhood of $3,200 a year, though your actual bill depends entirely on the county and taxing districts your property sits in. Rates vary widely across the state, with Multnomah County (Portland) among the highest and rural eastern counties among the lowest. Because Oregon taxes a capped assessed value rather than full market value, two identical houses on the same street can carry very different tax bills depending on how long ago each was last reassessed.
Oregon does not tax your property at its full market price. Under Measure 50 (passed in 1997), every property carries two numbers: its real market value (RMV) and its maximum assessed value (MAV). Your tax is levied on the lower of the two, called the assessed value. The critical feature for landlords is that MAV can rise no more than 3% per year, no matter how fast the market climbs. In a hot rental market, RMV can far outrun MAV, meaning your taxable value grows only 3% annually while your equity grows much faster. That predictability is one of Oregon's genuine advantages for buy-and-hold investors.
The cap has exceptions. New construction, major remodeling, subdivisions, and rezoning can push assessed value up more than 3% in a single year, so a renovation that adds an ADU or converts a single-family home into a duplex can trigger a larger tax jump than the 3% cap would suggest.
Layered on top of Measure 50 is Measure 5 (1990), a hard ceiling on how much tax any property can be charged relative to its real market value. Total taxes cannot exceed $10 per $1,000 of RMV for general government (cities, counties, fire, library, and other districts combined) and $5 per $1,000 of RMV for education. When the levies in a category would exceed those caps, the excess is compressed (reduced) until the property is back under the limit, with local-option levies cut first. For a landlord, this means there is a firm upper bound on your effective rate tied to market value, even in high-levy urban districts.
Some states tax owner-occupied homes more lightly than rentals through a homestead exemption. Oregon does not. There is no general statewide homestead or owner-occupancy exemption, and under ORS 307 leased and non-owner-occupied property is assessed on the same uniform basis as any other real property. In practical terms, converting a primary residence into a rental does not change how it is assessed or raise your rate. Oregon's targeted exemptions (for disabled veterans, deployed National Guard members, and certain senior deferral programs) are tied to a primary residence and do not carry over to investment property.
For return math, the takeaway is that Oregon's roughly 0.81% effective rate is a fixed operating cost you should underwrite conservatively, but the Measure 50 growth cap makes that cost unusually predictable year over year. Model the tax line at the county's actual effective rate, not the statewide average, and stress-test for a reassessment jump if you plan major capital improvements.
Measure 50: assessed (Maximum Assessed) value capped at 3% annual growth. No general homestead exemption; senior deferral program available.
The exemption is granted under Or. Const. art. XI § 11. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
Figures on this page are drawn from published sources: Oregon's effective property tax rate (about 0.81%) and the U.S. average (about 0.89%) are from the Tax Foundation's state tax data. The 3% assessed-value growth cap reflects Oregon Measure 50 (1997); the $10 and $5 per $1,000 real-market-value caps reflect Oregon Measure 5 (1990), both as explained by Oregon county assessors and the Oregon Department of Revenue. Uniform assessment of rental property and the absence of a general homestead exemption reflect ORS 307 and the Department of Revenue's exemptions guidance. Property tax outcomes vary by county and taxing district; confirm your parcel's assessed value and levy code with your county assessor before making investment decisions.
Oregon's effective property tax rate is about 0.81% of a home's value on average (Tax Foundation), slightly below the U.S. average of roughly 0.89%. Your actual rate depends on your county and local taxing districts, and Oregon taxes a capped assessed value rather than full market value.
No. Oregon has no general homestead or owner-occupancy exemption. Under ORS 307, rental and leased property is assessed on the same uniform basis as owner-occupied residential property, so converting a home to a rental does not change how it is assessed.
Measure 50 sets a maximum assessed value (MAV) that can grow no more than 3% per year. You are taxed on the lower of MAV or real market value, so in a rising market your taxable value climbs only 3% annually. Exceptions like new construction, major remodels, subdivision, or rezoning can raise it more.
Measure 5 caps total property tax at $10 per $1,000 of real market value for general government and $5 per $1,000 for education. When levies exceed those caps, the excess is 'compressed' (reduced) until the property is back under the limit, with local-option levies cut first.
No. Oregon's narrow exemptions for disabled veterans, deployed National Guard members, and certain senior deferral programs apply only to a primary residence. They do not apply to investment or rental property.
Use the county's actual effective rate rather than the ~0.81% statewide average, since rates vary widely (Portland's Multnomah County is among the highest). Then account for the Measure 50 3% annual growth cap for predictability, and stress-test for a larger reassessment if you plan major improvements.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: Or. Const. art. XI § 11. Last updated July 14, 2026. For informational purposes only, not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
