Yes—remodeling can increase property taxes when the work qualifies as “new property or new improvements” under Measure 50, which allows MAV to rise by more than 3% for exceptional events like additions, substantial remodels, and ADUs. Routine maintenance and general ongoing repairs usually do not add exceptional value, so taxes stay tied to the normal cap unless the work crosses county thresholds or materially increases market value.
Oregon calculates taxes from Assessed Value (AV), which is the lower of Real Market Value (RMV) and Maximum Assessed Value (MAV), so taxes rise when AV rises, regardless of listing prices or sale amounts. Under Measure 50, MAV generally increases up to 3% per year unless an exceptional event occurs, while AV equals min(RMV, MAV) each tax year.
Measure 50 established MAV and a 3% growth cap but carves out exceptions for things like new construction, additions, remodeling, subdivisions, rezoning with consistent use, omitted property, and disqualification from special assessments or exemptions. When an exception applies, the assessor adds a new exception value to MAV using the county’s CPR so the added portion gets a Measure 50-style discount rather than being taxed at full RMV.
State guidance treats remodeling as work that changes the property’s basic plan, form, or style, which is different from simple repairs or restoration to a previous condition, and such remodeling can qualify as a new improvement that adds exceptional value. Examples include reconfiguring kitchens, moving walls, finishing basements into living space, or installing an ADU that changes the dwelling’s utility and use profile.
General Ongoing Maintenance and Repair (GOMAR) typically does not generate exception value; think like-for-like roof replacement, repainting, or routine repairs done over time, which usually leave MAV increases within the normal 3% limit. In contrast, concentrated rehabilitation or renovation over a short period—especially with material upgrades—can be treated as an exceptional value if it crosses thresholds or measurably increases RMV, leading to a higher AV and tax bill.
Building permits often signal to assessors that a project may add taxable improvement value, prompting an appraisal to determine exception RMV for the remodeled components. Even without permits, assessor inspections, sales disclosures, or plan reviews can uncover significant unassessed improvements that get added later as exception value.
Counties publish practical thresholds that distinguish small, routine work from improvements likely to be treated as exception value, and these thresholds can be updated over time, so it’s smart to verify them for the current tax year. For example, Multnomah County lists remodeling or additions over $18,200 in one year or $45,000 over five years as exception events, while Sherman County has used $10,000 in one year or $25,000 over five years in its guidance, illustrating local and temporal variation.
Exception RMV is the added market value attributable to the improvement, measured as the difference between the current RMV with the project and what the property’s RMV would have been on the same date without the project, avoiding distortion from general market changes. The exception RMV is multiplied by the residential CPR, and that product is added to MAV, so the remodel portion gets a “discounted” MAV that reflects countywide MAV-to-RMV ratios rather than being taxed at full RMV immediately.
CPR is recalculated annually by each county as the ratio of average MAV to average RMV for unchanged properties in each class, and it is capped at 1.000, ensuring the exception value never yields a higher-than-market AV add-on for the new portion. Counties post current-year CPRs; for example, Tillamook County publishes its 2025 Changed Property Ratio, and similar pages exist in many counties for homeowners and contractors estimating the impact of new improvements.
Measure 5 imposes constitutional tax rate limits of $5 per $1,000 of RMV for education and $10 per $1,000 for general government, and if taxes exceed those caps, they are reduced through “compression” regardless of AV. In high-rate districts or where RMV is relatively low, compression can blunt the effect of an AV increase from remodeling, especially on voter-approved local option levies, though bonds are generally outside the limits.
Improvement value is typically captured on the roll as of January 1 following the year the remodel becomes part of the property, except RMV and CPR applied in that tax year’s calculation. If the improvement valuation seems off, counties outline how to appeal the value during the Board of Property Tax Appeals window, and lowering RMV below AV can reduce taxes even when an exceptional value is present.
Yes, it can if the remodel changes quality, layout, or utility enough to add exception RMV, even without new square footage, because remodeling is an exception event under Measure 50.
Usually no, because routine like-for-like replacements fall under GOMAR and typically do not create exception value beyond the normal 3% MAV growth.
Often not, as many counties publish dollar thresholds below which work is treated as minor or maintenance, but verify current-year thresholds for the specific county and project type.
Yes, ADUs are new improvements that add exceptional value calculated with CPR, raising MAV and likely AV once the improvement is on the roll.
AV equals min(RMV, MAV), so if RMV drops below the new MAV, AV will track the lower RMV and can reduce taxes even after the exception value was added.
Compression can limit tax increases despite a higher AV when total rates exceed constitutional limits, especially impacting local option levies before other rates are reduced.
Remodeling in Oregon can raise property taxes whenever it creates exceptional value, and the size of that increase depends on the improvement’s added market value and the county’s CPR for the tax year. Planning—verifying thresholds, estimating exception RMV, and checking current CPR—helps avoid surprises at certification and appeals time.
Ask for a design review aimed at minimizing exception value while meeting goals, especially for kitchens, baths, and ADUs.
